The Evidence Base for Environmental and Socioeconomic Impacts of “Sustainable” Certification

Initiatives certifying that farms and firms adhere to predefined environmental and social welfare production standards are increasingly popular. According to proponents, they create financial incentives for farms and firms to improve their environmental and socioeconomic performance. This paper reviews the evidence on whether sustainable certification of agricultural commodities and tourism operations actually has such benefits. It identifies empirical ex post farm-level studies of certification, classifies them on the basis of whether they use methods likely to generate credible results, summarizes their findings, and considers the implications for future research. We conclude that empirical evidence that sustainable certification has significant benefits is limited. We identify just 37 relevant studies, only 14 of which use methods likely to generate credible results. Of these 14 studies, only 6 find that certification has environmental or socioeconomic benefits. This evidence can be expanded by incorporating rigorous, independent evaluation into the design and implementation of projects promoting sustainable certification.

Initiatives certifying that goods and services have been produced in an environmentally friendly manner are increasingly popular globally. Proponents say such voluntary eco-certification systems can create financial incentives for producers to improve both their environmental and socioeconomic performance, even in countries where state regulation is weak.

But eco-certification programs have pitfalls, among them: weak standards; noncompliance; limited participation; and a tendency for producers already engaged eco-standards to comprise the bulk of participants, so that certification does not actually boost environmental performance.

In a report published in November 2010 by the Science and Technical Advisory Panel of the Global Environmental Facility entitled Environmental Certification and the Global Environment Facility, coauthors Allen Blackman, an RFF Senior Fellow, and Jorge Rivera of George Washington University, examine the evidence on the impact of sustainable certification on agricultural commodities, tourism, fishing, and forest products. The report and others are available at http://www.unep.org/stap/

The report is based on an earlier RFF Discussion Paper: “The Evidence Base for Environmental and Socioeconomic Impacts of ‘Sustainable’ Certification”. Blackman and Rivera carry out research as part of the Environment for Development Center Initiative for Central America in Costa Rica.

Excerpts From The Report

“Certification programs that aim to improve commodity producers’ environmental and social performance face important challenges. They must use standards stringent enough and monitoring and enforcement strict enough to ensure poorly performing producers are excluded. In addition, they must offer price premiums high enough, or access valuable enough, to offset the costs of certification and attract a significant number of applicants. Even if these two challenges are met, certification schemes can still be undermined by selection effects. Commodity producers already meeting certification standards have strong incentives to select into certification programs: they need not make additional investments in environmental management or social welfare to pass muster, and can obtain price premiums and other benefits. But certification programs that mainly attract such producers will have limited effects on producer behavior, and thus few additional environmental and social benefits."

“Financing of certification initiatives is consistent with the GEF’s mandate to increase the supply of global environmental benefits. The limited evidence base does not imply that the GEF should avoid investing in certification programs, nor does it imply that past investments in certification have necessarily failed to yield returns. However, it does imply that the GEF, as one of the leading funders of eco-certification efforts in developing nations, should only invest in certification projects that are explicitly designed to evaluate the environmental impacts of the certification effort. In other words, the purpose of eco-certification projects in the GEF portfolio should not simply be to attempt to generate environmental benefits at the project site, but also to catalyze the mainstreaming of biodiversity globally though the generation of credible evidence about what works and under what conditions.”