A provision in the Waxman-Markey energy bill—currently making its way from the House Energy and Commerce Committee to a floor vote—calls for a carbon content product disclosure program, similar to ENERGY STAR and other voluntary labeling program. Many of these programs have been shown to reduce adverse environmental impacts through changes in product design and consumer purchasing decisions.

The little-known amendment, inserted by Rep. Tammy Baldwin (D-Wisc.), requires the U.S. Environmental Protection Agency to establish “a national program for measuring, reporting, publicly disclosing, and labeling products or materials sold in the United States for their carbon content … ” 

Carbon footprint labeling is in its infancy but is expected to grow by leaps and bounds. Efforts are already underway in the U.K.—where the Carbon Trust is labeling hundreds of products, and Japan where a voluntary program is being tested with 30 major manufacturers. 

Even if most consumers do not directly search for “low carbon” products, carbon footprint labels might help drive innovation as companies seek to differentiate their products to “green consumers.”  Large intermediaries such as Tesco, a grocery store chain in the U.K., are beginning to use carbon footprint labels as one of the product attributes they use in deciding which items to stock.

Carbon footprint labeling might also be a mechanism that helps reduce leakage without imposing direct border restrictions. By encouraging all products (regardless of where they are produced) to have a carbon label, there will be pressure to reduce the carbon content of products even in countries that have not agreed to greenhouse gas restrictions.

For more on environmental disclosure labeling, check out this post about Senior Fellow Kate Probst's suggestions for tailpipe carbon emissions labeling and Senior Fellow Richard Morgenstern's Weekly Policy Commentary on the effectiveness of voluntary programs. 

Mark Cohen is vice president for research at Resources for the Future.