Carbon Labelling of Products
Carbon Trust Reduction Label is a public display of the carbon footprint (or embodied carbon) of a product or service from source to store and product disposal. The product also asserts a commitment on the part of the producer to a ‘reduce or lose’ policy whereby if they fail to reduce the carbon footprint of the product over a two year period they will have the label withdrawn by the Carbon Trust (carbon-label.com). The scheme is not limited only to on-pack labelling; it could be on websites, catalogues, mail packs, product manuals etc. This gives the retailer or manufacturer the flexibility in their method of communication.
The strategy was launched and is verified by the Carbon Trust. Unlike the voluntary offset market there is a standard certification process. For a product to be certified the first step is to develop a carbon footprint of the entire production process. Following this the Carbon Label Company (CLC) or a consultant can then certify the product for compliance according to set standards.
How Labelling works
So how will a sticker on the pack of a product help reduce carbon emissions in the atmosphere? The flow chart below shows how carbon labelling is expected to lead to carbon reduction.
As can be seen from the flow chart there are two forces at work, the policy commitment and the change of consumer behaviour. Through labelling, these two elements will come into play and force down emissions.
Two forces at work
The ‘reduce or lose’ policy will be effective in cutting down emissions. When a retailer commits to the policy, he is saying that in the next two years the amount of carbon emitted throughout the life-cycle of the product will decrease. Before a particular product is certified the carbon emissions at every step of the supply chain is measured. This information is a valuable tool that can then be used to know areas of highest reduction. Moreover, since carbon reduction is strongly linked to energy savings which is inextricably linked to cost savings, organisations will have an added incentive to reduce. Therefore this aspect of carbon reduction labelling leads to reductions directly.
However the second force at work, market behaviour, does not reduce CO2 directly. In fact it is a long winded way to arrive at a relatively simple destination. The CLC believes that carbon labelling empowers the consumer to choose those products that have smaller carbon footprints and therefore contribute less to climate change.
Potential limitations
Although the process is rigorous and more reliable than carbon offsetting (where no verification process or body exists) it is not without its limitations.
First, there is yet no universally acceptable way of calculating life-cycle carbon. Although Carbon Trust published a methodology for assessing a product’s carbon footprint, it did not give any guidelines officially on how to measure a company’s entire supply-chain carbon impacts. Businesses use different methodologies therefore it undermines the credibility of the concept. For example HSBC, the self-acclaimed world’s first carbon neutral bank, excludes impacts from its supply chain and project financing. Conversely Vodafone has extended its analysis to consider emissions from customers as well as supply chain [1]. Due to the differing methods there is no way firms can benchmark their carbon impact e.g. whether the carbon emitted during the use of the product count. This is equivocal on the Carbon Label Company’s website [2].
Secondly, customers do not understand the scheme. One of the most important phrases, ‘embodied carbon’ is still a mystery to consumers. Also when a product is labelled, say ‘CO2-100g’, it does not help the buyer know whether it’s good or bad. Labelling is supposed to be a public declaration, but it will not be effective if the public does not understand the declaration no matter how much work has been done behind the scenes to come up with the figure. The lack of clarity with regards to the meaning of the figures works against the purpose of the scheme itself. For example about 90% of the emission associated with potatoes occurs during cooking. The label does not explain that therefore consumers will continue to use the same inefficient cooking methods and nothing is achieved.
The success of labelling depends largely on change of market behaviour. Much money is required to raise customer awareness over a period of time (say 3-5 years). Perhaps choice editing may be a more effective approach. If a customer who was concerned about the environment went to buy a certain product and was told by the staff that they no longer sold that product because its carbon footprint was too high, I doubt that the customer will be enraged. B&Q’s decision to stop selling patio heaters [3] in 2008 is a good example of a company taking decisive action against climate change. I don’t know of any environment supporter who was angered by their decision.
[1] http://www.endsreport.com/index.cfm?action=report.article&articleID=17155
[2] Some parts of the Carbon Label website include the carbon emitted during use of the product e.g. http://www.carbon-label.com/business/faqs.htm#answer (retrieved 23rd May) while according to this definition emission use is not included.
[3] http://www.guardian.co.uk/environment/2008/jan/22/carbonemissions.climatechange (retrieved 26May)
