Monday 15 December 2008

Carbon labels - impact on African exporters

There a many labels to choose from when shopping for food. Organic and fair trade are most prominent but there are others particularly for coffee (utz kapeh, rainforest alliance, bird friendly etc.). Another one emerging on the horizon is carbon labels. These will inform the consumer about how much carbon is "embedded" in a product, i.e. how was used in making the product from production (running a tractor, seeds, fertilzers, heating a greenhouse) through processing, transport and delivering to the supermarket. Measuring all this is very complicated and expensive but a couple of big retailers, principally Tesco in the UK are having a go and even have a dozen or so products with the label. One sticking point might be how consumers react to this. Will they know what the label means? How can they compare with other labeling scheme or products without labels?

There is also a development dimension. Will exporters of fruits and veg from Africa lose market share? A new paper from Gareth Edward Jones and his team at Bangor University examine this question in more detail. It is entitled "Vulnerability of exporting nations to the development of a carbon label in the UK". To be printed later this year in Environmental Science and Policy, it highlights how countries like Kenya are highly vulnerable to loss of fruit and veg export markets to the UK as they have high export value in proportion to their GDP. Spain by contrast has a small proportion of its GDP derived from horticulture. Furthermore, their products like oranges can not be substituted by the northern European producer. Another interesting point raised by the paper is that it is unclear how consumers will trade off their preferences between different attributes of food, e.g, organic (no pesticides), fair trade (social benefits) and now climate impact.
For exporters carbon labels are likely to mean they have to think more about investment in climate mitigation technologies and measuring their emissions and so satisfy buyers in the north using carbon labels on these imported products - more costs for exporters, potentially driving out more small and medium enterprises from the export market - just as what happened with the food safety supermarket standard Eurepgap (now called Global Gap).

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