Carbon labels OpEd

My OpEd on carbon labels in the BBC Green Room today

Are carbon labels useful?

Last week I was in Singapore at a seminar organized for trade ministries from Asian countries. The programme included presentations on trade and environment issues.

Prior to my presentation on carbon labelling, I asked the 25 participants:

- if they knew what the carbon label on the Sapporo beer above meant,
- if they were more likely to buy the product because of the label and
- if they thought the label would help stop climate change. The results lead me to question the point of carbon labelling.
Just for good measure I asked if people knew what their countries average personal carbon footprint was.

Findings
Half the respondants were correct in knowing what the label meant. Half were incorrect.

Both those who were correct and those who were incorrect in knowing what the label meant felt that they would be more likely to buy this product than an equally priced and quality beer due to the label.

Most respondants felt that the label would help slow down climate change.

Noone knew how much CO2 was emitted per capita in their respective countries.

My observations are the following:

- There is limited understanding amongst consumers as to what carbon labels mean.
- Irrespective of whether a consumer understands its meaning or not, the label increases the product's marketability.
- Despite thinking that carbon labels will slow down climate change, consumers do not know what their carbon footprints are. How are they in a position to begin calculating what is the best strategy for reducing their footprint?

Understanding carbon labels

Do you understand what this means?

A till survey reported by ClimateChangeCorp has found that just 28 per cent of customers from UK pharmacist Boots knew that a product carbon footprint related to climate change. And 44 per cent confused it with fair trade.

But the survey showed a majority thought it was important that a figure was given on how much carbon was used during an item’s production. Another problem was that while few products carry the labels, even clued-up consumers cannot compare like with like.

Japanese carbon label

Japan's Ministry of Industry, Trade and Economy has launched a carbon label for "daily items and food". According to MITE, they received 500 applications from companies to trial the label in 2009. I question how consumers will respond to the label - will they understand what it means? I don't!

Will it transpire that consumers simply feel assured to see the label without understanding what information it is conveying?

Whatever it does mean, it won't make much difference to reducing carbon emissions if you are driving (rather than biking or walking) to the supermarket to pick up a kilo of carbon labelled goods...

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).