Carbon labels present taxing problem

Alexander Kasterine, BBC Green Room 31 Mar 09;

Labels showing products' carbon footprints will not help tackle climate change, says Alex Kasterine. In this week's Green Room, he argues that carbon labelling schemes will harm exports, especially from developing nations, without making much impact on emissions.

Carbon labelling schemes have been developed in order to show how much carbon dioxide (CO2) has been emitted during the production, processing and transport of a product.

Retail giant Tesco is trialling carbon labels on 20 products in its range, and other retailers in the UK, France, US and Japan have followed suit.

The aim of these carbon labels, according to the UK government-funded Carbon Trust, is to "empower us all to make informed choices and in turn drive a market for low carbon products".

The main concerns with carbon labels come down to their effectiveness in reducing our carbon footprint and their fairness towards suppliers, particularly in developing countries.

Carbon labels look ineffective because the consumer can choose to ignore the information about the product's level of "embedded" carbon - just as we frequently ignore nutritional information, despite knowing that ice cream and oven chips might be bad for us.

This is not a useful tool for driving emissions reductions of 80% over the next 30 years.

In search of meaning

As things stand, most consumers do not even understand what carbon labels mean.

A recent survey found that just 28% of shoppers in the UK chain Boots knew that a carbon label related to climate change. Almost half confused the label with fair trade; most thought it was important to show the amount of carbon emitted during the item's production.



It is not surprising that most of us do not understand the labels. The meaning of a label with a footprint and a figure of "75g" on a packet of crisps is not immediately obvious.

If shoppers do recognise the figure as a measurement of the total CO2 emitted in the production and processing of the crisps, they still have to compute whether this figure is high or low.

This calculation would have to be based on knowing one's own annual CO2 emissions (how many people know this?), the proportion that comes from food consumption, and some pretty sharp maths skills in the supermarket to work through the sums to arrive at a judgment.

However, the calculation is pointless unless you have another product on the same shelf to compare it with.

Driving concern

Currently, retailers are using different methodologies for calculating and presenting the information in such a way that labels can not be compared.

Innocent Drinks tries to help us out of the confusion. The company states that the UK government recommends a target of 7.9 tonnes of annual consumption of CO2 in 2009, which means 21kg per person per day; drinking a smoothie means consuming 2,700g of CO2, or 8% of our daily allowance.

Despite this clear explanation, there are several problems with this approach.

Firstly, the information on the carbon label counts for very little unless you do your weekly shopping by bicycle or by foot.

Tesco and other big retailers have migrated out of town, so consumers now mostly use cars to get there. Driving to pick up a bag of low-carbon crisps for the kids' party won't stop climate change - quite the opposite.

We are all prone to self deception; maybe that is why the consumers in Boots thought carbon labels were a good thing, as it gives them the sensation they are doing something about climate change, even as they drive home in their petrol-fuelled car.

The information also cannot point to an alternative food product that is much lower in carbon emissions. As the animal welfare movement has reminded us, producing a kilogram of beef generates many times more greenhouse gases than producing an equivalent level of protein from pulses such as lentils.

The "green marketing" potential of carbon labels is clear. A UK survey by Populus for crisp manufacturer Walkers revealed that more than half of the 1,000 people interviewed were more likely to buy a product with a carbon label, and 69% thought the label demonstrated corporate commitment to reducing carbon emissions.

Free choices?

More broadly, the government is only recommending an allowance for how much carbon we should use.

Given that climate change is now threatening irreversible catastrophic changes to life on Earth, as Nasa's Jim Hansen projected recently, surely governments should set rules for economic behaviour that causes climate change, rather than guidelines.

Implicit in the concept of carbon labels is that our private choices are always in line with the public interest, namely curbing carbon emissions.

The problem is that many of us don't want to be green if that means missing out on a weekend in Barcelona, heating a bigger house or running a bigger car; all the stuff we aspire to.

The shopper can choose not to "be green", and free ride on the efforts of those who decide to cut back on consumption.

There is a potential development impact too.

Africa still relies heavily on agriculture to generate wealth for its people; and it is quite feasible that retailers implementing carbon labels schemes will require African exporters to provide information on their carbon emissions and evidence of carbon emission "reduction plans".

African countries risk losing out financially if they do not receive a premium price for carbon labelled goods.

Africans have a carbon footprint on average 20 times lower than Europeans, yet they potentially face increased costs to trade in the name of climate change mitigation.

The problem of aligning our private choices with public needs can be resolved through putting a price on carbon, for example through a tax.

This will allow consumers automatically to factor in the environmental costs (in this case CO2) when deciding what fridge to buy, how much electricity to use and so on.

Increasing the price of carbon relative to prices of labour and capital also sets a powerful incentive for industry to develop "low carbon technologies" like renewable energy, energy efficient building design and so on.

The UK government target of reducing emissions by 80% in a little over 40 years requires a new industrial "low carbon" revolution every bit as dramatic as the first industrial "high carbon" revolution 150 years ago. That can only be achieved by taxing carbon, not by designing new labels for food.

Alexander Kasterine is a senior market development manager for the International Trade Centre (ITC) in Geneva. The views expressed in this article are those of Mr Kasterine and do not necessarily reflect those of the ITC

The Green Room is a series of opinion articles on environmental topics running weekly on the BBC News website