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the International Institute for Industrial and
Environmental Economics

Carbon Labelling
Martin Petrushevski MESPOM 2012-2014
9 November, 2013

Course: IPP – Product Policy Autumn 2013
2

Presentation Outline
 What is a carbon label?
 Why carbon labels?
 Potential impact of carbon labels
 Case study “Max Burger”

 Implementation challenges
 Case study “Tesco”

 Discussion

Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
3

What is a carbon label?

First party
certified
Third party
certified

Image source: bbc.co.uk

Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
4

Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
5

Carbon labelling schemes

2007
+
Image sources: KRAV, Svenskt Sigil, Ecobuild (Carbon Trust)

Martin Petrushevski MESPOM 2012-2014
Autumn 2013

Course: IPP – Product Policy
6

Why carbon labels?
CO2
CH4
N2O

Martin Petrushevski MESPOM 2012-2014

Image source: Economist.com

Course: IPP – Product Policy Autumn 2013
7

EU Sustainable Consumption and Production Action Plan
(2008)

UK Sustainable
Development
Report (2005)

UN Agenda 21 (1992)
Image source: bbc.co.uk

Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013

Image source: housingworks.org
8

Martin Petrushevski MESPOM 2012-2014

Image source: The Wall Street Journal

Course: IPP – Product Policy Autumn 2013
9

Potential impact of carbon labels
 Publicly commit to reduce carbon embodied in their products

 Encourage retailers to promote less-carbon intensive products
 Utility maximization – consumers have the perfect information about price and
quality of the given product
 “Search” vs. “Credence” attributes

Credence
information

Consumer buys less expensive products without environmental benefits
and uses the extra money to donate it to an environmental cause?!
Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
10

What drives consumer preference in
selecting food products?
Quality

Fairtrad
e

Environmental Performance

Organic
Locally grown

Price
Taste
Information
Guilt

Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
11

Max Burger (Sweden)
In 2008 CO2 labels on
menus

Image source: Max
Burgers
Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
12

Materials

Life cycle approach of carbon labels

Processing

Martin Petrushevski MESPOM 2012-2014

Transport

Use

Course: IPP – Product Policy Autumn 2013

Disposal
13

Implementation challenges
 LCA tool to calculate carbon emissions
▪ Cradle to grave assessment
 Production
 Transport
 Storage

 Consumption
 Disposal
▪ Evaluate emissions
▪ Cost of assessment
▪ Time needed
Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
14

2007 - 70,000 products to be carbon labelled
2012 - Stops after labelling 500 products
Consumer complaints on the labels
Difficult to understand
Slow-take up among other retailers
“Minimum of several months’ work”

The Guardian
Rate - 125 per year
Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
15

Implementation challenges (contd.)
 System boundaries in the LCA
 Cheaper and more efficient methods for data collection are needed
 The way final information is conveyed by the producers
 Increase consumer knowledge and awareness

 Switch from “soft” (voluntary) basis to “harder” (mandatory) policies
 Worldwide implementation to be fully effective
 Align with other programmes to address more issues from climate change
(acid rain, eutrophication, water footprint)
 Data availability and measurement of contribution to GHG reduction

Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
16

Discussion topics
 Can consumer choices contribute to reducing GHGs?!

 Is carbon labelling better in reducing GHG emissions than ISO 14001 and
EMAS?!
 Better communication of labels or clean up your backyard?
 Credibility (Greenwashing)

 Globally accepted standardization process
 Identify products that yield significant emissions reductions
 Top level policies
 World Trade implications?!

 Worldwide implementation with awareness raising campaigns
 The role of knowledge and time factor? (nutrition labels)
Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
17

Thank you for your attention

Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
18

Make your own carbon footprint label!
 Choose any product
 Determine method of acquiring the data
 Scope and boundaries of the assessment
 Price to make the study

 Final design on how to convey the information
 Determine success of the label

3 mins – GO!
Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013

Image source: Martin
Petrushevski
19

Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013
20

References
 BBC. Co.UK 2010. URL:
http://news.bbcimg.co.uk/media/images/49486000/jpg/_49486286_ct_label_mi
nimum.jpg
 Economist 2011. URL: http://media.economist.com/images/imagesmagazine/2011/06/04/TQ/20110604_TQD004.jpg
 Housingworks.org. URL: http://www.housingworks.org/i/blog/power-to-thepeople02.jpg
 Solarsedar 2012. http://solarserdar.wordpress.com/2012/07/09/eu-carbonlabels/
 The Guardian 2008. URL: http://static.guim.co.uk/sysimages/Environment/Pix/pictures/2008/02/05/walkers_CheeseandOnion_460.jpg

 The Wall Street Journal. URL:
http://online.wsj.com/article/SB122304950601802565.html
Martin Petrushevski MESPOM 2012-2014

Course: IPP – Product Policy Autumn 2013

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Petrushevski Martin - Carbon Labelling

  • 1. the International Institute for Industrial and Environmental Economics Carbon Labelling Martin Petrushevski MESPOM 2012-2014 9 November, 2013 Course: IPP – Product Policy Autumn 2013
  • 2. 2 Presentation Outline  What is a carbon label?  Why carbon labels?  Potential impact of carbon labels  Case study “Max Burger”  Implementation challenges  Case study “Tesco”  Discussion Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 3. 3 What is a carbon label? First party certified Third party certified Image source: bbc.co.uk Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 4. 4 Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 5. 5 Carbon labelling schemes 2007 + Image sources: KRAV, Svenskt Sigil, Ecobuild (Carbon Trust) Martin Petrushevski MESPOM 2012-2014 Autumn 2013 Course: IPP – Product Policy
  • 6. 6 Why carbon labels? CO2 CH4 N2O Martin Petrushevski MESPOM 2012-2014 Image source: Economist.com Course: IPP – Product Policy Autumn 2013
  • 7. 7 EU Sustainable Consumption and Production Action Plan (2008) UK Sustainable Development Report (2005) UN Agenda 21 (1992) Image source: bbc.co.uk Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013 Image source: housingworks.org
  • 8. 8 Martin Petrushevski MESPOM 2012-2014 Image source: The Wall Street Journal Course: IPP – Product Policy Autumn 2013
  • 9. 9 Potential impact of carbon labels  Publicly commit to reduce carbon embodied in their products  Encourage retailers to promote less-carbon intensive products  Utility maximization – consumers have the perfect information about price and quality of the given product  “Search” vs. “Credence” attributes Credence information Consumer buys less expensive products without environmental benefits and uses the extra money to donate it to an environmental cause?! Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 10. 10 What drives consumer preference in selecting food products? Quality Fairtrad e Environmental Performance Organic Locally grown Price Taste Information Guilt Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 11. 11 Max Burger (Sweden) In 2008 CO2 labels on menus Image source: Max Burgers Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 12. 12 Materials Life cycle approach of carbon labels Processing Martin Petrushevski MESPOM 2012-2014 Transport Use Course: IPP – Product Policy Autumn 2013 Disposal
  • 13. 13 Implementation challenges  LCA tool to calculate carbon emissions ▪ Cradle to grave assessment  Production  Transport  Storage  Consumption  Disposal ▪ Evaluate emissions ▪ Cost of assessment ▪ Time needed Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 14. 14 2007 - 70,000 products to be carbon labelled 2012 - Stops after labelling 500 products Consumer complaints on the labels Difficult to understand Slow-take up among other retailers “Minimum of several months’ work” The Guardian Rate - 125 per year Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 15. 15 Implementation challenges (contd.)  System boundaries in the LCA  Cheaper and more efficient methods for data collection are needed  The way final information is conveyed by the producers  Increase consumer knowledge and awareness  Switch from “soft” (voluntary) basis to “harder” (mandatory) policies  Worldwide implementation to be fully effective  Align with other programmes to address more issues from climate change (acid rain, eutrophication, water footprint)  Data availability and measurement of contribution to GHG reduction Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 16. 16 Discussion topics  Can consumer choices contribute to reducing GHGs?!  Is carbon labelling better in reducing GHG emissions than ISO 14001 and EMAS?!  Better communication of labels or clean up your backyard?  Credibility (Greenwashing)  Globally accepted standardization process  Identify products that yield significant emissions reductions  Top level policies  World Trade implications?!  Worldwide implementation with awareness raising campaigns  The role of knowledge and time factor? (nutrition labels) Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 17. 17 Thank you for your attention Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 18. 18 Make your own carbon footprint label!  Choose any product  Determine method of acquiring the data  Scope and boundaries of the assessment  Price to make the study  Final design on how to convey the information  Determine success of the label 3 mins – GO! Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013 Image source: Martin Petrushevski
  • 19. 19 Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013
  • 20. 20 References  BBC. Co.UK 2010. URL: http://news.bbcimg.co.uk/media/images/49486000/jpg/_49486286_ct_label_mi nimum.jpg  Economist 2011. URL: http://media.economist.com/images/imagesmagazine/2011/06/04/TQ/20110604_TQD004.jpg  Housingworks.org. URL: http://www.housingworks.org/i/blog/power-to-thepeople02.jpg  Solarsedar 2012. http://solarserdar.wordpress.com/2012/07/09/eu-carbonlabels/  The Guardian 2008. URL: http://static.guim.co.uk/sysimages/Environment/Pix/pictures/2008/02/05/walkers_CheeseandOnion_460.jpg  The Wall Street Journal. URL: http://online.wsj.com/article/SB122304950601802565.html Martin Petrushevski MESPOM 2012-2014 Course: IPP – Product Policy Autumn 2013

Notes de l'éditeur

  1. Practice of publicly communicating, via a label associated with a product or service, the GHG emissions associated with the L.C. of that product or serviceAmendable to reduction (consumer picks the product with the lower carbon footprint)Strengthened and pro-active environmental commitment by a producer
  2. Carbon Trust: chips, Tesco, Dysonairblades, building products, bread, oats, sugar, cementKRAV and Swedish SEAL MeatFishMilk GHG vegetablesAgricultural cropsAccompanied by an information and education campaignResulted in recommendations for climate compatible nourishment
  3. Anthropogenic GHGs in the atmosphereRapid population growthIncreased pressure on resourcesLivestock raisingExpansion of agricultural practicesMany companies and organizations start to AssessLabelmarket the environmental performance of their products*** ONLY COMPANIES??? – PEOPLE?****
  4. Support sustainable consumption in policy reports and declarationsExamples include: (PRESS SPACE)correcting market failure by providing reliable product information to the consumermain aim is for the consumer to make informed decisions
  5. CARS: 1 mile = 1 gallon of CO2SHOES: leather, cow raising, transportation 5%, electricityThe recipe for a low-carbon load of laundry: Use liquid detergent instead of powder, wash your clothes in cool water and hang them out to dry.JACKETS: The majority of the footprint -- 71%, or about 47 pounds -- comes in producing the polyester, which originates with oil.MILK: from cows most emissions, what kind of cases are used for transport from milk processing plant to distribution centerBEER: refrigeration at stores, producing barley and malt, manufacturing glass bottles, open door vs closed door "Consumers are starting to put environmental values into their purchasing decisions, but it doesn't always translate into their being willing to pay a higher price,"
  6. value of added information exceeds the cost of searchconsumers to be familiar with credence information and know its meaning and value. Companies will have the incentive to supply this information Increased revenues = compensate for the resources spent in providing that information, boost company profile and increase reputation among competition. These positive changes will improve relationships between owners, stakeholders and other related bodies in the business portfolio of the company
  7. Social psychology suggests that just because people know their choices will be harmful to the environment does not necessarily mean they will change their behaviour.
  8. Energy efficient grass roofsStarted buying wind powerPlant trees in UgandaReduce packaging from happy mealsIncreased consumer loyalty in the period 2007-2009Added extra 27% of vegetariansDoubled their market share in Sweden
  9. Less competitive in very hostile market conditions.International agreement to reduce the amount of fossil carbon that is extracted each year (e.g. annual reduction of 5% to keep CO_2 below 450ppm).- Scarcity would cause traders to bid up the price of fossil fuels Normal accounting would feed the increases through to end productsConsumers would then get a good idea of the “carbon footprint” by how much each product goes upThey would stop buying those with a big footprint because they would be too expensive
  10. Further research needs to be done on the potential impact of carbon labelling in reducing GHG emissionsRaising Awareness neededCarbon footprinting and labelling policy is relevant but largely top-down in nature, which will facilitate but not necessarily drive a decarbonised food chain. 32 years of lower carbon juice for a trip for 4 (Manchester – Malaga)1.8 years of lower carbon potatoes as avoiding 1 flight