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The Potential Role of Carbon Labeling in a Green Economy

Resources for the Future Discussion Paper No. 12-09

Vanderbilt Owen Graduate School of Management Research Paper No. 2041535

36 Pages Posted: 18 Apr 2012 Last revised: 7 Feb 2013

Mark A. Cohen

Vanderbilt University - Strategy and Business Economics; Vanderbilt University - Law School; Resources for the Future

Michael P. Vandenbergh

Vanderbilt University - Law School

Date Written: April 17, 2012

Abstract

Over the past several years, labeling schemes that focus on a wide range of environmental and social metrics have proliferated. Although little empirical evidence has been generated with respect to carbon footprint labels, much can be learned from our experience with similar product labels. We first review the theory and evidence on the influence of product labeling on consumer and firm behavior. Next, we consider the role of governments and nongovernmental organizations, concluding that global, multistakeholder organizations have a critical part to play in setting protocols and standards. We argue that it is important to consider the entire life cycle of a product being labeled and develop an international standard for measurement and reporting. Finally, we examine the potential impact of carbon product labeling, discussing methodological and trade challenges and proposing a framework for choosing products best suited for labeling.

Keywords: carbon labels, voluntary disclosure, consumer behavior, life-cycle analysis, rebound effect, leakage

JEL Classification: D82, F18, K32, L15, M31, Q54

Suggested Citation

Cohen, Mark A. and Vandenbergh, Michael P., The Potential Role of Carbon Labeling in a Green Economy (April 17, 2012). Resources for the Future Discussion Paper No. 12-09; Vanderbilt Owen Graduate School of Management Research Paper No. 2041535. Available at SSRN: https://ssrn.com/abstract=2041535 or http://dx.doi.org/10.2139/ssrn.2041535

Mark A. Cohen (Contact Author)

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States
615-322-0533 (Phone)

HOME PAGE: http://https://business.vanderbilt.edu/bio/mark-cohen/

Vanderbilt University - Law School

131 21st Avenue South
Nashville, TN 37203-1181
United States

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States
202-328-5000 (Phone)

Michael P. Vandenbergh

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States

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