The Potential Role of Carbon Labeling in a Green Economy
Resources for the Future Discussion Paper No. 12-09
36 Pages Posted: 18 Apr 2012 Last revised: 7 Feb 2013
Date Written: April 17, 2012
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: Suggested Citation