Page last updated at 15:37 GMT, Tuesday, 31 March 2009 16:37 UK

Carbon labels present taxing problem

Alex Kasterine
Alexander Kasterine

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.

Hilary Benn
Taxes, labels or bans: which is the brightest idea?

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.

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

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.

Refrigerators and washing machines on sale
Manufacturers and retailers present a choice of carbon labels

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.

James Hansen
Jim Hansen has argued that only taxes can cut emissions

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 adviser 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

Do you agree with Alex Kasterine? Are carbon labels an ineffective way to tackle climate change? Should policymakers focus their efforts on carbon taxes? Or are schemes that give consumers more information about the impact of their purchases a step in the right direction?

A diamond mined to support a war effort, gold ore mined and dumped in a poorly constructed leach pit, beef raised on forest land burnt over with soil washing away - how do you put a price on these let alone a new price tag depicting carbon footprint.. Tagging is too open to abuse for comparison shopping purposes but corporations and war lords should not enjoy the same price advantage as a small scale sustainable farmer or a child lucky enough to find a shinny pebble on the beach.
Dale Lanan, Longmont, Colorado, USA

Carbon Labelling definitely will not be a success if the public aren't aware of what it entails. I agree with the fact that the information will just be overlooked, just like nutritional info on the back of any product. However, with effective campaigning to raise awareness, I think it would have a higher success rate. In terms of reducing emissions by 80%, Carbon labelling alone certainly won't be enough. I think that a top-down approach IS necessary in order to achieve accurate results and eliminate the element of doubt that you get on an individual basis. It's difficult to make people actively involved in reducing emissions if they don't see any actual positive results, or even some personal benefits. But if it's enforced via taxes, the issue can be addressed faster. However, I believe that it's unfair to enforce global guidelines of reducing emissions by X amount without looking around and seeing where the highest emissions are coming from. If China is polluting the atmosphere and contributing towards global warming at a higher rate than other countries through their greenhouse gas emissions, then the tax system there should be most stringent. Similarly, the countries that emit less should have to pay less tax. This way, we create a hierarchy which is based upon literally cleaning up your own mess, and taking responsibility for your actions.
Harshita, Abu Dhabi, United Arab Emirates

Fairly ridiculous - as usual. Unlikely to have any significant effect. If it does have an effect it will be to increase poverty in those nations furthest from the western consumers. It's time to have some REAL solutions. The ship bringing the 'smoothy' doesn't emit any CO2. It's the fossil fuel it runs on which releases CO2. Lets start seeing some serious investment on non-fossil fuels - not nonsense like labels.
John, England

I think that this just adds another level of "do nothing" employment for somebody's lethargic cousin. For the small vendor, the costs involved to comply with this could well be a kiss of death. And the small vendor is also the local employer. We've become a consumer culture. Fix that and the carbon problem goes away.
Bill in Detroit, Detroit, MI USA

As a consultant who works on the production of the values which are used on the labels, I can see the benefit in them, but not yet. The only way they will work is to use the values that are identified in a trading system, where we are all charged for our carbon at the same point as we are for the cost of a product or service. The total allowance can then be tracked like a bank account, and we are all meant to make sure those balance. The major difference being that the carbon account will reduce on an annual basis. It is unfortunate that at the moment a solid system (PAS2050 - the technical standard behind the label) is being used as a 'green' marketing tool when it is fundamentally useless without a trading or comparison system. Lets hope that we get somewhere on all of this soon.
Simon, Wyboston, England

The point about carbon labels as effective as nutrition labels is valid. Adding horrible math skills makes it worse. Since when is 2700g only 8% of 21kg? I thought the metric system was supposed to make things easier.
Mike O'Gara, USA

Clearly, consumers respond to price signals much more rapidly than they respond to their consciences. The problem with many of the products and services we buy is that the environmental costs (CO2 emissions, noise pollution, light pollution etc) of bringing them to market are not fully factored into the price to the consumer. It's time these "negative externalities" were costed and reflected in prices. I'm all for higher taxes on energy.
Jane, Geneva

Yeah, lets not bother .... if every person on the planet lived as an affluent Westerner then we would need 4 more planets, makes this economic slowdown seem as if its beneficial?
Ricardo Tew, Poole UK

Of course carbon labels are a good thing - it puts power in the hands of the consumer, and pressure and incentives on business. Only by changing business practices can we reduce carbon emissions and that's all business not just airlines etc. I went to the Carbon Trust's website and the labelling scheme seemed comprehensive - on Walkers Crisps already etc - maybe it should be made compulsory within say 5 years. on the third world point the examples at this site showed Kenyan beans had a lower footprint than Dutch ones so not clear-cut who will win and lose.
Peter Howard, Brighton, UK

Are carbon labels the solution to climate change? No. Are they a way in which companies such as Tesco can change the way consumers think about what they are buying? Yes. Governments have not yet restricted consumers with rules about what they can and can't buy. Whether they should or not is a separate issue. Giving the consumer more information about what they are buying is a move which is to be applauded. Faced with two similar products, a climate minded person may want to know which product has less effect on the environment. OK, in these early stages your average shopper may not be thinking along these lines when choosing what to buy but, when the idea settles in, it could be as familiar a concept as checking which product has fewer calories or less salt etc. When the consumers start making decisions based upon this information the manufacturers may start packaging and sourcing their products with this in mind. If the demands of a well-informed consumer group dictates that they do not wish for enviromentally damaging products shipped from half way round the world then so be it. The people will have spoken.
Gordon Craig, Edinburgh, UK

There is a strong push for individual/consumers to 'choose' to save the world. This absolves government and other regulatory bodies from acting; right when they need to. Consumers can't stop climate change by themselves... especially if speedy mathematics are required under flourescent supermarket lights. It sounds like another 'feel good but don't change a thing' marketing trick.
Bronwyn, france

I can't take any of this seriously, much as I'd like to. The problem is that I just don't believe that CO2 is a major factor in climate change. I've spent months seeking some sort of conclusive evidence that it is, but that evidence doesn't seem to exist. What does exist is more hype, conjecture, preconception, propaganda, junk science, dodgy statistics, and scaremongering than you can shake a stick at.
Dave, Doncaster

It seems to be a special department to perform all those tax procedures and a command of people who will go to work every day using their fuel-eating cars, electricity for their computers and so on. But the goods will be produced anyway with taxes or without (as the consupmtion is increasing but not decreasing)and CO2 will be emitted as well. It only means that African goods will be less competitive in comparison with those from higher developed countries.
Svetlana, Moscow, Russia

As a Johannesburg resident I can say that maybe Africa needs these measures. It is shocking how gung-ho people are over here about emissions. The biggest culprits are manufacturers who CAN do something but just don't because Africa does not HAVE to. Some tough love is what we need over here.
Marita , Johannesburg, South Africa

-its always the same thing, tax tax tax. make the working people pay. someone should tell al gore, prince charles and prince andrew flying in private jets and helicopters to play golf at the other end of the country, or flying round the world telling the world to cut down.
bernie james, romford, essex. england.

Mankind has very little effect on the carbon footprint. What is wrong with the world today, is big government, lack of commonsense and crooks trying to control every one and every thing. I'm sorry but it anger me to see government brain washing our children and the people of the world, just for profit and gain for the very few. Dan
Dan Fair, Noryh Pole, USA

I don't care whether products have carbon labels or not. Unless countries like America and China make serious efforts to reduce their emissions then believing that UK shoppers are going to influence climate change is an ignorant conceit. UK emissions are less than 5% of the world total, and China's is increasing every year.
Dene Bebbington, Swindon, Wiltshire

Couldn't care less about these idealistic but non realistic; goat woolen sock people. It's always them who want to decide about others people money. Here we try to save people instead of spending without concern hard earned tax money of western blue/white collar workers. These do gooders should start paying out of their own pocket.
Van de Kerkhof, Bujumbura

Definitely 'high carbon' taxes would be more effective than the carbon labels. But Labeling too is very important aspect as it provides the relevant information. Initially, lower rates of taxes may be adopted with labels containing carbon emission details and manifest the reasons properly that why people are being taxed. We need to build effective policies on things like cement production, functioning of oil refineries, production of rice, fossil fuels etc These are all important but secondary as we need to control the human population of the planet first.
Sanjay Singh Thakur, Indore,India

I think carbon labels would be a great idea if a consistent method can be found for comparing products. Perhaps carbon taxes would be more effective but that doesn't mean other initiatives are useless. Aside from that, I hope Innocent Drinks aren't saying a smoothie is 8% of the daily allowance since 2,700g is 12% of 21kg not 8%.
Dave, Singapore

going veg will solve more than 25% of the problem. its proven internationally and no more debate needed on this. government may help controlling the use of new wooden furniture / big cars / papers / plastic bags / 2 & 4 wheeler racings on petrol & diesel / official travelling(Video-Con). If it is difficult to commercialize solar vehicles then we may start using them in the racings. lets do our bit anyway.
Vik, Hyd, India

Yes I agree, the government/(world) should design laws that would be effective in shifting from High Carbon to Low Carbon. Taxing would really do it.

The caption to the photo on your story reads: "Taxes, labels or bans: which is the brightest idea?". This loaded "choice" excludes the widespread point of view of those who do not believe media and politician hype about the evils of carbon dioxide. In a time when people's faith in government and establishment organs like the BBC is waning, this sort of stuff is not doing yourselves any favours.
Angelico Rizzi, Kobe, Japan

This assessment remains somewhat optimistic, which highlights the flaw in the carbon trading regime. It was never designed to alter life styles, but instead to create a marketable security for financial trading, the carbon credit. Unfortunately, many of the real polluters, be they large corporate or individual, are going to evade carbon responsibility just as many or most corporations presently evade or minimise their tax exposure. The whole idea is fatally flawed, it will only succeed in driving up prices to responsible small consumers. Given the present state of derivative markets, is the world's carbon emission status something so trivial that can be safely left in the hands of the next Bernie Madoff? Some kind of material change is actually necessary.
Stuart Munro, Seoul Korea

I think that neither carbon labels, nor taxes are the answer. The problem is that we have grown so acustomed to to the way that we are living, that it is ourselves that must change. The tactic being used now are the best way. keep people aware of the problem, and eventualy, I belive, people will finaly get the point. I just hope that people will come about before it is too late!
Dieter Sweeney, Portland OR, USA

Of course carbon labels will harm exports. The world's current economic structure is not set up in such a way that is conducive to green economics. They can certainly coexist, as some companies like Toyota have capitalized from environmentally friendly products (the prius), but in general the point is that there will be a restructuring of things to live more eco-friendly and unfortunately the world economy will see setbacks while this is happening. It is a small price to pay for making our world a sustainable one.
Jameson Bell, Burlington, VT USA

I would said that carbon label alone will not and is not an effective way to fix the climate problem. However, it is might improve the current climate if we, the consumer, can compare and read the label on the same product category.
Hung Ngo, Garden Grove, CA

I think carbon labels are ineffective They do not give the whole picture, How can the average consumer remember how much of there 21 kg a day have been used, Or how much of the daily allowance has been taken up with just getting to the shop in the first place
Jenny, Reigate

As these labels show, we are not currently prepared to make major sacrifices to reduce greenhouse gas emissions. A label is a cheap way to look like you're doing something when actually you're doing nothing. Just like offsetting, burning wood instead of oil, and having a "Vegetarians emit less gas" bumper sticker on your Range Rover. Unfortunately, major behaviour-changing "green taxes" have become politically impossible in this country due to the backlash against ten years of stealth taxes. People simply think that any tax "change" is a tax "rise" because they no longer trust politicians. Taxing it and letting people decide where to cut back is also philosophically opposed by the current Labour government which wishes to micro-manage every aspect of our lives.
Ian Nartowicz, Stockport, England

As with so-called 'Fair Trade' produce, this will no doubt be subverted by supermarkets. They will target low-carbon goods at a particular segment of the market - the "affluent and environmentally aware middle classes" - and charge a premium price for these products. The rest of the population will carry on as normal. It is deeply unpopular, but internalising the cost of our carbon emissions by means of a carbon tax will be far more effective - but what political party is going to advocate that?
Paul A, London,UK

Most sensible trade measures that seek to place additional costs on imports according to carbon emitted in production (for example, border tax adjustments) make exceptions for Least Developed Countries (LDCs) and countries with "comparable" efforts to reduce climate change. African countries are only in danger of being strapped with additional and debilitating costs related to climate change policies to the extent that developed countries' climate change policies are politically insensitive to those African nations' vulnerability. Contrary to what you might argue in response--that differentiating between LDCs and other countries is a violation of GATT/WTO rules--(and your opinion would have plenty of good company), Article XX(g) of the GATT permits countries to enact policies that violate the Most Favored Nation or National Treatment principles if they are aimed at conserving a natural resource. In sum, the concern evoked by this article is overblown. Developed nations, including Great Britain, have plenty of WTO-compatible policy tools at their disposal to reduce climate change while being sensitive to the vulnerabilities of developing nations.
Andrew Deeringer, San Francisco, CA

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