Carbon labeling on my mind

[Crossposted at my work blog.]

BusinessWeek’s GreenBiz blog tipped me off to a recent BW article on carbon labeling. Carbon labeling means to label consumer products with an indicator of how much greenhouse gas was emitted in the production and distribution of each product to the point of having it on the shelf in front of the customer. The idea has been around for a while, but only recently have manufacturers (like Timberland shoes) and retailers (like Tesco, a British chain of mega-grocery stores) started to implement carbon labeling programs. As it turns out, according to BW’s article, carbon labeling is tricky for a few reasons. First, it can be tremendously difficult to squeeze all the aspects of modern, globalized manufacturing into a single numerical measurement of greenhouse emissions. Second, for such programs to work, there needs to be a fair bit of consumer education so that people will have any idea of what these carbon labels actually mean. (If a label says, “50 grams of carbon,” is that good or bad or what?)

Here are some thoughts suggestions that probably have been thought of by other people as well, but what the hey:

1) The ideal carbon label will be structured similarly to the energy guide labels on refrigerators and other appliances we see in the US. That is, on a line that shows the minimum-to-maximum amount of greenhouse emissions caused by similar products to the one in your hand (like all canned vegetables or all pasta products or all color televisions) as well as an indication of where on this line the individual product falls. If canned vegetables incur anywhere between 10 and 100 grams of carbon-equivalent greenhouse emissions (using made up numbers for sake of the example), and the can in your hand incurred 30 grams, then you’d see something like “10”””“30“””””””””“100″³. That’s the first part of the labeling scheme, and would be called the “Manufacturing & Distribution” count. For some products, like canned vegetables, that would be enough. For products like TVs that require the ongoing consumption of energy in use, there would be another line (like the existing energy guide labels on refrigerators and such) that indicates the relative use of energy going forward, based on the average greenhouse emissions of the electric grid across the country. This would be the “Usage” count. Finally, for products that have both counts on their label would be a third measurement line called “Expected Lifetime” which would be a combination of the “Manufacturing & Distribution” count and an estimate of the probable cummulative lifetime “Usage” count, for example the combination of M&D plus 10 years worth of normal usage of a TV. Some products might have high M&D counts but be more efficient in use, and therefore their lifetime impact would be lower than an alternative product that had a lower M&D count but was inefficient in usage.

2) I realize that this notion of an ideal carbon label still ignores the difficulties in actually figuring out accurate counts for greenhouse emissions; but if you can get decent estimates of the emissions, then I think that’d be a good way to do the labeling in a way that consumers could interpret and make meaningful choices between products. You have to have the relative position of each product on a scale for the number to mean anything.

3) If you want to educate the populace on how to use these things, teach 10 year olds about it. They will quickly and insistently instruct the rest of us, treating us like absurd fools until such time as we master the system as well as they have.

4) The trickiness of figuring out accurate and consistent greenhouse emission labeling is an argument in favor of using carbon taxes/cap-and-trade systems. Sorta. On the one hand, the financial tool of carbon tax/cap-and-trade “” implemented on upstream sources of carbon (and other greenhouse gases) “” easily introduce an effective alternative to the carbon label into the economy. Product prices will rise relative to the amount of extra cost their manufacturers & distributors face as a result of the greenhouse gas emissions incurred during manufacturing and distribution. The can of corn that involved more greenhouse emissions will incur a greater carbon-cost increase than the alternative can of corn that involved less emissions. However, this isn’t totally satisfactory, because so much else is involved in pricing: the “price signal” is terribly noisy and prone to distortion and/or misinterpretation. In addition, there are some “” how many? “” people willing, even eager, to pay more for products that they are confident involve less greenhouse emissions. Working the greenhouse effect of a product into the product’s price is a good thing, but that doesn’t obviate the usefulness of a more fully informed consumer as a second level for reducing carbon footprints. One further thought on this, though: it’s possible that if a carbon tax is implemented, the tax itself could be used as a tool for measuring the greenhouse emissions on a product and therefore be the basis of the carbon label. Businesses already keep track of the taxes they pay, and so the added burden of accounting should be less than trying to account for a new system of purely physical carbon emission counting. Right? Because the carbon tax itself is predicated (or should be) on a carbon-equivalent scale, it would be an easy translation to take the cumulative taxes paid on a product through its manufacturing and distribution lifetime and restate that as an amount of carbon emitted during the process. The increasing use of rfid chips in distribution chains only makes this easier to implement, as you have better tracking going on and the ability to link movement of materials and goods to the taxes those materials and goods incur for the businesses making and moving them. (Having said this, I still favor a Peter Barnes’ style cap-auction-trade-dividend approach over the carbon tax approach.)

5) I gotta get back to work!