Lester R. Brown

Chapter 11. Tools for Restructuring the Economy: Ecolabeling: Voting With our Wallets

Labeling products that are produced with environmentally sound practices lets consumers vote with their wallets. Ecolabeling is now used in many sectors of the economy, including to identify energy-efficient household appliances, forest products from sustainably managed forests, fishery products from sustainably managed fisheries, and "green" electricity from environmentally friendly renewable sources. 

Among the youngest of the ecolabels is that awarded by the Marine Stewardship Council (MSC) for seafood. In March 2000, the MSC launched its fisheries certification program when it approved the Western Australia Rock Lobster. Also earning approval that day was the West Thames Herring Fishery. Among the key players in the seafood processing and retail sectors supporting the MSC initiative were Unilever, Youngs-Bluecrest, and Sainsbury's.28 

In September 2000, the Alaska salmon fishery received its certification, the first American fishery to do so. Brendan May, chief executive of the MSC, in referring to the Alaska salmon fishery, said, "With its high profile and international market penetration, it is the perfect product to carry our ecolabel, telling consumers that it is the best environmental choice in seafood. This is a triple victory for Alaska, for the marine environment, and for seafood consumers everywhere."29

To be certified, a fishery must demonstrate that it is being managed sustainably. Specifically, according to the MSC: "First, the fishery must be conducted in a way that does not take more fish than can be replenished naturally or kills other species through harmful fishing practices. Secondly, the fishery must operate in a manner that ensures the health and diversity of the marine ecosystem on which it depends. Finally, the fishery must respect local, national, and international laws and regulations for responsible and sustainable fishing."30 

The MSC's counterpart for forest products is the Forest Stewardship Council (FSC), which was founded in 1993 by the World Wide Fund for Nature (WWF) and other groups. Its role is to provide information on forest management practices within the forest products industry. Some of the world's forests are managed to sustain a steady harvest in perpetuity; others are clearcut, decimated overnight in the quest for quick profits. The FSC distinguishes between these two forms of management in its labels for forest products, whether it be lumber sold at a hardware store, furniture in a furniture store, or paper in a stationery store.31 

Headquartered in Oaxaca, Mexico, the FSC in effect accredits national organizations that verify that forests are being sustainably managed. In addition to this on-the-ground monitoring, the accredited organizations must also be able to trace the raw product through the various stages of processing to the consumer. The FSC sets the standards and provides the FSC label, the stamp of approval, but the actual work is done by national organizations.32 

The FSC has established nine principles that must be satisfied if forests are to qualify for its label. Those managing the forests must have a written plan that describes the objectives and the means of achieving them. The management plan must respect the rights of indigenous peoples who live in the forests or have the responsibility for the forested land. There are numerous other principles, but the central one is that the forest is managed in a way that ensures that its yield can be sustained indefinitely. This means careful selective cutting, in effect mimicking nature's management of a forest by removing the more mature, older trees over time. Simply stated, the management preserves the capacity of the forest to provide both products and services.33 

WWF describes the certification system as a way of "identifying wood and wood products that come from well managed sources anywhere in the world backed up by a label that would be clear, unambiguous, and easily recognized." This provides consumers with the information they need to support good forestry through their purchases of forest products. By identifying timber companies and retailers that are participating in the certification program, socially minded investors also have the information they need for responsible investing.34

In March 1996, the first certified wood products were introduced into the United Kingdom. Since then, the certification process has grown worldwide. As of June 2001, some 24 million hectares of forests had been certified under the auspices of the FSC. This area included more than 300 forests in 45 countries.35 

To support this certification program, forest and trade networks have been set up in Austria, Brazil, Canada, France, Germany, the Nordic countries, Russia, Spain, Switzerland, the United Kingdom, and the United States. These networks, whose combined corporate membership may reach 1,000 by the end of 2001, are part of the vast support group of companies that adhere to the FSC standards in their marketing. Among the world's five largest wood buyers, the top three—Home Base, Home Depot, and Ikea—buy only FSC-certified wood.36

In June 2001, the Natural Resources Ministry in Moscow announced that it was introducing national mandatory certification of wood. Although a small portion of its timber harvest is already certified, buyers' discrimination against the rest of the harvest costs Russia $1 billion in export revenues. The ministry estimates that its uncertified wood sells for 20-30 percent less than certified wood from competing countries.37 

Another commodity that is getting an environmental label is electricity. In the United States, many state utility commissions are requiring utilities to offer consumers a green power option. This is defined as power from renewable sources other than hydroelectric, and it includes wind power, solar cells, solar thermal energy, geothermal energy, and biomass. Utilities simply enclose a return card with the monthly bill, giving consumers the option of checking a box if they would prefer to get green power. The offer specifies the additional cost of the green power, which typically is from 3 to 15 percent.38 

Utility officials are often surprised by how many consumers sign up for green power. Many people are apparently prepared to pay more for their electricity in order to help ensure a stable climate for future generations. Local governments, including, for example, those in Santa Monica and Oakland in California, have signed up to use green power exclusively. This includes the power they use for municipal buildings as well as that required to operate various municipal services, such as street lights and traffic signals.39 

Many corporations are signing up as well. Toyota's North American marketing headquarters in California, with some 7,000 employees, has opted for green power. Literally scores of companies in California—some larger, like Kinko's and Patagonia, and many smaller ones—are subscribing. Even colleges and universities are getting in on the act. In April 2000, as an Earth Day project, students at the University of Colorado sponsored a referendum that committed themselves to an increase in student fees of $1 per semester in exchange for the university's purchase of green power. The measure was approved by an overwhelming 85 percent of the voters. In the San Francisco Bay area, some 30 churches are also subscribing to green power. Within the Episcopal church, a group called Episcopal Power and Light has launched a nationwide effort to get not only churches to buy green power, but their members as well.40 

The net effect of these growing numbers of green power proponents is a tidal wave of demand that is forcing many utilities to scramble in their search for an adequate supply of green electricity. One reason wind farms are springing up in so many states is that this is one of the fastest ways of bringing new green power online. While green power marketing appears to be more advanced in the United States, it will likely spread to other countries soon. 

Other types of ecolabeling include the efficiency labels put on household appliances that achieve a certain standard in the use of electricity or other forms of energy. These have been in effect in many countries since the energy crisis of the late 1970s. There are also green labels provided by environmental or governmental groups at the national level. Among the better known environmental seal of approval programs are Germany's Blue Angel, Canada's Environmental Choice, and the U.S. Environmental Protection Agency's Energy Star.41