Environmental Labelling in Europe: EU and National Approaches

This paper considers environmental labelling (or ecolabelling for short) as an informational instrument of environmental policy. It examines some economic aspects of environmental labelling, for example, the function of product certification to overcome market failures for environmental superior products with credence attributes. In particular, the paper focuses on the procedure and problems of the European ecolabelling programme. Besides the European programme also many national private and governmental ecolabel programmes in the Member States exist, and this leads to competition among different ecolabelling programmes. It is argued that the disadvantages of competition are outweighed by its advantages, which are, for example, to alleviate some inherent problems of ecolabelling. However, competition can only be beneficial if the competitive process is steered in direction of consumer interests. To this end, additional institutions and rules should be established to avoid consumer confusion and provide transparency, and to make comparison between ecolabel programmes possible.