A Survey of Environmental Labeling

While the economics literature concerning environmental labeling is relatively sparse, many relevant policy questions have been addressed with the use of both empirics and theory. Very few empirical papers have been written on the subject of ecolabeling, likely due to the difficulty of obtaining data, especially to assess the environmental consequences of labeling. These papers typically pertain to the question of whether labeling programs have an effect on consumer behavior and seek to estimate the premium that is attributed to a product’s environmental attributes. The theoretical literature on ecolabeling is more extensive and addresses several key issues including whether ecolabeling can be harmful to the environment, whether labeling is an effective means to address environmental externalities, the implications of different institutions that certify environmental quality, and the consequences of ecolabeling for countries that engage in international trade. This survey aims to critically review and compare the foremost papers in this literature.