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The potential role of carbon labeling in a green economy


  • Cohen, Mark A.
  • Vandenbergh, Michael P.


Over the past several years, labeling schemes that focus on a wide range of environmental and social metrics have proliferated. Although little empirical evidence has been generated yet with respect to carbon footprint labels, much can be learned from our experience with similar product labels. We first review the theory and evidence on the role of product labeling in affecting consumer and firm behavior. Next, we consider the role of governments and nongovernmental organizations, concluding that international, multistakeholder organizations have a critical part to play in setting protocols and standards. We argue that it is important to consider the entire life cycle of a product being labeled and develop an international standard for measurement and reporting. Finally, we examine the potential impact of carbon product labeling, discussing methodological and trade challenges and proposing a framework for choosing products best suited for labeling.

Suggested Citation

  • Cohen, Mark A. & Vandenbergh, Michael P., 2012. "The potential role of carbon labeling in a green economy," Energy Economics, Elsevier, vol. 34(S1), pages 53-63.
  • Handle: RePEc:eee:eneeco:v:34:y:2012:i:s1:p:s53-s63 DOI: 10.1016/j.eneco.2012.08.032

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    Cited by:

    1. Zhao, Rui & Zhou, Xiao & Han, Jiaojie & Liu, Chengliang, 2016. "For the sustainable performance of the carbon reduction labeling policies under an evolutionary game simulation," Technological Forecasting and Social Change, Elsevier, vol. 112(C), pages 262-274.
    2. Mika Kortelainen & Jibonayan Raychaudhuri & Beatrice Roussillon, 2016. "Effects Of Carbon Reduction Labels: Evidence From Scanner Data," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1167-1187, April.
    3. Liu, Tiantian & Wang, Qunwei & Su, Bin, 2016. "A review of carbon labeling: Standards, implementation, and impact," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 68-79.
    4. Wu, Peng & Xia, Bo & Wang, Xiangyu, 2015. "The contribution of ISO 14067 to the evolution of global greenhouse gas standards—A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 142-150.
    5. Chen, Xu & Wang, Xiaojun, 2016. "Effects of carbon emission reduction policies on transportation mode selections with stochastic demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 90(C), pages 196-205.
    6. Grebitus, Carola & Steiner, Bodo & Veeman, Michele M., 2016. "Paying for sustainability: A cross-cultural analysis of consumers’ valuations of food and non-food products labeled for carbon and water footprints," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 63(C), pages 50-58.
    7. Shewmake, Sharon & Okrent, Abigail & Thabrew, Lanka & Vandenbergh, Michael, 2015. "Predicting consumer demand responses to carbon labels," Ecological Economics, Elsevier, vol. 119(C), pages 168-180.
    8. Guillaume Gruère, 2015. "An Analysis of the Growth in Environmental Labelling and Information Schemes," Journal of Consumer Policy, Springer, vol. 38(1), pages 1-18, March.
    9. Alistair Munro & Marieta Valente, 2016. "Green Goods: Are They Good or Bad News for the Environment? Evidence from a Laboratory Experiment on Impure Public Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(2), pages 317-335, October.
    10. Elofsson, Katarina & Bengtsson, Niklas & Matsdotter, Elina & Arntyr, Johan, 2016. "The impact of climate information on milk demand: Evidence from a field experiment," Food Policy, Elsevier, vol. 58(C), pages 14-23.
    11. Conte, Marc N. & Jacobsen, Grant D., 2016. "Explaining Demand for Green Electricity Using Data from All U.S. Utilities," Energy Economics, Elsevier, vol. 60(C), pages 122-130.
    12. Shewmake, Sharon & Okrent, Abigail M. & Thabrew, Lanka & Vandenbergh, Michael, 2012. "Carbon Labeling for Consumer Food Goods," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124369, Agricultural and Applied Economics Association.
    13. Matsdotter, Elina & Elofsson, Katarina & Arntyr, Johan, 2014. "Got green milk? A field experimental trial of consumer demand for a climate label," Working Paper Series 2014:2, Swedish University of Agricultural Sciences, Department Economics.
    14. Schmalensee, Richard, 2012. "From “Green Growth” to sound policies: An overview," Energy Economics, Elsevier, vol. 34(S1), pages 2-6.
    15. Li, Xiaogu & Jensen, Kimberly L. & Clark, Christopher D. & Lambert, Dayton M., 2015. "Consumer Willingness-to-Pay for Non-taste Attributes in Beef Products," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196719, Southern Agricultural Economics Association.
    16. Haq, Gary & Weiss, Martin, 2016. "CO2 labelling of passenger cars in Europe: Status, challenges, and future prospects," Energy Policy, Elsevier, vol. 95(C), pages 324-335.
    17. Matsdotter, Elina & Elofsson, Katarina & Arntyr, Johan, 2014. "Got green milk? Field Experimental Trail of Consumer Demand for a Climate Label," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 183076, European Association of Agricultural Economists.

    More about this item


    Carbon labels; Voluntary disclosure; Consumer behavior; Life-cycle analysis; Rebound effect; Leakage;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F18 - International Economics - - Trade - - - Trade and Environment
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming


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