Many Americans saw the November 2010 elections as a referendum on the size and reach of government, with voters showing greater skepticism of expansive regulatory efforts. This trend spells potential trouble for many federal initiatives, including environmental protection, to the extent that such efforts are viewed as synonymous with large, expensive government interventions into the economy. Fortunately, government regulation is not the only means of protecting our natural world.
One powerful tool involves empowering individual consumers with knowledge about the environmental impact of their buying decisions. Consumers wield power not only through their personal actions — turning out lights, properly disposing of hazardous materials, and insulating their homes — but also through their ability to shape the retail and commercial market.
All things being equal, consumers want to protect the environment. In a recent Harris Poll, 76% of respondents indicated that they would seek out green products when shopping, and 32% said they would be willing to pay at least a little more for such products. The Boston Consulting Group found similar results in their survey, with 73% of customers considering good corporate records on the environment important to their buying decisions and a majority willing to spend 5% more for green products.
Polling cannot conclusively forecast consumers’ buying patterns. But the actions of large retailers indicate that they are betting on green goods. Many big-box retailers have launched major advertising campaigns based on green approaches, and Wal-Mart now requires suppliers to answer and comply with a detailed environmental self-assessment. Such actions provide evidence that consumers, and by extension the companies that serve them, care enough about the environment to change buying habits.
In today’s world, retail chains succeed by gaining customers on the margins. If a company attracts new green customers without scaring away existing customers, it succeeds. Thus, a minority of consumers, through their individual purchasing decisions, can impact what goods retailers carry and, ultimately, what sells.
Consumer power is of little value, however, if buyers lack information about the relative environmental impact of different products. Today that information is not widely available. What is needed is a form of measurement — an index — that allows consumers to quickly determine a product’s relative impact on the environment. A voluntary labeling system, giving manufacturers the ability to label products with an independent rating, would provide useful information to consumers and a credible rating system for manufacturers and retailers.
A number of retailers in Europe, including Boots pharmacies and Tesco supermarkets, already place carbon footprint labels on some of their products. Carbon footprint labels reflect information about the amount of carbon dioxide released in the manufacturing and transportation of the product, allowing consumers to compare the relative carbon emissions generated by similar products.
Ideally, an index should measure more than carbon dioxide. Even though climate change receives a lot of attention, environmental issues such as clean water and air directly impact local populations and the local environment. An index that captures the broader environmental impact of a product and reduces it to an understandable label will give consumers the ability to make more informed choices.
Products manufactured in the US are likely to fare relatively well under such a program. The United States’ largest trade deficit is with the People’s Republic of China (PRC). According to the Environmental Performance Index (EPI), an index developed by researchers at Yale and Columbia Universities to holistically assess each country’s impact on the environment, the US scores 28% better than the PRC. US manufacturing is also more efficient than manufacturing in the PRC. According to the US Energy Information Administration (EIA), in 2006 the United States emitted less than half as much carbon dioxide as the PRC to produce the same dollar value of goods.
It should be noted that US-made products will not always outscore imports. For example, the EPI ranks both Canada and Mexico higher than the United States on its index. US manufacturers, however, are well positioned to respond to consumer preferences and should be able to compete with our North American trading partners on environmental grounds.
It is invariably tempting to rely solely on government regulation to address issues like environmental protection. But our nation has grown strong by relying on the drive, ingenuity and compassion of its citizenry. Empowering individuals with the knowledge they need to make informed decisions about protecting the environment harnesses these same forces of individual choice. Informed consumers making responsible decisions can create good environmental policy that is affordable and sustainable.
Congressman Robert S. Walker served as Chairman of the House Science Committee and presently is Executive Chairman of Wexler and Walker Public Policy Associates. Richard M. Russell is CEO of VIAforward, a consulting firm. He previously served as a US Ambassador and in the White House and Congress advising the President and members of the House and Senate on science, technology and telecommunications policy.