Stimulating carbon efficient supply chains : carbon labels and voluntary public private partnerships

This thesis looks at the potential of labeling products with life cycle greenhouse gas emission information as a bottom-up, complementary alternative to carbon cap and trade systems. By improving the transparency of product carbon footprint information, a market for low carbon intensity products can be created. The conduct of such product life cycle assessments often allows companies to uncover cost effective emission reduction opportunities typically in the order of 10%-20%. Society benefits both from the increased supply chain efficiency of these companies as well as the heightened awareness of climate change among consumers as companies communicate these information to them. An examination of the history of the development of the nutritional label and various eco-labels in the U.S. highlights the importance of timely government intervention in setting guidelines and standards to prevent companies from misleading consumers with unsubstantiated product health or environmental claims. Case studies of current carbon labeling initiatives worldwide demonstrate the benefits of government affiliation in building credibility during their early stages. This affiliation helps in attracting the participation of large established companies who provide strong reinforcing effects that are crucial to the growth and success of new initiatives. There is still lack of consensus about the ideal format for a carbon label. A seal of approval type label could be ideal to attract companies in the initial stages which can later be succeeded by an information disclosure based format as more consumers start to understand the meaning of product carbon footprints in the future.