Authored by: Elliot Laws, Senior Counsel, Pillsbury

August 5, 2008

A famous cartoon frog once lamented, “It’s not easy being green.” What Kermit didn’t realize was how prescient his jingle would ring in the decades to follow.  Today, consumers are faced with a new reality: “It’s not easy to know when someone who claims to be green, is actually green.”

Consumer Difficulty: What is Actually Green?

With today’s commercial emphasis on a cleaner and more sustainable America, it seems that green practices are the new “motherhood and apple pie” of the twenty-first century.

While few would question the importance of sustainable practices to protect the environment, minimize our carbon footprint, and reduce waste output, “greening” is more complicated than it sounds.

There is a new “green sector” in our economy, with manufacturers, retailers, builders and developers jumping on the bandwagon, without stopping to ask or answer the question: “what is green anyway?” What does the term mean? And how is every Tom, Dick, and Mary with a new “green“ product to pitch held to fair and consistent advertising, promotion, and production standards? More importantly, how is the consumer supposed to figure it all out?

This column looks at the federal government’s role in helping to ensure a level playing field for all producers, promoters, and advertisers with regard to the kinds of green claims they can make. Citizens are buying scores of these products and very often paying a premium.  How do they know what they are getting? What are the protections available through the Federal Trade Commission that insure that green marketing is clean marketing?

Green Guides and Green Washing

In 1992, the Federal Trade Commission (FTC) issued guidelines to deter deceptive marketing claims of a product’s environmentally friendly attributes. Officially titled “Guides for the Use of Environmental Marketing Claims – 16 C.F.R. Part 260,” Green Guides perform a critical function: they provide examples of acceptable and unacceptable marketing claims for each category, including: Recyclable/Recycled Content/Source Reduction Claims; Degradability/Compostability; Ozone Safe/Friendly Claims; General Environmental Benefit Claim. The policy was issued during the first wave of green products in order to prevent false and misleading claims. Initially, the FTC brought a series of enforcement actions, but there has been little enforcement since mid 1990’s.

Today, there is a new buzzword to describe this deceptive marketing: “green washing.” However, due to a lack of available information and reliable standards, the ability for consumers to assess the accuracy of these claims is limited.

The FTC’s response has been pursue an update to its Green Guides to help demystify the claims surrounding these new products for consumers and to hold producers, promoters and advertisers to a higher standard. Green Guides are a product of the growing corporate and consumer awareness of environmental issues and concurrent demand for a tool to help sift through the hyperbole and separate the truly green products from the pretenders.

The Green Guides were scheduled for a systematic review and updating in 2009, but due  to the large increase in green marketing claims and the evolution in the types of claims being made, the FTC accelerated its schedule to review the Green Guides in 2008.

Public meetings have been held to address this growing challenge.  They have addressed issues from greenhouse gas emissions to standards related to green buildings.  Additional public meetings may be scheduled in the future before the FTC decides whether an update is necessary and what changes and additions are required.

“Sustainable” and “renewable” claims could also be covered by the new version of the Green Guides, along with provisions on Carbon Offsets and Renewable Energy Certificates (RECs).  They are looking at Incorporating 3rd Party Certification of green claims and establishing ISO standards on environmental marketing claims and Life Cycle Assessments for guidance. While it is unclear what changes FTC will make to current Green Guides and when they will be re-issued, it is likely that they will encompass new technologies, products, and types of marketing claims.

Conclusion

While it may take some time for the process of managing sustainable products and practices to catch up with the burgeoning field of green products, some progress has been made. Until updated guidance on green marketing claims is in place, a healthy skepticism on the part of consumers and more caution on the part of manufacturers, promoters, and advertisers before making green claims and promises is well advised.

Authored by: G. Tracy Mehan, III. Principal, The Cadmus Group, Inc.

March 2008

It is understandable, but nevertheless disappointing, that environmental and natural resources issues have not received much attention during the presidential campaign to date.

Two wars, illegal immigration, loss of manufacturing jobs, health care, a housing bubble, and a cratering stock market rivet the attention of the candidates and the voters both of whom are groping for a path forward amidst great uncertainty at home and abroad.

Thus, the environment is hardly a “top-of-the mind” issue, commanding only little attention on the campaign trail. There is some discussion of climate change, usually paired with energy independence or security; but, for the most part, it not drawn much interest this election cycle. Basically, the election is about war and economic insecurity.

There are other reasons why climate change is not getting much play in the political arena. Ironically, these have to do with an unusual degree of consensus on the campaign trail and an emerging one in Congress. All three of the major presidential candidate left standing share the same basic policy orientation in favor of some kind of cap-and-trade program to reduce carbon emissions, the paramount Greenhouse Gas. Second, legislation authorizing such a program has been moving on Capitol Hill, eclipsing every economist’s preferred option, a “revenue-neutral” carbon tax with offsetting tax cuts, say, for corporate or personal income taxes.

This latter option could be justified on supply-side, i.e., pro-growth, and national security grounds, while allowing for total agnosticism as to both the cause and extent of climate change. But in any tax restructuring there are winners and losers, and losers fight more tenaciously than winners in the political scrum. Moreover, most voters will only hear the word “tax” without hearing or comprehending “revenue-neutrality.” And no one wants to give up their SUVs.

On the other hand, the carbon cap-and-trade option camouflages its higher transaction costs. Hence, its political palatability renders its complexity tolerable.

Climate change is an all-encompassing issue which has consequences for forestry, water management, marine biology, wildlife, and just about everything else. That said, it has sucked all the oxygen out of the room in terms of the public dialogue on a broader range of environmental issues. If it’s not climate, it’s not worth talking about.

What are those other issues which are competing, largely unsuccessfully, with global climate change for prime time? Each of us will have his or her preferred list of issues to be given their 15 minutes of fame. Here are a few possibilities:

• The nation’s waters are suffering from nutrient over-enrichment from unregulated, polluted runoff from agriculture (nonpoint source pollution) and from the growth of impervious surfaces (roads, roofs, parking lots, etc.). The “Dead Zone” in the Gulf of Mexico and the ailing Chesapeake Bay are two examples of these challenges. What, if anything, should the federal government do to either reduce this pollution or at least not aggravate it? New laws? Curtail subsidies? Target existing Farm Bill conservation dollars?
• Is ethanol really the best we can do? It is an inefficient energy source and a voracious consumer of water. Increased corn planting will increase agricultural runoff (see above) and using it all for fuel drives up the cost of food worldwide. This is the result of federal subsidies and tariffs on “good” ethanol from Brazil.
• The nation is facing a severe investment gap in infrastructure generally and in the water and wastewater sectors specifically. What is the proper contribution of local ratepayers versus federal taxpayers if any? Should the federal government fund research on cutting edge technologies (e.g., decentralized, least-cost) and better management practices such as asset management or EMS (environmental management systems)? What about utilizing public-private partnerships and private equity? Or do we go back to large-scale government grants or a trust fund?
• Should Congress renew the Superfund tax or let it be?
• Can the National Forest Service (NSF) really manage the nation’s forests effectively anymore? Over half of its budget goes to fire fighting, and the NSF is constantly tied up in court.
• Will we ever reauthorize and reform any of the major environmental laws? Congress has not been able to do so since it reauthorized the Safe Drinking Water Act in 1996.

Environmental and natural resources policy is a very polarized subject reflecting what has been a polarized Red State/Blue State America. With an election less than a year away, it would be edifying to hear more about these matters from the presidential candidates in the months ahead.