Green Commerce Blog

Eco-label products: supply decides uptake 2011-10-13 - No Comments

Recent research shows that the quantity of green products on the market and how they are distributed significantly affects their consumption. Availability also drives consumption.


Governments should invest resources in increasing the supply and availability of ‘green’ labelled products, rather than getting involved actively in their labelling and certification, a recent study from the University of Mannheim in Germany concludes.


Purchases of eco-labelled goods and organic food were analyzed in 18 European countries using data from a 2007 Eurobarometer survey on attitudes of European citizens to the environment. The study looked at national labels, both public and private, including Blue Angel and BIO-Siegel in Germany, Nordic Swan in Denmark, Sweden and Finland and AB in France. Countries with national eco-labels also tend to have the most products with the EU eco-label.


The importance of four factors was tested in determining green purchase patterns:

1.    Government involvement in the label;

2.    The number of labels in a country;

3.    The quantity of green goods on the market – excluding imports and exports; and

4.    The density of small retailers with fewer than ten staff.

This approach was based on the thinking that state involvement increases trust and recognition of eco-labels, while having many different labels may confuse consumers. On the supply side, more green products means more are likely to be bought, while distribution through smaller stores requires more consumer effort to get at them.


Demand-side control variables were included in the analysis, namely: per capita income, the pervasiveness of environmental values and the general level of trust of citizens in each other and in the public and private sectors.


Perhaps surprisingly, state involvement in labelling does not have a significant impact on the purchase of green products. Nor does it matter how many labelling schemes there are. But the more green products are on the market, the more are bought. And the more they are sold through large retailers, the more are bought. Large retailers tend to dominate in northern Europe; smaller stores and producer markets in southern and Eastern Europe.


The general level of trust among the population also had a strong influence on consumer behaviour. Sweden and Denmark, which record the highest levels of green product sales, operate their organic labels in very different ways but a very high level of general trust in both means consumers accept both public- and private-sector solutions.


Overall, governments can deliver the greatest added value by optimizing the supply of eco-labelled products. This should come on top of their work to develop markets through green public procurement, fund if not lead label development, and punish fraud.


Source: ETAP – Policy News


More information:


Varieties of environmental labelling, market structures, and sustainable consumption across Europe: A comparative analysis of organizational and market supply determinants of environmental-labelled goods’ (Journal of Consumer Policy, Vol. 34, No. 1): Download (pdf)


Eurobarometer 2007 survey


European Commission eco-label web pages


 

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