Written By Rachel Adams

VENTURES

written by RACHEL ADAMS

The Climate Conservancy’s carbon labeling on consumer products

Counting Carbs stanford scientific

“In a marketplace where products are labeled not only with price and nutrition facts, but also carbon emissions, consumer preference could drive the market to produce more energy efficient products.” - Steven Davis proposed “Carbon Labeling Act of 2008,” the first of its kind in the United States, calls for the labeling of all greenhouse gases emitted in the manufacture, distribution, and sale of all consumer goods in California. While a progressive initiative, labeling of products for their carbon impact has already begun for the Climate Conservancy, a non-profit corporation started by former and current Stanford graduate students. “When we started this organization in December 2006, the idea was relatively novel,” co-founder Steven Davis recalls. “Today, though, carbon labels seem inevitable, and the open questions are ones of methodology.”

Consumer Choice as a Market Force

Many people are searching for ways to lighten their “carbon footprint,” the impact that their activities and lifestyle have on the amount of greenhouse gases produced. While it may be obvious that taking the train from Palo Alto to San Francisco is more environmentally friendly than driving, the impact of other common daily choices may not be so clear. For example, when deciding which yogurt to purchase at the grocery store, what if you knew the production of one brand generated 40% less greenhouse gases than the production of another? The Climate Conservancy aims to increase consumer awareness of the carbon footprint of products they purchase by placing carbon labels on the products themselves. Their “Climate Conscious Assessment” documents the totality of greenhouse gases emitted during a product’s life – from the acquisition of raw materials (like farming the land or extracting the minerals) to the manufacture, packaging, distribution, consumption, and ultimate disposal of

the product. This product-level approach is appropriately known as a life-cycle assessment. “In a marketplace where products are labeled not only with price and nutrition facts, but also carbon emissions, consumer preference could drive the market to produce more energy efficient products by effectively creating a ‘backdoor’ carbon tax. Manufacturers will reduce emissions not to avoid a tax but to compete for the business of consumers,” explains Davis. Because participation by companies is completely voluntary, carbon labels on products can work as a non-political and non-regulatory market mechanism to lower greenhouse gas emissions. Companies that invest in the Climate Conservancy to label their products are ones that are most likely already investing in measures to improve efficiency, so the third-party Climate Conservancy label is a way for the company to make the consumer aware of their reduced carbon impact. “Armed with the right information,” concludes Davis, “consumers will vote with their dollars, and manufacturers will respond.” The Climate Conservancy believes that its status as a non-profit corporation is vital for its success. Unlike other companies that have recently entered this market, the Climate Conservancy neither sells nor considers carbon “offsets” as part of their life-cycle assessment. “Though we recognize the potential of offsets to sequester carbon and build renewable energy infrastructure,” says Davis, “we’ve chosen to focus on decreasing emissions or increasing efficiencies related to a product process.”

Credit Jamais Cascio, Open the Future (www.openthefuture.com)

Once again, California is on the forefront of climate change policy: the

A carbon label, like the nutrition label, could be the norm on packaged products in the grocery store in the next 10 years.

Manufacturers pay the Climate Conservancy solely for the cost of calculating the carbon footprint for a product, and this labor charge

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VENTURES

is The Climate Conservancy’s only source of income from their clients. By not profiting or losing from how a product sells, the Climate Conservancy maintains it objectivity when doing the calculations. Instead, the companies and consumers themselves are the driving force behind emission decreases.

What’s the Carbon Impact of your Favorite Beer?

New Belgium Brewing Company, in Fort Collins, Colorado, was one of the Climate Conservancy’s first customers. New Belgium, already known for their efforts to lighten their carbon footprint, asked the Climate Conservancy to rate the carbon impact of their best-known beer, Fat Tire Amber Ale. The Climate Conservancy, staffed by graduate and undergraduate researchers in various environmental and earth sciences, first had to determine the national average carbon cost for producing a 6-pack of beer. To do that, they used primary sources, such as the Department of Commerce’s information on energy and material requirements for the breweries sector. This information only considered the brewing process, however, and the Climate Conscious Assessment requires the carbon footprint of the entire life cycle of the beer. To get that, the Climate Conservancy drew from secondary sources on, for example, the carbon impact of the distribution, retail, and disposal of a 6-pack of beer. Once the national average was known, the Climate Conservancy then examined the supply chain and energy consumption by New Belgium Brewery for producing Fat Tire by contacting their suppliers and digging into their energy bills and purchase orders. Climate Conservancy ratings are relative, earning a product a Silver, Gold, or Platinum rating, similar to how the The Leadership in Energy and Environmental Design (LEED) rates the construction of “green buildings.” By emitting 35% less greenhouse gases than the average U.S. beer producer, New



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Belgium’s Fat Tire Amber Ale earned the title of Climate Conscious Silver. A further reduction of at least 6%, to 41% less than the national average, would have earned Fat Tire a Gold, and a sizeable reduction of an additional 36%, to 71% less than the national average, would have earned the beer a Platinum distinction. As it turns out, New Belgium is an environmentally conscientious company, using all wind-power and an innovative and highly efficient brewing process. However, the Climate Conservancy’s thorough assessment included elements out of New Belgium’s direct control, such as how the beer is sold in stores. The open-front, constantly running beverage refrigerators in supermarkets use a lot of energy – about half of the total carbon footprint for a 6-pack of beer. Because this energy consumption applies to all beers and the rating is relative, this part of the life cycle of the beer did not affect the rating on Fat Tire Amber Ale. Overall, the assessment allowed New Belgium to see the greenhouse gas emission from each of the separate steps of their supply chain. “Consumers are not the only ones interested in the greenhouse gases attributable to their activities,” says Davis. “By including the full life cycle, we encourage companies to consider the distribution, use, and disposal phases when designing, marketing and advocating their products.” In fact, New Belgium has asked the Climate Conservancy to research the reductions in greenhouse gases that would come from switching to organically farmed barley and hops.

The Beginning of an Ongoing Process Co-founder of the Climate Conservancy, Steven Davis, worked as a lawyer in Silicon Valley before starting a doctoral program in earth science and environmental geochemistry at Stanford in 2004. There, he met James Sweeney and Matthew Rothe, two other students interested in the power of the market place to drive reduction

“Today, carbon labels seem inevitable, and the open questions are ones of methodology.” -Steven Davis

According to Davis, “The entrepreneurial culture of the Bay Area is absolutely inspirational, and its ethic has lately fostered social and environmental groups like ours. Combine that spirit with the expertise on climate, energy, economics, and policy at Stanford, and you’ve got a recipe to change the world.” Detailed assessments of particular products are just one goal of the Climate Conservancy. More broadly, the Climate Conservancy is working to develop a model that would be capable of estimating the carbon footprints of all products in the grocery store. The model would produce an estimate of carbon emissions that could be placed on the pricing label of every item on the shelf in, say, your local Safeway. The model draws on economic, engineering, and scientific factors, and when considering every facet of the life cycle, from “cradle to grave,” a model can quickly become unwieldy. When asked about this, Davis asserted, “though its ability to distinguish between similar products will be limited in the beginning, the model will become more refined over time.” Carbon labeling is increasingly a topic of discussion for the international community dealing with climate change. Work is already underway in the United Kingdom to develop a standard for carbon labeling products, and the Climate Conservancy is acting as a reviewer of the process. Davis comments, “With the proliferation of green claims in the marketplace, it’s critical that carbon labels adhere to some standard methodology. Otherwise, we risk alienating consumers who are trying to make better choices.”

While the Climate Conservancy’s ultimate goal of reducing greenhouse gas emissions by empowering consumer choice is shared by many in the business and political communities, there is some debate on how widespread it should be. For some products, a carbon label may not be appropriate. For example, clothes and fresh produce both have a “seasonality” to them. It may not make sense to determine the carbon footprint for one article of clothing when the clothing manufacturer may not make that article the following year. Similarly, the energy consumption of fresh produce depends on, among other things, the time interval between when the product was harvested and when it was bought in the store, so the carbon label would have to change at certain intervals to take into consideration the extra energy use from longer storage. Considerations like these are still being debated by the climate change community. Nevertheless, The Climate Conservancy sees great potential for carbon labeling of most products at the local grocery store. Davis says, “Food and beverage purchases account for about 19% of an individual’s direct carbon, more than electricity used in the home and almost as much as the fuel burned while driving. Consumers know which light bulbs and cars are more efficient. We believe they should also know about their food.”

Credit The Climate Conservancy

in greenhouse gas emissions. Sweeney is a researcher in Stanford University’s Environmental Measurements Lab II, which measures climate change. Rothe, who grew up on a farm and formerly worked for Niman Ranch, Inc., earned his MBA from Stanford in 2007.

The Climate Conservancy aims to put labels like this one on consumer goods. If the greenhouse gas emissions generated for the production of a product is 71% less than the industry average, this Platinum label could appear on the product.

In 2006, the state of California passed an ambitious initiative to reduce greenhouse emissions, an initiative that drew from both government regulations and market forces. Carbon labeling by the Climate Conservancy may prove an instrumental part of meeting those goals.

Rachel Adams is a graduate student in the Ecology & Evolution group of the Biology Department. She enjoys investigating the connections between basic ecological research and environmental policy.

To Learn More

For more information, visit the Climate Conservancy’s website at www.climateconservancy.org

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