The next generation of greenwash: diminishing consumer confusion through a national eco-labeling program.

• Author: Fliegelman, Jessica E.

Introduction I. Background Principles of Environmental Advertising A. The Rise of Green Consumerism and Greenwashing B. Deceptive Advertising: Applying the FTC Framework to Green Advertising C. Commercial Speech: First Amendment Challenges to Advertising Regulation 1. The Legal Precedent for Commercial Speech Regulations 2. Overcoming First Amendment Limitations D. The Current Framework for Environmental Advertising 1. Third Party Environmental Certification 2. FTC's Framework: The Green Guides a. History of the Green Guides b. The Green Guides' Requirements for Environmental Claims E. The EPA's Authority to Regulate Environmental Advertising F. Eco-Labeling Experience: Current United States and International Frameworks 1. The Organic Foods Product Act: Organic Products Labeling 2. International Success: Germany's Blue Angel Program 3. UK Carbon Trust: A Carbon Eco-Labeling Model G. The New Generation of Environmental Claims: Carbon Neutrality and Offsets 1. Current Review of the Green Guides 2. The New Terminology: Carbon Neutrality and Carbon Offsets 3.The Carbon Offset Market in the United States II. Proposals for Environmental Advertising Regulations A. Criticisms of the Green Guides 1. Non-Binding Regulations 2. Vagueness in the Guidelines 3. Federal Preemption of State Standards 4. Lack of Enforcement of the Green Guides 5. Outdated Terminology: The Need for Current Environmental Regulation B. Private Environmental Certifications C. The "Command and Control" Approach: A Purely Governmental Option D. A Joint Agency Framework III. Weighing the Costs and Benefits of Carbon Environmental Advertising Regulations A. Creating a Carbon Advertising Framework B. A Uniform Standard for Environmental Advertising C. A National Eco-Labeling Program: A Carbon Certification Seal Conclusion INTRODUCTION

Green is the new black. Greenpeace declared: "Climate change is in. Global warming is hip. Pop stars are urging action. It seems not a day passes without another big business making a green pronouncement." (1) In the 1990s, increasing public awareness of climate change prompted a consumer movement to address environmental concerns through selective product purchasing. (2) To capitalize on this consumer trend, manufacturers created a "green revolution," a marketing strategy touting the environmental attributes of a product. (3) The movement grew rapidly and continues to expand; since 2006, green advertising has nearly tripled. (4) The most current trend is to describe the carbon attributes of a product, coined a "tsunami" of green advertising, which reached a new peak with commercials for a "carbon-neutral Super Bowl" and "carbon-neutral Nascar races." (5) While manufacturers continue to advertise using traditional terminology, the focus has shifted to the carbon neutrality or sustainability of products.

Companies' product sales support the overall rising popularity of "green" products. In 2008 alone, consumers spent five hundred billion dollars on "green" products and services and the market is expected to continue expanding. (6) Major retailers, such as Target and Home Depot, still report strong sales in green goods despite the current economic climate and consumer polls indicate that consumers' commitment to buying environmentally-friendly products has not been altered by the economy. (7) For example, a survey found that sixty-eight percent of consumers would remain faithful to an environmentally-conscious brand and seven out of ten consumers would spend more for environmentally-friendly products even in a recession. (8) As green advertising has increased companies' profitability, rampant confusion has emerged among consumers about how to determine the truthfulness of environmental claims. (9)

Accurate advertising is critical for consumers trying to make product-purchasing decisions that have meaningful impacts on the environment. The largest contributors and populations most vulnerable to climate change are in urban locations. (10) More than fifty percent of the world's population lives in cities and emits two-thirds of the total energy use worldwide. (11) Coastal cities are particularly vulnerable to rising sea levels, storm surges, and flooding; heat trapping in urban landscapes with buildings and pavement creates threats of rising temperatures, increased levels of precipitation, and lower air quality. (12) Because of these threats, city governments have created climate action plans to lower energy consumption, promote sustainability, and create energy efficiency. (13) However, city governments face significant obstacles in affecting climate change because of the need for an effort involving not just governmental actors, but also a commitment from society to change. (14)

Individuals in urban communities, armed with the knowledge that they have both the greatest impact on climate change and the greatest opportunity to reduce its effects, can be motivated to make substantial changes in their personal lives. On an individual level, that dedication is particularly evidenced by their purchasing decisions. Thus, individual consumers must be assured that the products they purchase do, in fact, promote social change. Without the assurance of advertising accuracy, consumers could potentially distrust environmentally beneficial products and lose a powerful mechanism to positively impact climate change.

This Note will address the prominence of misleading and deceptive environmental claims that have prompted appeals for improved federal regulation. (15) Specifically, the Note will focus on the emerging trend of carbon advertising and national and international models that provide guidance on preventing deception. Part I will convey the current status of environmental advertising and the necessary background principles for establishing regulations. Part II will detail major criticisms of the current environmental advertising guidelines and proposed models for restructuring environmental advertising regulations. Finally, Part III will propose a voluntary national eco-labeling program that will address the current criticisms and improve consumer confidence in environmentally-beneficial product purchases.

1. BACKGROUND PRINCIPLES OF ENVIRONMENTAL ADVERTISING

   Part I conveys the historical, legal, and sociological framework for the current green marketing regulations. First, Part I will examine the sociological trend of increased demand from consumers for green products and the corresponding rise in deceptive environmental advertising practices. (16) Part I will next address the governmental authority exercised by the Federal Trade Commission (FTC) to regulate deceptive advertising in general and discuss how advertising regulations can overcome First Amendment challenges. The current usage of environmental and energy advertising has been monitored through third-party product certifications and the FTC's voluntary guidelines on environmental labeling. Despite the FTC's authority in this area, one significant aspect of the debate is over which agency should ultimately be responsible for environmental labeling regulations. Part I thus examines whether the Environmental Protection Agency (EPA) has either express or implied authority to implement environmental advertising regulations, specifically a national eco-labeling program. Part I provides both national and international examples of labeling programs that have created effective regulatory frameworks to look to for guidance in modifying the current state of environmental labeling regulations. Finally, Part I will discuss the newly-emerging issues surrounding environmental advertising, specifically the increasing presence of carbon terminology, and how any regulatory changes should take into account the new technology and terminology to promote effective, accurate product labeling and ultimately increase consumer protection.

   1. The Rise of Green Consumerism and Greenwashing

      The general public's increasing awareness of climate change created the purchasing phenomenon known as "green consumerism," in which environmentally-conscious shoppers purchase products that seemingly pose less of an environmental threat. (17) A study conducted in 2009 by WPP Green Brands (18) found that thirty-seven percent of consumers factored the environmental attributes of a product into their purchasing decisions, and seventy-seven percent of consumers considered a company's "environmentally-friendly" reputation to be significant. (19) As a result, green advertising has the potential to produce environmental benefits through greater consumer awareness because it can aid consumers in making meaningful marketplace choices. (20)

      The ubiquity of green advertising claims generally increases consumer confidence that the claims have been substantiated, such that an individual consumer believes he need not worry about conducting independent research to verify the accuracy of green advertising claims. (21) However, with respect to green advertising, the overwhelming presence of advertisements touting environmental benefits has failed to indicate to consumers that the claims are accurate. (22) Many companies, more concerned with profitability than ensuring that products meet specific standards, will "exaggerate or even fabricate the environmental qualities of their goods, letting their advertising rhetoric far outstrip their environmental contributions." (23) These companies "often change their labels but little else." (24) Advertisements also frequently employ vague, undefined terms like "eco-friendly" or "green," which colloquially imply an environmental benefit, but when used in product labeling, "despite their ambiguity ... imply that they are based upon objective scientific investigation." (25) Yet, there is "no absolute measure of earth-friendliness." (26) These claims are simply value judgments about the overall impact of the product. (27) Thus, one of the major critiques of corporate green...