The Law and Economics of Eco-Labels

By late 2012, the Ecolabel Index had 432 eco-labels on record. In the first quarter of 2010, the same Index measured only 340. This reflects an increase in the interest in eco-labelling in the last couple of years. While it is unclear why this sudden interest in eco-labelling, it is true that markets for certified goods have become more visible and relevant in some sectors. For instance it has been reported that up to 20 percent of world exports of bananas are certified. Considering that in 2008 the total value of international banana trade was estimated at US$ 5.8 Billion per year, 20 percent is quite significant. Certified coffee represents 17 percent of global production. In the US alone the estimated value of the coffee market is of US$ 19 billion per year, which again makes certified coffee quite important. However, in other sectors such as forestry, fisheries, cocoa, cotton, and tea certification is relatively small. In the forestry sector, the Forest Stewardship Council (FSC) has certified the equivalent of 5% of the worlds productive forests, which is relatively small, but it is the equivalent of 125 million hectares of forest over 80 countries. Moreover the value of FSC labelled sales is estimated at over US$ 20 billion in 2008. Similarly, the Marine Stewardship Council (MSC) for certified sustainable seafood is estimated to have a value of US$ 1.5 Billion. MSC represents only 7% of the total global landings of marine fisheries (fish taken out of the water on to land), which is equivalent to 5.25 million tons of fish. These examples show that while the numbers seem relatively low, the absolute impact is still very relevant, because of the scale, the scope and their value.