Policy instruments for mobilising consumption for sustainability

Using eco-labelling and public procurement Background, mechanisms, procedures, evaluations, impacts and barriers

2

Today’s program

• Summary of institutional set-up• Integrated Product Policy• Eco-labels• Public Procurement• Exercises here (in between)

3

What has the EU

achieved?

•European reconstruction

•60 years of peace and

stability

•Economic growth

•Democratisation

Despite this the Union is perceived (by many) as being:

•Disconnected

•Bureaucratic

•Wasteful

•Corrupt

•“A plot”

4

Institutional (Dorte Kardel)

European Commission initiates policy

European Council is the supreme decision-making body

European Parliament shares legislative authority on

certain issues

European Court of Justice interprets and applies EU law

5

Formal decision making (Dorte Kardel)

Choices for the Commission•Regulations•Directives•Green Papers•White Papers•Decisions

Roles for the European Parliament•Co-decision•Consultation•Assent•Co-operation

6

And finally... The Voting in the Council of Ministers

Qualified Majority Voting in most environmental

decisions (Actually triple qualifyed majority: votes,

countries, citizens)

Unanimity about energy policy (so far)

7

But how does the European Union REALLY work?

• Driven by personalities• Resulting from compromises • Powerful lobby groups • Institutional self-interest• Expert-driven • National Self-interest (reflected in voting results)• A product of external shocks (dismissal of commissions and

treaties)• EU Presidency matters (Agendas like Clean, Clever and

Competitive NL)

(Partly from Cameron 2006)

8

Two Claims about European environmental policy

1. Some of the most progressive environmental policies of any “state” in the world

2. Leading to higher standards across the European Union and outside

9

1. “Leader-States” pushing for high standards to protect their economic competitiveness

2. Sharing of political and economic costs with other member states3. “Brick by brick” construction of Europe4. Role of the Parliament5. Going above the national and straight to Europe

=built-in internal dynamics as well as responses to external international agreements

Drivers for ambitious policy level

10

Returning to the claims

1. Some of the most progressive environmental policies of any “state” in the world• Yes, but implementation and governance deficits

seriously undermine the impact of policy

2. Leading to higher standards across the Union• Yes, higher standards do prevail but these standards are

not properly enforced and so they are rarely enough to keep pace with the environmental threats

11

The deficits are failures to:

• Transpose • Implement• Comply • Enforce • Communicate • Tackle behaviour• Build capacity • Deal with subsidiarity• Choose the right instrument (al though some powerful tools are

out of reach)• Provide access to third parties

• Lack of control of ressources for implementation!

12

Integrated Product Policy defined

• ”Public policy which explicitly aims to modify and improve the environmental performance of products” (SPRU ’98)

• ”IPP is not attempting to reduce consumption; rather it is seeking to to reduce the environmental impact of increased consumption”

Press release 2003

Alternative: • IPP is oriented towards products and

services and their environmental features during the whole life-cycle; it aims at the improvement of their environmental performance and promotes innovations in products and services

(Rubik 2006)Question to you: what is the difference?

“nothing but an empty box”, “yet another layer of administration”

Referenced by Kögler in minutes from IPP meeting March 2005

13

Environmental regulation in industrialized countries

Traditionalfocus

Future IPP focus?

Raw materialextraction

Materialproduction

Product manufacturing

Use Disposal

Raw materialextraction

Materialproduction

Product manufacturing

Use Disposal

Wenzel et al. 1997

14

Integrated Product Policy (IPP)

+

Traditionalpublic policy

Additions from Integrated Product Policy

Expanded public policy

Products and services

Diffuse and unknown source locationVoluntary market-based regulation

Central authorities as catalysts for new complex ad-hoc institutions

Internationally regulated frameworksOpen consensus-based regulation

Dynamic requirements and changing objectivesResource consumption and impacts of flows

Global impactsLife cycle thinking

· Industrial processes

· Physically delimited sites· Command-and-control

· Decentralised authorities

· National regulation· Two negotiating parties

· Stable requirements· Emmisions

· Local impacts· Controlling sites

+

++

++++++

Riisgaard, 2006

15

The IPP toolbox• State aid• Voluntary agreements• Standardization• Environmental management systems• Eco-design• Labelling

• Eco-labels• Energy labelling

• Greening Public Procurement• Green Technology

• ETAP• Performance targets

• Legislation• Waste legislation• Chemicals

Core elements of the EU flower• It has a European dimension• It is selective • It is transparent!• It works with a multicriteria approach• It is voluntary

Type I - main target audience: consumers (public and private) - and product designers and manufacturers”LCA-based”, positive, external control

Type II "claims"Single attribute (ex: recycled paper content), positive, self controlled

Type III "declarations” - main audience: business communication

LCA-based, neutral, verification?

17

Servicesgoods

Criteria - many variations

• General demands including "fitness for use" (e.g. colour fastness of textiles)

• ”Hurdles” - threshold values:• contents, emissions, consumption

• Negative - or positive lists (blacklisting/whitelisting)

• Point systems

19

Household Appliances: Energy-labels are also effective in Denmark

A- and B labelled fridges have

gained a market share of

96 per cent (2002) in only eight years

The diagram shows the ”A”

and ”B” labelled share of the total sales.

Sources: Danish Energy Agency and Dansk Hvidevare nyt 1:2003 (FEHA)

A labeledB labeledOther labels

20

Eco-labels: testing your knowledge Label Eco-label? Based on life-

cycle approachControlled by third party?

21

European Eco-labeling- a Praised Link Between

Consumption and Production,and so far a Policy Tool that have Failed

...but...

1. The praised link called EU flower was a failure2. There are no valid evaluations of the current scheme3. To be effective, connect the label to

-other aspects of the products (savings, health, social issues)-other policy tools -other important institutional players

(But do not expect miracles!)

The 3 points to take with you

22

The Background

• EC regulation 880/92• 5th Environmental Action Program • “Towards Sustainable Development”• Voluntary• Based on life cycle perspective• Slow and delayed criteria development• After 3 years: only 1 labelled product on

the market

Product

ProductionProcess

EnvironmentalAudit

EcologicalLabel

Company ImageMarket ShareLiability Rating

FIGURE 2b: The Potential of Consumer Power to Promote Ecologically-Sound ManufacturingProcesses and Products

Inventory of emissions,dischargesand wastes

Public Listing of“clean” / “dirty”Companies

Rede

sign

Refo

rmul

atio

n

EU’s 5th Environmental Action Plan 1992-1999 “Towards Sustainable Development”

Consumer Awarenessand Choice

24

Situation todayNew regulation 1980/2000:

• services included

• new organisation: European Union Eco-labelling Board (EUEB)

• fee reductions (for SMEs, developing countries, EMAS, ice-breakers)

• transparency

• new work plan (on time)

Promotional campaign “flower weeks” Autumn 2004, 2006 and 2008

New revision end 2004“Informal Draft non-paper …”

23 product groups

25

0 50 100 150 200 250 300

1998

1999

2000

2001

2002

2003

2004 (13/ 10/05)

2005 (13/ 10/2005)

Number of companies awarded the EU Eco-label

(data provided by Eco help-Desk 2005)

26

Ex-factory sales value (€ million) of EU Eco-labelled products/item

0 100 200 300 400 500 600 700 800 900

1998

1999

2000

2001

2002

2003

2004 (13/10/05)

2005 (13/10/2005)

(data provided by Eco help-Desk 2005)

27

(Eco-help desk final report 2005)

28

Methodology

• Literature study

• Document analysis

• Interviews with 7 high level experts involved in the

European Union Eco-labelling board

• Interviews with nearly all Danish eco-label license

holders in the two service categories ’camping’ (4) and

’tourist accommodation’(5)

• Interview with the main ”broker”

• (Traineeship at Eco-labelling Denmark)

29

Evaluating the mechanism of eco-labelling

1Eco-

labelling scheme

3Criteria

develop-ment

2Product Group

Selection

4Producer

appli-cation

5Label

Awarding

6Availability

on the market

7Consumer

Know-ledge

8Consumer

Percep-tion

9Consumer

Trust

10 Consump-

tion pattern

12Product

and service innovations

14Indirect impacts

13 trade impacts

11 Environ-mental impacts

15Promotion and marketing

Criteria revision

30

Evaluation of policy: 2 options

Comparing with original targets (looking back)

Looking at impacts (direct as well as indirect), new challenges, opportunities and improvement potentials (looking forward)

31

Eco-label evaluationsPromotion

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15OECD 1997 ≤1996 XX XX XX XX XX X X XX XX XEPA 1998 ≤1998 XX XX XX X X X X X X X X XX XThøgersen 2000 1999 X XX XX XX XXBjorner 2001 1997-2001 X XX XXGallaraga 2002 ≤1999 X X X X X XX XWilliams 2004 XX X X X XPedersen and Neergaard 2005 ≤2002 X X X XX X XXRubik and Frankl (eds.) 2005 ≤2002 XX X X X X X X XLeire and Thidell 2005 ≤2004 X X X X XEEB 2004 ≤2003 X XX XX X X XX X X X X XX X XXAEAT 2004 ≤2004 X XX X XXKvistgaard 2005 ≤2004 X XX XX XXBEUC 2004 ≤2004 X XX X XX XXEVER 2005 ≤2005 X X XX XX XX X X X X XX XX XX XX X

Supply side focus Demand side focus ImpactsData collection

Authors

X indicates a coverage mainly based on secondary sourcesXX indicates new additional empirical evidence

32

Conclusions IMost evaluations are critical regarding the EU flower

• But most evaluations are concerning the old scheme

• And no evaluations cover the whole eco-labelling scheme

33

Conclusion II get connectedConnect to other aspects of the products

• savings• health• sustainability

Connect eco-label criteria with other policy tools:• Public procurement • EMAS• Energy efficiency (energy labelling) • Environmental Product Declarations• Draft directive on Energy Using Products

Connect to other institutional players (product panels, certifying bodies, retailers)

And do not expect miracles! (maximum 0.1 per cent of promotional expenditures)

34

Exploiting the domino effects of eco-labelling Product and

service ’innovations Changes in

environ-mental

SchemeEco-labellingschemeset-up

Productgroup

selection

Criteriadevelop-

ment

Producerappli-

cation

Labelawarding

Availabilityon the

market

Consumer know-ledge

Consumerpercep-

tion

Consumertrust

Consump-tion

patternimpacts of

products & services International

trade distortions

Indirect impacts

...

Brokers

Marketing

35

”Governance” during EU eco-labelling: EUEB

COMPOSITION4. The EUEB shall consist of the competent bodies referred to in

Article 14 of Regulation (EC)No 1980/2000, including the competent bodies of the Member States of the European Economic Area, and the Consultation Forum referred to in Article 15 of the said Regulation.

5. Amongst others, the following organisations, representing the interested parties, shall be members of the EUEB:

— Coface (consumers, representing also BEUC, Eurocoop and AEC),— EEB (environmental)— ETUC (trade unions),— UNICE (industry),— UEAPME (SMEs, crafts),— Eurocommerce (commerce)In order to ensure a balanced participation of all relevant interested

parties, the EUEB may adapt this membership as appropriate…COMMISSION DECISION of 10 November 2000 establishing the European Union Eco-labelling Board and its rules of procedure Annex

36

Governance and private influence on consumption tools (eco-labelling and public procurement)

Product-oriented environmental polcy

Eco-label scheme set-up

Product groupSelection

European Union Eco-

labelling Board

Ad-hoc Working Group

European Commission Inter-service consultation

Consultants

Retailers

Producers

Regulatory Committee

voting

Official Journal Publication

Producer application/

Label awarding

Availability of labelled products

Marketing and promotion of eco-labelling

Procurement guidelines

scheme set-up

Product groupSelection

Steering group draft proposal

+market survey

Hearing among specific stakeholders

Steering group approval

Product specific

guidelines on the internet

Promotion of green public procurement

and guidelines

EU flower

IntegratedProduct policy

37

Connections between Environmental Management and flower-labelled services in tourism

8 out 9 licensees have been involved in a previous project focussed on greening the industry => good link between management and label focus.

They would not have reached for the label had it not been for the broker!

The criteria sets form targets for environmental management (also for those who intend to leave the scheme)

Some criticism of the heavy control and irritating criteria

Licensees apply the criteria that they fulfill from the outset (context dependent)

38

Recommendation: keep it flexible and management oriented

Nordic swan criteriaGreen Key criteria

EU Flowermandatory criteria

Label yManagement system x

EU flower optional criteria

39

Why green public procurement

• To lower the impact

• Stimulate (eco)-innovation

• ”Walk the talk”

40

Green Public Procurement defined

"Green" public procurement stands for public purchase that take into account environmental elements when buying products, services or works.   

41

The ’Energy Star’ case

April 1993: the Clinton AnnouncementContext: The US Federal Government

was World’s largest purchasing power in computers (7 %)

Result: Philips: ”No serious manufacturer can afford neclecting energy star demands”

42

EU activities to promote GPP

No directives!

Political support and exchange of information => in framework of IPP, ETAP, Advisory Committee on public procurement

Awareness-raising and training

• Launch event of handbook October 2004• Awareness raising for new Member States

September 2005

Handbook on GPP in all EU languages!

Environmental database

Leaflet and guidelines on use of eco-label criteria in GPP

43

Reported obstacles

• Legal uncertainty

• Lack of environmental knowledge

• Lack of political support

• Budgetary constraints

44

Green Public Procurement and eco-labels

Underlying technical specifications can be used in tender documents

Eco-label can be recognised as a (non-exclusive) proof of compliance with technical specifications

http://europa.eu.int/comm/environment/ecolabel/index_en.htm

Question to you: why not demand eco-labelled products?

Thank you

45

Response rates by country

46

Key Organisational aspects

Central purchasing organisations are consistently more ‘green’ than decentralized organisations

• Question to you: should procurement then be

centralised?

EMS (Environmental Management System)• 33% of the Green-7 public bodies have one• 13% from Other-18

47

References and links

Links: EU homepage on Greening of public procurement:http://europa.eu.int/comm/environment/gpp/index.htmEU homepage of eco-labelling catalogue: http://www.eco-label.com/http://www.ecolabel.dk/

Frieder Rubik and Paolo Frankl (eds.) : The Future of Eco-labellingMaking Environmental Product Information Systems Effective, Greenleaf Publishing May 2005

REGULATION (EC) No 1980/2000 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILof 17 July 2000 on a revised Community eco-label award schemehttp://europa.eu.int/comm/environment/ecolabel/pdf/regulation/001980_en.pdf

Andrew Jordan (ed.), Environmental Policy in the European Union: Actors, Institutions and Processes, Earthscan 2002.

Notes and slides from Edward Cameron: “The Governance Dividend – Improving Environmental Policy in the European Union” Åbo Akademi www.cameronsds.com

Check the IPP Q/A list of the European commission: http://europa.eu.int/rapid/pressReleasesAction.do?reference=MEMO/03/136&format=HTML&aged=0&language=EN&guiLanguage=en