The Economics of Ecolabelling - SEAFOOD Ecolabelling: Principles and Practice - page 38

Chapter 2
The Economics of Ecolabelling

Cathy A. Roheim

2.1 Introduction

Environmental labelling makes relevant environmental information available to
appropriate consumers (US EPA 1993, 1998). Ecolabelling, which is a stringent
form of environmental labelling, relies on independent third-party verification that
the products meet certain environmental criteria or standards (US EPA 1998). Once
the product meets those criteria or standards, a 'seal-of-approval', or an ecolabel,
may be affixed to the product.
The potential usefulness of ecolabelling schemes to create market-based in-
centives for environmentally friendly products and production processes for all
products, food and otherwise, was internationally recognised at the United Nations
Conference on Environment and Development held in Rio de Janeiro, Brazil, in
1992 (UN 1993). At Rio, governments agreed to 'encourage expansion of envi-
ronmental labelling and other environmentally-related product information pro-
grammes designed to assist consumers to make informed choices'. (paragraph 4 of
Agenda 21). Moreover, consumer organisations in many countries, and some inter-
national consumer unions, argue that consumers have a right to obtain information
about marketed products that is relevant to their values and preferences, especially
information pertaining to product safety or impacts on health or the environment.
Such labelling has many potential societal benefits, including environmental im-
provement, accurate information dissemination to consumers and increased aware-
ness of, and interest by, the public about environmental issues (Morris & Scarlett
1996, Kuhre 1997). As consumers grow increasingly aware of environmental issues
and the role their purchases may play in environmental degradation, market shares
of products with some form of environmental labelling may grow at the expense
of products without environmental labelling. It is hypothesised that this may be
true even if the labelled product is relatively more expensive, because informed
consumers may be willing to pay more for the product they feel has the least im-
pact on the environment, thus creating a market-based incentive for the increased
production of such goods.
Ecolabelling is a growing concept in the promotion of sustainable seafood around
the world. The notion has created significant attention in seafood markets since the

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