Standards and Labelling - International Institute for Sustainable ...

Topic:
Standards
and
Labelling
Overview
Standards
and
technical
regulations
provide
a
vehicle
for
promoting
energy
efficiency,
as
well
as
credible
solutions
for
monitoring,
measuring,
verifying
and
reporting
greenhouse
gas
emissions
and
their
trading.
While
energy
efficiency
standards
are
widespread
around
the
world,
there
are
great
variations
in
the
technical
specifications,
the
testing
procedures
and
modalities
of
enforcement
across
countries.
Consumer
information
that
can
influence
purchasing
decisions
is
an
essential
component
of
market
transformation.
Energy‐information
labels
are
required
by
all
OECD
and
EU
member
countries,
and
by
a
growing
number
of
non‐OECD
countries.
In
addition,
voluntary
seal‐of‐approval
labels
can
be
selectively
awarded
for
products
that
meet
strict
environmental
requirements
In
addition
to
schemes
that
look
at
energy,
labelling
schemes
that
address
carbon
efficiency
by
looking
at
the
full
life
cycle
of
traded
goods
are
at
an
early
phase
of
development.
The
role
of
carbon
labelling
schemes
is
likely
to
grow
in
the
future,
providing
consumers
with
the
option
of
decreasing
their
personal
carbon
footprints.
These
schemes
provide
positive
product
differentiation
and
market
opportunities.
Standards
and
labels
focusing
on
carbon
content
deal
directly
with
the
controversial
issue
of
process
and
production
methods
(PPMs).
Although
there
seems
to
be
a
growing
acceptance
of
the
use
of
PPMs
for
specific
and
defined
purposes—such
as
protecting
exhaustible
natural
resources,
and
human
health
and
safety—there
is
also
concern
among
developing
countries
in
particular
that
they
be
abused
for
protectionist
purposes.
Developing
countries
would
like
to
keep
“non‐product
related”
PPMs
in
particular
out
of
the
WTO,
that
is
to
say,
cases
in
which
there
is
no
way
to
distinguish
how
a
final
product
was
produced
based
on
the
characteristics
of
the
final
product.
For
example,
it
is
not
possible
to
tell
when
examining
a
computer
whether
it
was
produced
in
a
factory
powered
by
wind,
hydro
or
coal
power.
From
a
trade
policy
perspective,
standards
and
labels
as
such
represent
non‐tariff
measures
and
are
potential
obstacles
to
market
entry.
Many
producers
are
concerned
that
labelling
and
standards
may
become
barriers
to
market
access.
They
see
the
rise
in
such
non‐tariff
barriers
as
potential
obstacles
to
market
entry
and
a
vehicle
for
green
protectionism.
The
WTO
establishes
a
number
of
conditions
that
will
be
relevant
to
national
and
regional
efforts
to
promote
energy
efficiency.
In
addition,
WTO
rules
require
standards
and
technical
regulations
to
be
based
on
international
standards
where
they
exist.

Related
WTO
agreements
GATT
WTO
Agreement
on
Technical
Barriers
to
Trade
WTO
Agreement
on
Sanitary
and
Phytosanitary
Standards

Further
reading
Appleton,
A.
(1997).
Environmental
labelling
programmes:
Trade
law
implications.
London:
Kluwer
Law
International.
Bernasconi‐Osterwalder,
N.,
Magraw,
D.,
Oliva,
M.J.,
Orellana,
M.
and
Tuerk,
E.
(2005).
Environment
and
trade:
A
guide
to
WTO
jurisprudence.
London:
Center
for
International
Environmental
Law
(CIEL)
and
Earthscan
www.ciel.org/Publications/Environment_and_Trade2006.pdf.
Charnovitz,
S.
(2002).
The
law
of
environmental
PPMs
in
the
World
Trade
Organization:
Debunking
the
myth
of
illegality.
Yale
Journal
of
International
Law,
27(1):
59–110.
CLASP.
(2007).
Standards
and
labeling
guidebook.
Washington,
D.C.:
Collaborative
Labeling
and
Appliance
Standards
Program.
Gaines,
S.E.
2(002).
Processes
and
production
methods:
How
to
produce
sound
policy
for
environmental
PPM‐based
trade
measures?
Columbia
Journal
of
Environmental
Law,
27(2):
383–432.
Howse,
R.
and
Regan,
D.
(2000).
The
product/process
distinction:
An
illusory
basis
for
disciplining
‘unilateralism’
in
trade
policy.
European
Journal
of
International
Law,
11(2):
249–290.
Howse,
R.,
van
Bork,
P.
and
Hebebrand,
C.
(2006).
WTO
disciplines
and
biofuels:
Opportunities
and
constraints
in
the
creation
of
a
global
marketplace.
Washington
D.C.:
International
Food
&
Agriculture
Trade
Policy
Council.
www.agritrade.org/Publications/DiscussionPapers/WTO_Disciplines_Biofuels.pdf.
International
Energy
Agency
(IEA).
(2003).
Cool
appliances:
Policy
strategies
for
energyefficient
homes.
Paris:
IEA.
IEA.
(2006).
Light’s
labour’s
lost:
Policies
for
energy‐efficient
lighting.
Paris:
IEA.
IEA.
(2007a).
Mind
the
gap:
Quantifying
principal‐agent
programs
in
energy
efficiency.
Paris:
IEA.
IEA.
(2007b).
Experience
with
energy
efficiency
regulations
for
electrical
equipment.
Information
Paper.
Paris:
IEA.
Organisation
for
Economic
Co‐operation
and
Development
(OECD).
(1997).
Processes
and
production
methods
(PPMs):
Conceptual
framework
and
considerations
on
use
of
PPMbased
trade
measures.
OCDE/GD(97)137.
Paris:
OECD.

Potts,
J.
(2008).
The
legality
of
PPMs
under
the
GATT:
Challenges
and
opportunities
for
sustainable
trade
policy.
Winnipeg:
International
Institute
for
Sustainable
Development.
www.iisd.org/pdf/2008/ppms_gatt.pdf.
Waide,
P.
(2008).
Market
transformation
initiatives
from
around
the
world.
Presented
at
the
ACEEE
Market
Transformation
Symposium,
March
30–April
1,
2008.
Washington,
D.C.

Sub‐topic:
Standards
and
labelling
–
Energy
standards
and
labels
Overview
Climate
change
policy
aims
to
set
countries
onto
a
path
towards
an
efficient,
low‐carbon
energy
future.
According
to
the
World
Energy
Outlook
and
other
studies,
energy
efficiency
improvements
provide
one
of
the
most
cost‐effective
ways
to
reduce
energy
bills
and
greenhouse
gas
emissions,
lower
the
cost
of
energy
services
and
diminish
energy
import
dependence.
This
potential
is
particularly
important
for
developing
countries
with
high
energy‐import
bills.
Standards
and
labelling
are
some
of
the
most
important
tools
to
increase
efficiency,
and
WTO
rules
set
out
the
parameters
for
standards
and
labelling.
For
the
time
being,
energy
efficient
end‐use
technologies
are
still
relatively
underutilized
because
of
numerous
market
barriers.
Governments
are
increasingly
recognizing
the
need
to
overcome
these
barriers
through
direct
policy
measures.
The
most
widely
deployed
policies
are
mandatory
minimum
energy
performance
standards
(MEPS)
and
energy
labelling,
both
of
which
have
been
highly
effective
in
improving
equipment
energy
performance.
As
the
large
majority
of
energy‐using
equipment
is
traded
internationally,
these
policies
have
implications
for
the
nature
and
cost
of
international
trade.
Different
regional
and
national
standards
for
testing
and
conformity
assessment
procedures,
as
well
as
import
tariff
regimes,
add
to
the
cost
of
trading
energy‐efficient
products.
Testing
and
conformity
assessment
procedures
are
complex
and
reflect
both
historic
and
user
difference
across
nations.
Any
multilateral
decision
to
develop
internationallyagreed
criteria
for
relatively
energy‐efficient
goods,
based
on
comparable
test
procedures,
would
need
to
be
justified
by
the
expectation
that
the
net
benefits
of
increased
trade
in
goods
outweigh
the
inconvenience
of
harmonization.
Future
energy
standards
and
labelling
schemes
would
need
to
balance
the
need
for
accurate
and
useful
data
with
the
need
to
be
simple,
transparent,
and
involve
sufficiently
low
transaction
costs
to
include
small
countries
and
players.

Key
issues
The
development
and
dissemination
of
new
and
efficient
energy
technologies
provides
one
important
element
in
the
levelling
off
of
the
current
energy
growth
trends,
contributing
to
the
reduction
of
emissions
from
energy
use.
Standards
and
technical
regulations
provide
a
vehicle
for
promoting
energy
efficiency.
According
to
the
International
Energy
Agency,
accelerated
energy
efficiency
improvement
is
credited
with
78
per
cent
of
the
emissions
reduction
savings
potential
by
2030,
making
it
critical
for
a
future
climate
regime
to
harness
that
potential.
Trade
in
energy‐efficient
products
Given
that
the
vast
majority
of
energy‐using
equipment
and
consumer
products
are
traded
globally,
an
important
question
is
how
markets
can
be
made
to
work
better
for
the
scaling
up
of
energy
efficiency.
A
global
trade‐led
market
transformation
effort
would
require
expanding
markets
for
more
advanced
technologies,
while
eliminating
outdated
equipment.
Mandatory
minimum
energy
performance
standards
(MEPS)
aim
to
push
up
the
efficiency
level
of
new
products
entering
the
market.
Governments
can
take
these
a
step
further
by
phasing
out
older
technologies
and
products
that
use
more
energy
and
produce
more
greenhouse
gas
emissions.
Examples
include
replacing
incandescent
light
bulbs
with
more
energy‐efficient
compact
fluorescent
lamps,
which
use
only
about
20
per
cent
of
the
power
to
produce
the
same
amount
of
light
and
last
longer.
Energy
information
labels
can
help
consumers
made
climate‐friendly
purchasing
decisions.
Energy
performance
standards
Several
countries
have
taken
steps
aimed
at
directing
energy‐performance
standards
for
a
range
of
consumer
appliances.
Mandatory
minimum
energy‐performance
standards
(MEPS)
have
been
introduced
in
most
OECD
countries,
but
also
in
many
developing
countries.
In
2006,
57
countries
representing
80
per
cent
of
the
world’s
population
had
energy‐efficiency
standards
and
labelling
programs
in
place.
Minimum
energy‐performance
requirements
have
taken
various
forms
in
different
countries,
with
MEPS
often
coupled
with
more
stringent
standards
or
by
more
restrictive,
voluntary
agreements
between
government
and
industry.
Labelling
Consumer
information
that
can
influence
purchasing
decisions
is
an
essential
component
of
market
transformation.
Most
countries
that
regulate
MEPS
also
require
energyinformation
labels
to
be
displayed
on
the
same
products.
Energy‐information
labels
are
required
by
all
OECD
and
EU
member
countries,
and
by
a
growing
number
of
non‐OECD
countries.

The
main
piece
of
information
provided
by
a
mandatory
energy‐information
label
is
the
appliance’s
estimated
energy
consumption
in
kWh/year,
or
per
operating
cycle
derived
from
standard
tests.
The
label
typically
shows
the
product
group
type
and
size
category
within
which
the
model
should
be
compared,
as
well
as
the
energy
consumption
of
the
most
and
least
energy
efficient
models
within
the
product
group
for
comparison.
Increasingly
popular
are
the
use
of
visual
aids,
such
as
the
EU’s
colour‐coded
performance
scale
from
G
(lowest
efficiency)
to
A
(Highest
efficiency),
to
increase
quick
comparison
between
different
appliances
and
to
identify
the
most
efficient
models.
In
addition,
voluntary
seal‐of‐approval
labels
can
be
selectively
awarded
for
products
that
meet
strict
environmental
requirements.
Ecological
or
environmental
labelling
schemes
(“eco‐labels”)
often
augment
energy‐efficiency
criteria
with
other
product
performance
criteria,
such
as
for
noise,
water
use
or
product
durability,
specifications
relating
to
the
composition
of
the
product
or
the
product’s
re‐use,
recycling
and
disposal
characteristics.
Harmonizing
standards
and
labels
internationally
While
energy‐efficiency
standards
are
widespread
around
the
world,
there
are
great
variations
in
the
technical
specifications,
the
testing
procedures
and
modalities
of
enforcement
across
countries.
Such
differences
are
recognized
in
the
climate
Convention,
which
notes
in
its
preamble
that
"
environmental
standards
[…]
should
reflect
the
environmental
and
developmental
context
to
which
they
apply,
and
that
standards
applied
by
some
countries
may
be
inappropriate
and
of
unwarranted
economic
and
social
cost
to
other
countries,
in
particular
developing
countries."
An
effort
towards
harmonization
of
energy
efficiency
standards
would
generate
greater
coherence
at
the
international
level.
Whether
that
can
be
achieved
under
the
UNFCCC
umbrella
or
through
other
forums,
such
as
the
International
Standards
Organisation
(ISO),
requires
further
consideration.
Overall,
views
diverge
on
the
desirability
and
need
for
harmonization
of
energy
standards
at
the
international
level.
Some
argue
that
this
is
a
sphere
for
“regulatory
competition”
where
consumers
play
an
arbitration
function.
Others
point
out
that
in
aligning
processes
for
setting
and
testing
standards,
policymakers
should
take
care
not
to
threaten
legitimate
functional
distinctions
and
the
integrity
of
standards
and
labelling
schemes.
Standards
and
labels
as
non‐tariff
barriers
From
a
trade
policy
perspective,
standards
and
labels
represent
non‐tariff
measures
and,
as
such,
are
potential
obstacles
to
market
entry.
Different
efficiency
standards
and
labels,
as
well
as
test
procedures,
are
reported
to
be
the
most
frequent
concern
of
the
WTO
under
the
Agreement
on
Technical
Barriers
to
Trade.
WTO
rules,
through
disciplines
on
areas
such
as
subsidies,
border
measures
and
technical
requirements,

therefore
have
implications
for
the
options
available
to
countries
in
implementing
climate
measures
and
promoting
the
use
of
energy‐efficient
products.
However,
standards
and
labelling
schemes
also
provide
opportunities
for
positive
product
differentiation
and
market
opportunities.
In
general,
WTO
rules
require
standards
and
technical
regulations
to
be
based
on
international
standards
where
they
exist.

Sub‐topic:
Standards
and
labelling
–
Carbon
labels
Overview
The
carbon
embedded
in
internationally
traded
goods—its
measurement,
as
well
as
different
ways
of
communicating
the
climate
impact—is
a
rapidly
emerging
factor
expected
to
significantly
influence
consumer
behaviour
in
major
markets
across
the
globe.
Changing
consumption
patterns
will
be
important
within
the
wide
spectrum
of
measures
needed
to
address
climate
change.
New,
mainly
private‐sector
driven
carbon
labelling
schemes
raise
a
number
of
issues,
however.
They
will
affect
a
wide
range
of
stakeholders,
including
producers
and
consumers,
the
public
and
private
sector,
and
developing
and
developed
countries,
along
all
levels
of
globally‐distributed
value
chains.
So
far,
public
scrutiny
and
debate
around
carbon
labelling
has
been
limited.
While
the
intergovernmental
processes
under
the
UNFCCC
and
the
Doha
Round
are
advancing
at
a
slow
pace,
carbon
labelling
schemes
as
well
as
initiatives
to
measure
carbon
and
address
carbon
hotspots
within
the
value
chains
of
globally
traded
goods,
both
agricultural
and
industrial,
are
moving
ahead.
The
measurement
of
the
carbon
embedded
within
individual
products
is
rapidly
becoming
more
sophisticated—and
is
certainly
costly.
Early
experiments,
which
largely
singled
out
the
“carbon
hotspot”
airfreighting
of
fresh
fruits
and
flowers
entailed
and
communicated
this
through
airplane
stickers,
have
been
largely
discredited.
Newer
initiatives
seek
to
understand
the
full
lifecycle
of
any
given
good.
However,
drawing
the
boundaries
for
such
lifecycle
analysis
becomes
close
to
impossible.
And
yet,
simplifications
must
be
made
to
render
any
scheme
workable,
and
costs
bearable—especially
for
smaller
producers.
For
developing
country
players
to
be
able
to
participate
in
the
schemes,
technical
assistance
and
support
targeting
smaller
producers
in
particular
would
be
needed.
Transparency
is
important
to
allay
fears
that
the
schemes
are
just
the
newest
in
a
seemingly
never‐ending
stream
of
developed
country
non‐tariff
barriers
used
as
green
protectionism.
Depending
on
how
carbon‐labelling
schemes
are
developed,
they
could
well
provide
new
market
opportunities
and
niches
for
developing
countries
based
on
carbon
efficiency.
Meanwhile,
for
consumers
to
trust
new
carbon
labels,
they
must
be
developed
in
an
open
and
transparent
manner,
with
clarity
around
what
greenhouse
gas
emissions
they
account
for,
and
which
ones
they
do
not—how
they
interact
with
other
social
and
environmental
standards,
and
how
they
affect
development
opportunities
in
developing
countries.
However,
they
must
also
be
simple
to
understand
in
order
to
be
relevant.

Key
issues
The
food
miles
debate
Simply
put,
food
miles
are
the
distance
that
food
travels
from
the
field
where
it
was
grown
to
the
plate
where
it
is
consumed.
The
objective
in
measuring
these
distances
is
to
determine
the
environmental
impact
based
on
the
carbon
emitted
during
transport,
whether
by
air,
sea,
lorry
or
car.
Most
bulk
products
are
shipped
by
sea;
fresh
produce,
however,
needs
to
reach
the
consumer
quickly
and
airfreight
is
the
only
option.
The
carbon
emissions
associated
with
air‐freighted
products
are
high—177
times
greater
than
for
products
being
shipped
by
sea.
This
means
that
mangos
from
Brazil,
strawberries
from
Kenya
and
asparagus
from
Mexico
being
sent
to
European
supermarkets
have
a
significant
environmental
impact
based
on
the
miles
they
have
travelled
to
reach
their
final
destination.
Among
all
food
products
transported
internationally,
the
most
miles
are
clocked
by
such
out‐of‐season
fruits
and
vegetables
arriving
from
distant
countries.
For
many
governments,
supermarkets,
and
even
some
environmental
advocates,
the
simple
solution
to
reducing
the
carbon
miles
generated
by
food
travel
is
to
buy
locally.
In
supermarkets
throughout
Europe,
fresh
produce
from
abroad
is
being
labelled
with
a
sticker
depicting
an
airplane
to
alert
consumers
that
it
was
imported
via
air
freight.
The
policy
behind
this
labelling
is
to
encourage
consumers
to
purchase
local
products
and
also
to
provide
incentives
to
the
company
itself
to
source
as
much
food
locally
as
possible,
to
grow
local
supply
networks
and
to
offset
carbon
emissions
from
air‐freighted
products.
Problems
with
food
miles
In
most
countries,
even
food
produced
nationally
travels
extensively
before
getting
to
retailers.
While
these
trips
are
made
by
lorry
as
opposed
to
airplane,
the
carbon
emitted
during
cross‐country
tours
is
not
negligible.
Add
in
the
cars
used
by
most
consumers
to
get
from
their
homes
to
the
market,
and
the
carbon
footprint
is
on
par
with
that
of
airfreighted
products.
Another
major
challenge
with
buying
local
is
that
transport
is
only
part
of
the
equation.
Agricultural
methods
used
in
producing
food,
the
types
of
processing
manufacturers
use,
and
storage
methods
also
play
an
important
role.
Studies
have
shown,
for
instance,
that
lamb
grown
in
the
U.K.
and
sold
locally
has
a
greater
carbon
footprint
than
lamb
grown
in
New
Zealand,
11,000
miles
away.
This
is
because
New
Zealand
uses
more
energyefficient
and
environmentally‐friendly
methods
for
raising
its
lamb
than
the
U.K.
does.
Beyond
the
environmental
aspects
of
food
miles,
there
are
social
implications
to
be
considered.
Development
advocates
say
it
does
not
make
sense
to
halt
air‐freighted
products
and
encourage
local
food
production,
as
this
would
hurt
the
poorest
suppliers

in
least‐developed
and
developing
countries
that
rely
heavily
on
revenue
from
exported
products.
Growing
fresh
produce
provides
a
crucial
source
of
income
for
the
poorest
of
the
poor
in
these
already
vulnerable
countries,
and
countless
livelihoods
would
be
at
stake.
The
fresh
fruit
and
vegetable
trade
with
the
U.K.,
for
instance,
generates
US$400
million,
which
supports
one
million
people
living
in
Africa.
If
developed
countries
were
to
buy
only
locally,
the
development
implications
would
be
significant.
Carbon
lifecycle
analysis
The
failure
of
the
“food
miles”
concept
to
account
for
social
implications
has
caused
many
in
the
trade
and
development
community
to
critique
the
concept.
So
too
have
some
environmentalists
that
believe
the
idea
is
too
simplistic
in
its
focus
on
carbon
emitted
solely
during
transport.
These
critics
are
instead
calling
for
a
full
life‐cycle
analysis
(LCA)
of
the
carbon
footprint;
that
is,
measuring
the
carbon
emissions
from
the
field
to
the
plate
by
accounting
for
agricultural
methods,
processing,
energy,
soil,
distribution
and
everything
in
between.
The
full
life
cycle
is
a
kind
of
cradle‐to‐grave
approach
for
determining
the
carbon
impact
of
foodstuffs.
As
this
calculation
is
based
not
only
on
miles
travelled
but
on
carbon
emitted
during
the
entire
production
process,
it
is
less
likely
to
discriminate
against
developing
country
exports
the
way
food
miles
schemes
have
done.
Some
companies
and
supermarket
chains
have
started
implementing
carbon
labelling
programs
based
on
LCA,
and
are
moving
from
agricultural
products
(with
simple
value
chains)
to
also
include
more
complex
industrial
products.
Labelling
standards
that
ensure
consistency
and
comparability
among
products
carrying
the
tag
are
being
created
by
the
Carbon
Trust,
a
private
company
established
by
the
U.K.
government
to
help
Britain
move
towards
a
low
carbon
economy.
The
Carbon
Trust
is
working
to
develop
an
agreed
method
to
measure
the
embodied
greenhouse
gases
among
a
wide
range
of
products.
Once
calculated,
the
label
will
show
the
amount
of
carbon
in
grams
much
like
the
nutrition
label
provides
the
amount
of
sodium
or
fat
in
foods.
The
standards
and
the
labels
are
still
in
their
trial
stages.
Once
the
standard
is
in
place,
manufacturers
can
voluntarily
sign
up
to
have
their
products
carry
the
label.
The
process
of
certification
and
monitoring
will
be
handled
by
independent
companies
to
ensure
that
manufactures
are
adhering
to
the
standards.
Private
sector
standards
and
the
WTO
Carbon
labelling
schemes
developed
thus
far
have
all
been
initiated
by
the
private
sector.
Within
the
WTO
Committee
on
Sanitary
and
Phytosanitary
Standards
(SPS),
debate
is
ongoing
on
these
types
of
standards,
which
some
Members
consider
to
be
the
new

frontier
of
protectionism.
As
actual
trade
tariffs
come
down,
these
types
of
non‐tariff
barriers
take
their
place.
A
number
of
developing
countries,
in
particular,
have
been
highly
critical
of
the
use
of
private
sector
standards,
arguing
that
they
reduce
the
efficacy
of
the
SPS
regime
by
creating
higher
standards
outside
of
government
control.
These
countries
stress
that
the
standards
are
arbitrary
and
end
up
penalizing
developing
countries
and
small
farmers
exporting
to
the
North
since
they
lack
capacity
and
funding
to
comply.
Many
developing
countries
argue
that
governments
should
to
take
responsibility
for
standards
set
by
private‐sector
actors
within
their
boundaries.
Others,
especially
developed
countries,
say
that
private
sector
standards
fall
outside
the
remit
of
the
WTO
and
its
SPS
Agreement.
Under
the
Agreement
on
Technical
Barriers
to
Trade
(TBT),
which
would
appear
to
apply
more
directly
to
carbon
labelling
initiatives,
private
sector
labelling
schemes
are
covered
in
addition
to
public
labelling
schemes.
However,
there
is
no
ongoing
debate
on
the
topic
within
the
TBT
Committee.

Sub‐topic:
Standards
and
labelling
–
PPMs
Overview
Discussions
and
developments
at
the
trade
and
climate
change
interface
touch
directly
on
the
issue
of
how
the
WTO
deals
with
process
and
production
methods
(PPMs).
One
of
the
key
principles
underpinning
the
WTO
is
that
Members
cannot
discriminate
among
“like”
products,
no
matter
in
which
Member
nation
they
are
produced.
In
order
to
make
distinctions
regarding
the
carbon
impact
of
a
product,
they
way
it
was
produced
is
key.
However,
this
is
not
always
obvious
just
by
looking
at
the
final
product
itself—is
it
“like”
or
“unlike”
a
similar
product
for
which
massive
amounts
of
greenhouse
gases
were
released
during
production?
Taking
PPMs
into
consideration
implies
looking
beyond
the
borders
of
countries
at
production
issues.
Many
countries—especially
developing
ones—feel
this
unjustly
impinges
on
sovereignty.
They
feel
concerned
especially
because
most
PPM‐based
standards
and
labels
are
imposed
by
rich
developed
countries
and
have
the
potential
negatively
affect
the
exports
of
developing
countries.
The
issue
is
relevant
not
only
for
carbon
standards
and
labelling
initiatives,
but
also
within
the
Doha
Round
negotiations
on
the
liberalization
of
environmental
goods
and
services,
including
climate‐friendly
goods.
WTO
jurisprudence
does,
however,
seem
to
imply
that
the
use
of
PPMs
is
legal,
as
long
as
the
country
restricting
imports
based
on
PPMs
has
made
efforts
to
ensure
that
the
restrictions
are
fair,
transparent
and
based
on
a
cooperative
approach.
As
such,
an
importing
country
is
not
imposing
its
own
standards
and
norms
on
other
countries,
but
rather
making
sure
that
products
entering
its
own
territory
conform
to
such
norms.
Here,
it
would
appear
to
be
important
that
the
way
the
exporter
chooses
to
conform
with
the
norms
is
not
restricted,
but
that
the
exporter
can
embark
on
its
own
path
to
achieve
the
same
goals.
For
example,
process‐related
greenhouse
gas
restrictions
can
be
achieved
in
a
wide
variety
of
ways.
This
is
recognized
under
the
UNFCCC,
which
allows
countries
to
choose
themselves
what
policies
and
measures
to
use
to
achieve
climate
goals.

Key
issues
Competitiveness
and
border
adjustments
Beyond
being
directly
applicable
to
carbon
labelling
schemes
and
certain
climate
and
energy‐related
standards,
PPMs
also
play
a
role
in
other
climate
measures
countries
are
contemplating
to
tackle
climate
change.
As
some
countries
take
on
stricter
climate
targets
than
others,
they
will
implement
a
wide
range
of
policies
and
measures
to
implement
these
targets.
These
policies
will
often
make
production
in
these
countries
more
expensive
due
to
higher
energy
prices,
requirements
to
buy
carbon
credits
under
emissions
trading
schemes,
and
so
forth.
Countries
are
therefore
concerned
that
by
taking
on
climate
change
commitments,
they
will
put
their
industries—at
least
the
energy
and
carbon‐intensive
ones—at
a
disadvantage.
For
this
reason,
they
are
looking
to
take
measures
to
ensure
that
their
exports
are
not
penalized
on
the
global
markets,
and
to
avoid
“leakage,”
that
is,
relocation
of
greenhouse
gas
intensive
industries
to
slacker
jurisdictions
with
associated
higher
overall
greenhouse
gas
emissions.
They
are
looking
at
different
options,
such
as
different
types
of
border
adjustments
that
would
level
the
carbon
playing
field.
Such
adjustments
would
have
to
directly
factor
in
PPMs.
Current
discussions
on
“embedded”
carbon
also
relate
directly
to
PPMs.
This
refers
to
the
fact
that
carbon
emissions
related
to
the
production
of
a
good
are
accounted
for
in
the
country
of
manufacture,
not
consumption,
in
national
carbon
inventories
under
the
UNFCCC.
Some
have
argued
that
carbon
accounting
systems
should
be
revised
on
this
point,
though
any
practical
effort
to
move
in
this
direction
remains
daunting.
Certification
schemes
Closely
linked
to
carbon
labelling
schemes,
schemes
certifying
traded
goods
from
a
carbon
vantage
point
and
taking
on‐board
additional
sustainability
criteria
are
on
the
rise.
For
example,
the
EU
is
planning
a
certification
scheme
for
biofuels
that
will
set
sustainability
requirements
beyond
carbon
impact,
including
secondary
impacts
on
land
use
and
biodiversity,
and
requiring
producers
to
be
parties
to
a
number
of
international
agreements
on
environmental
and
labour
issues
(the
latter
in
particular
being
a
longstanding
controversial
issue
for
developing
countries,
and
a
major
reason
they
have
tended
to
oppose
bringing
PPMs
within
the
WTO).
Major
producer
countries
have
already
threatened
to
challenge
this
scheme
at
the
WTO.
If
this
were
to
happen,
the
systemic
implications
of
a
ruling
would
be
wide
ranging.
Meanwhile,
a
number
of
private
sector
certification
schemes
on
biofuels
are
already
up
and
running,
and
many
companies
from
countries
opposed
to
official
biofuels
certification
schemes
have
signed
on
and
helped
develop
them.
Indeed,
one
of
the
problems
appears
to
be
the
proliferation
of
different
and
partially
overlapping
schemes,

which
will
be
difficult
especially
for
smaller
producers
and
countries
to
navigate,
influence
and
make
use
of.
Discrimination
and
inclusiveness
Developing
countries
have
opposed
the
use
of
process
and
production
methods
on
the
basis
that
it
would
create
a
de
facto
trade
barrier
for
them,
since
it
is
only
the
wealthier
countries
that
would
have
high
standards
and
complex
PPM‐based
labelling
schemes,
and
only
they
have
the
financial
and
technical
resources
to
comply
with
them.
However,
in
some
cases
developing
countries
might
actually
have
an
advantage
in
terms
of
producing
cleaner
goods
through
cleaner
processes—and
the
possibility
to
capture
new
markets.
However,
in
order
to
make
use
of
any
such
opportunities,
developing
countries
need
to
be
involved
in
standard‐setting
and
labelling
processes.
In
this
regard,
technical
assistance
could
be
provided
both
under
the
WTO
and
UNFCCC.