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Care to disclose your carbon ?

- Thursday, July 02, 2009

An interesting element of the US Waxman-Markey climate change legislation (The American Clean Energy and Security Act or ACES)  is the proposed “Product Carbon Disclosure Program”, outlined in Section 274. This section requires the US Environmental Protection Agency (EPA) to conduct a study to determine the feasibility of a national program to measure, disclose and provide label information about the emissions associated with any product sold in the USA. Food and clothing are identified as sectors likely to be allocated a higher priority for this provision.

The section includes a proposal to investigate whether default values should be allocated to products whose producer does not provide emission data, and the need for a consumer education program on carbon labeling. The timeline allocated to this study is 18 months. The proposed legislation then requires that within the following 18 months a voluntary National Carbon Disclosure program should be established, involving the development of a product carbon (tonnes of CO2-e emissions associated with the product and its associated value chain) labeling system with broad applicability to wholesale and consumer markets. A report is required to Congress within five years of the establishment of the program.

Although the proposed program is initially voluntary, it raises the distinct possibility of carbon labelling being required for products imported into the USA within the next three to five years. This could arise even sooner if retailers, for example, incorporated such a requirement into their supplier quality assurance requirements in anticipation of it becoming mandatory.

This potentially creates challenges for Australian beef, wool, wine, horticulture and sheepmeat exports to the USA, and may mean Australian producers will need to adopt US standards to carry out life-cycle assessments of the energy and emissions associated with their products.

A sensible measure, or just another US non-tariff trade barrier in the making?

The text of the American Clean Energy and Security Act is available here, under H.R.2454.

Amy Russell commented on 10-Jul-2009 02:11 PM
The US approach seems to be a regulatory version of what has been emerging in the UK. It has suddenly become clear to me why the US were among the most vocal in opposing the ISO to take up the UK's PAS 2050 carbon footprint methodology, based on LCA, as the basis for a carbon footprint ISO. It seems that they have their own method that they'd like to see become the standard!

Already the UK methodology has encroached on the Australian domestic market with Planet Ark partnering with the UK Carbon Trust to launch the Carbon Reduction Label, based on PAS 2050, for Australian products.

This issue is spiralling out of control and has become a consultant's paradise. The problem for producers is knowing which scheme to back, and therefore apply in their own operation.

One also wonders at what point the WTO will take an interest?
Anonymous commented on 10-Jul-2009 02:27 PM
I agree entirely. It seems to me there are as many standards and different ways to count carbon as there are consultants offering to provide the service!
Amy Russell commented on 21-Jul-2009 10:00 AM
It should be of further concern to Australian industry then that Standards Australia are having to implement a range of efficiency measures to cut costs, including withdrawing from involvement in processes to set standards where funding support is not forthcoming from relevant industries. Standards Australia have been running a fledgling process to contribute to international (and by default national) carbon footprint standards development, but without direct industry support, this seems at risk of being cut. Is the issue important enough for industries to offer financial support to develop a single formal standard? This could also only improve industry participation on the standard setting committee, currently dominated by consultants and academics.

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