The Federal Trade Commission’s Green Guides – What is “Green” and what is merely gray

Posted on November 9, 2012 by Elliot Laws

We’ve all seen the advertisements. Products that are supposedly “recycled,” “environmentally friendly,” and “green,” with labels and commercials resplendent in shades of light green and yellow, seeking to evoke nature, sunlight, and a family-friendly, non-toxic product. But how “green” must a product be in order to rightfully proclaim itself to be so? The revised “Green Guides,” issued by the Federal Trade Commission (“FTC”) on October 1, 2012, propose to answer that very question.

Originally issued in 1992, and revised in 1996 and 1998, the FTC’s “Green Guides” offer guidance to marketers on how to properly use words of environmental attribution in describing products. The Guides are examples of environmental claims that the FTC might find deceptive under the FTC Act, § 5; they are neither rules nor regulations. The current version of the Guides was released in proposed form in 2010 and received several hundred unique comments. Beyond analyzing the comments, the FTC accumulated additional information based on three public workshops and a study designed to understand how consumers perceived environmental claims. The final version of the Guides, in addition to updating its original content, provided additional information on newer types of environmental claims.

The new sections in the Guides cover carbon offsets, certifications and seals of approval, “free-of” claims, non-toxic claims, and two claims relating to the manner and materials used in production: renewable energy claims and renewable materials claims. As an illustration of the new sections, the FTC addresses deceptive practices used to claim an emissions reduction through carbon offsets. Marketers should “clearly and prominently disclose if the carbon offset” does not provide an emissions reduction for over two years. Similarly, claiming that a carbon offset corresponds to an emissions reduction that is otherwise required by law is a deceptive practice.

Other sections are modified. For example, the Guides clarify that an unqualified degradable claim must be able to show that the entire product or package will break down completely within one year after disposal. Objects that are expected to go to a landfill, incinerator, or be recycled do not degrade within a year, and thus should not be linked to such a claim. In each of its 13 total sections, the FTC provides concrete examples of practices it terms deceptive.

The Guides recommend that some environmental claims not be used at all, such as “environmentally friendly” or “eco-friendly.” The consumer study performed by the FTC found that these terms indicate wide-ranging environmental benefits that few, if any, products may obtain. The Guides do not address “sustainable,” “natural,” and “organic” to avoid conflicting or duplicative advice from other agencies that have the purview of these terms.

In order to provide assistance to the general public in understanding the Guides, the FTC produced several educational and business resources, from summaries to a highlight video to relevant legal documents. These resources, in conjunction with the Green Guides themselves, provide protection to consumers, allowing us more transparency into just how “green” our products really are.

Energy Subsidies: Weighing the Playing Field

Posted on March 9, 2012 by Elliot Laws

Even as a latent issue, subsidies to the oil and gas industry have the potential to be a political hot potato.  But with President Obama putting them front and center in his recent speech at New Hampshire’s Nashua Community College, the issue joins the already crowded landscape of political fodder heading into the fall elections.  President Obama’s “all of the above” energy program covers a variety of activities, including production of oil and gas, funding renewable energy sources, and encouraging innovation of new technologies.  In the end, fossil fuels are an exhaustible source of energy that cannot be the total answer to our energy needs, as even oil and gas companies recognize.  And they come with a real set of hazards, as the recent Deepwater Horizon settlement reminds us.
 
Although not directly part of his “all of the above” energy program, President Obama is rightfully addressing government subsidies for oil and gas that could be migrating towards increasing subsidies for solar farms and wind turbines.  While fossil fuels will eventually run out, wind, solar, and biomass will not, but have yet to enjoy the level of support afforded to the oil and gas industry.  According to a recent analysis of the economics of energy by experts at the Imperial College London and the UK Energy Research Center electricity from wind power may, in five years, be less expensive than electricity from natural gas in the U.K. if current levels of government subsidies were transferred to renewable energy sources.
 
While the study is specific to the United Kingdom, there are takeaways applicable in the U.S.  First the analysis recognizes the important support that subsidies provided to oil, gas, and nuclear energy development when each were in infancy.  Through those subsidies, energy companies were encouraged to develop technologies, survey areas that were geologically ripe for oil and gas exploration, and hire workers to help build up the industry.  Second, now that oil, gas and, to a lesser extent, nuclear energy sources are more completely developed, those subsidies should be transferred to the development of renewable energy.  In addition, the gains made by the wind and solar industry should not be set aside in search of the elusive promise of cheaper oil through more drilling.  Fossil fuels will run out.  If “all of the above” is to be a real strategy, then it must provide more of an equal opportunity for all sources of energy.
           
The Department of Energy recently announced $150 million in grants under its ARPA-E program.   This money is intended for development of cutting-edge energy technologies so that they can gain the necessary traction to be self-sufficient.  The announcement follows on the heels of an additional $30 million offered under the ARPA-E program toward development of natural gas-based vehicles.  Both these numbers pale in comparison to the $4 billion in yearly subsidies for oil and gas developers.   Even shifting half of the oil and gas subsidies into renewable and developing technologies could well make a dramatic difference in our overall energy future by encouraging the build-out of wind, solar, and biomass businesses into viable and self-sufficient industries.  There will come a time for a full discussion of the value of energy subsidies as a whole, but this would provide a fair start toward creating parity with fossil fuels.
               
The Deepwater Horizon disaster is a reminder of the cost associated with use of fossil fuels.  Significant government subsidies provided to the oil and gas industry played an important part in encouraging their initial and ongoing development.  Programs such as ARPA-E can provide a jump-start for emerging energy technologies, and shifting subsidies can offer a chance for “all of the above” to be a real solution.


OBAMA AND THE ENVIRONMENT

Posted on February 24, 2009 by Elliot Laws

As Lisa Jackson completes her first month as President Obama’s environmental chief, she is just scratching the surface on some of the myriad issues that will likely have impacts far beyond typical environmental concerns, for decades to come. There has to be some mixture of excitement and fear facing this new administration, as the challenges before it dwarf all of those in memory. That mixture will be especially prevalent at EPA. Usually in times like these — war, recession, high unemployment –— environmental issues can be expected to fade from the front pages. An EPA administrator would receive the old admonition to be seen and not heard. However, unlike past crises environmental issues are in the forefront — primarily in the form of climate change and energy. It is notable that when the government is lending billions of dollars to Citibank and debating the very existence of the big three automakers, one of the first actions of the incoming Obama administration has been to review EPA’s previous decision to deny California’s petition for a Clean Air Act waiver to allow it to regulate greenhouse gases from mobile sources.

 

 

The expectations for success that many Obama supporters have are high. Those expectations are high in the environmental community — perhaps too high. The ongoing financial collapse in the United States and abroad has changed the landscape in ways that could not have been imagined as recently as August, when Obama accepted the Democratic nomination for president. With the federal government having committed nearly $1 trillion in an attempt to save financial institutions across the country; with Congress passing an economic stimulus package costing an additional $750 billion; with the United States still conducting wars in Afghanistan and Iraq, outside of the infusion of stimulus cash for “shovel-ready projects” the expectation that EPA’s budget will experience significant increases over the Bush years is hardly a reasoned view. It’s not just the mind boggling challenge facing us on the economy, it’s also the difficult decisions that must be made to address climate change; it’s the need to seriously address the nation’s nearly suicidal dependence on foreign oil; and it’s myriad other issues that will all require hard choices and sacrifice.

 

Those expectations are probably low in the business community — as they normally are when the country shifts from a Republican to a Democratic administration. And similarly, those expectations are perhaps too low. I believe if this president will be true to one of his campaign promises, it is to govern in a way that puts partisanship on the sidelines. He has already proved that commitment by sending a strong signal to Senate Democrats that he does not wish to see retaliation against Senator Joe Lieberman (I-Connecticut) for his support not only of John McCain, but also Republican senatorial candidates in Minnesota, Maine, and Oregon. What Obama signaled with that position is that he is not going to put partisanship ahead of his plans to help America, even if partisans refuse his offers to join him.. He is looking at new alliances and will work with people who were not shy in their opposition to his election as he works as president. The mantra of “no permanent friends; no permanent enemies” is likely to be the Obama approach to working in Washington, DC.

 

We as a nation are facing an uncertain future. The environment is likely going to play a larger role in the lives of average Americans than it has since its heyday in the 1970s. Lisa Jackson has the monumental task of rallying an agency suffering from low morale, with precious few additional resources, to make decisions in perhaps the most hotly debated and controversial area of environmental law and policy ever. She will make recommendations and decisions that will have implications not only on the very future of the United States, but likely for the world as well. To the NGO community, the challenge is not to be disappointed as this president makes decisions that balance multiple important considerations and who will often decide that another consideration must trump the environmental choice. To the business community, the challenge is to be more optimistic and to show the initiative and courage necessary to work with this new administration and its traditional allies to solve the monumental problems facing the world.