paper presentation

1. Green MarketingGreen Marketing

2. What is it?What is it?
 Using claims about a product'sUsing claims about a product's
environmental "friendliness" in orderenvironmental "friendliness" in order
to promote the productto promote the product

3. Examples of “green” advertisingExamples of “green” advertising
claims?claims?
 biodegradablebiodegradable
 compostablecompostable
 recyclable/recycledrecyclable/recycled
 environmentally safeenvironmentally safe
 ozone friendlyozone friendly

4. Why do companies use it?Why do companies use it?
 Research shows that consumersResearch shows that consumers
prefer--and are willing to spend moreprefer--and are willing to spend more
money on--products they perceive asmoney on--products they perceive as
environmentally safeenvironmentally safe
 More than half of AmericanMore than half of American
consumers have purchased a productconsumers have purchased a product
because of a label that said it wasbecause of a label that said it was
environmentally safe orenvironmentally safe or
biodegradablebiodegradable

5. Are there problems of deceptionAre there problems of deception
with “green” claims?with “green” claims?
 KeyesKeyes FibreFibre Company'sCompany's claims for Chinetclaims for Chinet
disposable tablewaredisposable tableware
• biodegradablebiodegradable
• compostable in municipal solid wastecompostable in municipal solid waste
composting facilitiescomposting facilities
• RecyclableRecyclable
 In fact, according to the FTCIn fact, according to the FTC
• Won’t degrade in landfillWon’t degrade in landfill
• Few municipal composting facilitiesFew municipal composting facilities
• No facilities accept it for recyclingNo facilities accept it for recycling

6. Why are consumers fooled by suchWhy are consumers fooled by such
claims?claims?
 consumers generally can't tellconsumers generally can't tell
whether a product will do what thewhether a product will do what the
advertiser claimsadvertiser claims
• degrade in a landfilldegrade in a landfill
• not deplete the ozone layernot deplete the ozone layer
 even if the claims are true, it mayeven if the claims are true, it may
not be evident for five, ten, fifty ornot be evident for five, ten, fifty or
more yearsmore years

7.  As a result of concerns aboutAs a result of concerns about
growing use of such claims, the FTCgrowing use of such claims, the FTC
issued Guides for the Use ofissued Guides for the Use of
Environmental Marketing ClaimsEnvironmental Marketing Claims

8. What do the Guides cover?What do the Guides cover?
Any way in which a message can beAny way in which a message can be
receivedreceived
 labelinglabeling
 advertisingadvertising
 promotional materialspromotional materials

9. Any form a message can takeAny form a message can take
 wordswords
 symbolssymbols
 emblemsemblems
 logoslogos
 depictionsdepictions
 product brand namesproduct brand names

10. 260.6 General Principles260.6 General Principles
(a) Any qualifications or disclosures(a) Any qualifications or disclosures
should be sufficiently clear,should be sufficiently clear,
prominent and understandable toprominent and understandable to
prevent deceptionprevent deception
(b) Claim should make clear whether it(b) Claim should make clear whether it
applies to the product or the packageapplies to the product or the package
(c) Claims should not overstate the(c) Claims should not overstate the
environmental attribute or benefitenvironmental attribute or benefit

11. 260.7 Environmental Marketing260.7 Environmental Marketing
ClaimsClaims
(a) General claims (e.g., “eco-safe”)(a) General claims (e.g., “eco-safe”)
must bemust be
 not misleadingnot misleading
 substantiated in advance of the claimsubstantiated in advance of the claim
• burden of proof on advertiserburden of proof on advertiser

12. (b) Claims of degradability,(b) Claims of degradability,
biodegradability, and photodegradabilitybiodegradability, and photodegradability
 are deceptive unless there isare deceptive unless there is
scientific evidence that the entirescientific evidence that the entire
product or package willproduct or package will completelycompletely
break down and return to nature (i.e.break down and return to nature (i.e.
decompose) within a reasonablydecompose) within a reasonably
short period of timeshort period of time

13. (c) Claims of compostability (of the(c) Claims of compostability (of the
product or package)product or package)
 are deceptive unless all the materialsare deceptive unless all the materials
in the product or package will breakin the product or package will break
down into usable compost in a safedown into usable compost in a safe
and timely mannerand timely manner
• in an appropriate composting facility; orin an appropriate composting facility; or
• a home compost pilea home compost pile

14.  are deceptive ifare deceptive if
• the item is not compostable in a homethe item is not compostable in a home
compost pile; andcompost pile; and
• there are no institutional or municipalthere are no institutional or municipal
composting facilities in the communitycomposting facilities in the community
where the item is soldwhere the item is sold

15. (d) Claims of recyclability(d) Claims of recyclability
 are deceptive unless the product orare deceptive unless the product or
package can be collected, separated orpackage can be collected, separated or
otherwise recovered from the solid wasteotherwise recovered from the solid waste
streamstream
• for reuse; orfor reuse; or
• in the manufacture or assembly of anotherin the manufacture or assembly of another
package or productpackage or product
• through an established recycling programthrough an established recycling program

16.  If only part of a package or item isIf only part of a package or item is
recyclable, any claim of recyclabilityrecyclable, any claim of recyclability
must be adequately qualified tomust be adequately qualified to
avoid consumer deceptionavoid consumer deception
 A claim of recyclability is notA claim of recyclability is not
deceptive if only minor, incidentaldeceptive if only minor, incidental
components are non-recyclablecomponents are non-recyclable

17.  Claims of recyclability have uniqueClaims of recyclability have unique
potential for deception becausepotential for deception because
 not all communities have recyclingnot all communities have recycling
facilitiesfacilities
 not all facilities recycle the samenot all facilities recycle the same
products and packagesproducts and packages

18. As a general rule, use of the term "recyclable"As a general rule, use of the term "recyclable"
and/or use of symbols that imply recyclability areand/or use of symbols that imply recyclability are
deceptivedeceptive
 unless collection sites for recycling the materialunless collection sites for recycling the material
are available to aare available to a substantial majority ofsubstantial majority of
consumers or communitiesconsumers or communities
 even if collection sites are established in aeven if collection sites are established in a
significant percentage of communities or availablesignificant percentage of communities or available
to a significant percentage of the populationto a significant percentage of the population
 unless the claim is qualified to indicate the limitedunless the claim is qualified to indicate the limited
availability of recycling programsavailability of recycling programs

19. Symbols that imply recyclability includeSymbols that imply recyclability include
 three chasing arrowsthree chasing arrows
• FTC Guide says that, unless qualified, it meansFTC Guide says that, unless qualified, it means
product or package is made ofproduct or package is made of recycledrecycled
materials as well as being recyclablematerials as well as being recyclable
 SPI symbolSPI symbol
• code developed by the Society of the Plasticscode developed by the Society of the Plastics
Industry to indicate the type of plastic fromIndustry to indicate the type of plastic from
which product is madewhich product is made
• numbers run from 1 to 7numbers run from 1 to 7

20. Qualifications that adequately notifyQualifications that adequately notify
consumers of limited availability ofconsumers of limited availability of
recycling programs includerecycling programs include
 "This bottle may not be recyclable in your"This bottle may not be recyclable in your
area"area"
 "Recyclable in the few communities with"Recyclable in the few communities with
facilities for foam polystyrene cups"facilities for foam polystyrene cups"
 providing the approximate number orproviding the approximate number or
percentage of communities or populationpercentage of communities or population
to whom programs are availableto whom programs are available

21. (h) Claims relating to the preservation(h) Claims relating to the preservation
of the ozone layerof the ozone layer
 For example:For example:
• ozone safeozone safe
• ozone friendlyozone friendly
• contains no CFCscontains no CFCs
 are deceptive if the product containsare deceptive if the product contains
any ozone-depleting substanceany ozone-depleting substance

22.  Problem: all ozone is not alike:Problem: all ozone is not alike:
 ozone layer in upper atmosphere isozone layer in upper atmosphere is
necessary to prevent sun's harmfulnecessary to prevent sun's harmful
radiation from reaching earthradiation from reaching earth
 ozone at ground level forms smogozone at ground level forms smog
• can cause serious breathing problemscan cause serious breathing problems
 "ozone safe" products should not"ozone safe" products should not
harm the atmosphere at either levelharm the atmosphere at either level

23. Green PowerGreen Power
 Green marketing heavily used inGreen marketing heavily used in
electricity generation/marketingelectricity generation/marketing
 What is green power?What is green power?
 electric power that iselectric power that is
• generated by renewable resourcesgenerated by renewable resources
• less polluting than fossil fuels andless polluting than fossil fuels and
nuclear powernuclear power

24. What types of power are “green”?What types of power are “green”?
 WindWind
 BioenergyBioenergy
 Geothermal energyGeothermal energy
 Solar powerSolar power
 Hydroelectric powerHydroelectric power

25. Why is green power attractive toWhy is green power attractive to
consumers?consumers?
 Electricity generation is largest industrialElectricity generation is largest industrial
polluter in US; currently produces:polluter in US; currently produces:
 two-thirds of the annual U.S. emissions oftwo-thirds of the annual U.S. emissions of
sulfur dioxide (main cause of acid rain)sulfur dioxide (main cause of acid rain)
 30 percent of the nitrogen oxide emissions30 percent of the nitrogen oxide emissions
(stress forest ecosystems; combine with(stress forest ecosystems; combine with
organic compounds in sunlight to formorganic compounds in sunlight to form
smog)smog)
 40 percent of carbon dioxide emissions40 percent of carbon dioxide emissions
 toxic-metal emissions (mercury and lead)toxic-metal emissions (mercury and lead)
 nuclear waste.nuclear waste.

26. What are the “dirtiest” energyWhat are the “dirtiest” energy
sources?sources?
 CoalCoal
 OilOil
 Nuclear powerNuclear power
 Natural GasNatural Gas

27. What are the green power options?What are the green power options?
1. Green Pricing1. Green Pricing
 Consumers do not have to change theirConsumers do not have to change their
electricity providerelectricity provider
 Customers choose to pay a premium onCustomers choose to pay a premium on
their electricity bill to cover the extra costtheir electricity bill to cover the extra cost
of purchasing clean, sustainable energyof purchasing clean, sustainable energy
 As of March 2003, more than 300As of March 2003, more than 300
electricity providers in 32 states haveelectricity providers in 32 states have
implemented green pricing options orimplemented green pricing options or
announced plans to do soannounced plans to do so
 Green Mountain Power’sGreen Mountain Power’s CoolhomeCoolhome,,
CoolbusinessCoolbusiness

28. 2. Green Marketing2. Green Marketing
 Sale of green power in competitiveSale of green power in competitive
markets; consumers have option tomarkets; consumers have option to
choose among suppliers and servicechoose among suppliers and service
offeringsofferings
• like choosing long-distance telephone carrierslike choosing long-distance telephone carriers
 As of October, 2003 green marketing wasAs of October, 2003 green marketing was
available in nine statesavailable in nine states
• all in the northeast except Texasall in the northeast except Texas
• not in Vermontnot in Vermont

29. 3. Green Tags3. Green Tags
 Tradable Renewable Certificates (TRCs)Tradable Renewable Certificates (TRCs)
represent the environmental (non-power)represent the environmental (non-power)
attributes or benefits of renewable electricityattributes or benefits of renewable electricity
generationgeneration
 consumer pays for the benefit of adding clean,consumer pays for the benefit of adding clean,
renewable energy generation to the regional orrenewable energy generation to the regional or
national electricity gridnational electricity grid
 provides same environmental benefit asprovides same environmental benefit as
purchasing green pricing or green marketingpurchasing green pricing or green marketing
productproduct
 provide “green” option for people in statesprovide “green” option for people in states
where green pricing/marketing not availablewhere green pricing/marketing not available

30. Consumer Protection Issues inConsumer Protection Issues in
Green PowerGreen Power
 When power flows from theWhen power flows from the
generator to your house, electronsgenerator to your house, electrons
get mixed together on the wiresget mixed together on the wires
• You can't specify which electrons youYou can't specify which electrons you
getget
• you can't know for sure if they are beingyou can't know for sure if they are being
generated by "green" power sourcesgenerated by "green" power sources
 A number of mechanisms have beenA number of mechanisms have been
established to avoid consumerestablished to avoid consumer
deceptiondeception

31. 1. Voluntary certification1. Voluntary certification
 Green-eGreen-e
 Establishes consumer protection and environmentalEstablishes consumer protection and environmental
standards for electricity products, and verifies that thesestandards for electricity products, and verifies that these
products meet the standards.products meet the standards.
 Standards include:Standards include:
 50% or more of the electricity supply comes from one or50% or more of the electricity supply comes from one or
more of these eligible renewable resources: solar, wind,more of these eligible renewable resources: solar, wind,
geothermal, biomass, and small or certified low-impactgeothermal, biomass, and small or certified low-impact
hydro facilitieshydro facilities
 if a portion of the electricity is non-renewable, the airif a portion of the electricity is non-renewable, the air
emissions are equal to or lower than those produced byemissions are equal to or lower than those produced by
conventional electricityconventional electricity
 there are no specific purchases of nuclear power, andthere are no specific purchases of nuclear power, and
 the product meets the Green-ethe product meets the Green-e new renewablenew renewable requirementrequirement

32. 2. State standards2. State standards
 In 2002 Illinois established a "green powerIn 2002 Illinois established a "green power
standard" for green power claims. The standardstandard" for green power claims. The standard
establishes three tests:establishes three tests:
 100% of the power must come from new clean100% of the power must come from new clean
power sources (i.e., coming online after Januarypower sources (i.e., coming online after January
1, 2002)1, 2002)
 at least 2/3 of the power must be produced byat least 2/3 of the power must be produced by
wind or solar energy, with the remainder fromwind or solar energy, with the remainder from
other renewable energy sources such as landfillother renewable energy sources such as landfill
gas, small hydro, and biopowergas, small hydro, and biopower
 the power purchase must create clear air qualitythe power purchase must create clear air quality
benefits for the Illinois airshedbenefits for the Illinois airshed

33. 3. National Association of Attorneys3. National Association of Attorneys
General (NAAG)--EnvironmentalGeneral (NAAG)--Environmental
Marketing Guidelines for ElectricityMarketing Guidelines for Electricity
 Provisions include:Provisions include:
 term "green" and other similarly generalterm "green" and other similarly general
statements of environmental benefit should bestatements of environmental benefit should be
used with caution; every implied representationused with caution; every implied representation
of environmental benefit must be substantiatedof environmental benefit must be substantiated
 term "clean energy" means energy whoseterm "clean energy" means energy whose
generation does not cause significant emissionsgeneration does not cause significant emissions
 a "renewable" energy source is one which isa "renewable" energy source is one which is
naturally replenishable and is replenished onnaturally replenishable and is replenished on
some reasonable time framesome reasonable time frame

34. Green Power in VermontGreen Power in Vermont
 Apparently the only green power optionApparently the only green power option
available in Vermont is Green Mountainavailable in Vermont is Green Mountain
Power'sPower's Cool HomeCool Home projectproject
 Customers make a $6 monthly tax-Customers make a $6 monthly tax-
deductible contribution to the non-profitdeductible contribution to the non-profit
group Clean Air-Cool Planetgroup Clean Air-Cool Planet
 through the Vermont-based groupthrough the Vermont-based group
NativeEnergyNativeEnergy, new renewable energy, new renewable energy
projects are developedprojects are developed
• wind farmswind farms
• farm methane systemsfarm methane systems