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This paper considers environmental labelling (or ecolabelling for short) and, in particular, the European Union’s (EU’s) ecolabelling scheme. The procedure and problems of the ecolabelling scheme are described. Besides the EU scheme, many national private and governmental ecolabel schemes also exist in the member states, and this leads to competition among different ecolabelling schemes. It is argued that the disadvantages of such competition are outweighed by the advantages as competition between schemes helps, for example, to alleviate some of the inherent problems of ecolabelling. However, competition can only be beneficial if the competitive process is steered so that it serves consumer interests. To this end, additional institutions and rules should be established to avoid consumer confusion and to provide transparency and to make comparison between ecolabel schemes possible.
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Karl et al. (1999) studied this question.
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