Eco-labelling—a case for deregulation?

The general disenchantment with command-and-control mechanisms led to pressure to experiment with tools of deregulation which encourage the desired behaviour through financial incentives rather than through legal coercion. Eco-labelling can be seen as a representation of this trend to deregulate environmental protection by allowing industry to make the decision of whether or not to apply for the label and allowing consumers to decide to shop accordingly. Eco-labelling aims to identify and promote products that have a reduced environmental impact when compared to other similar products. It is a voluntary method of environmental performance certification and labelling that is practised around the world and functions through the co-operation of the three sectors: industry, consumers and eco-labelling authority. This paper will look at Germany's Blue Angel, a national eco-label, and the European Flower, the eco-label for the European Union, to determine whether eco-labelling can be considered a successful mechanism of deregulation.