- Variable relationship:
Ecolabels (Policy Instrument) are policies and programs that are designed to signal information to stakeholders about a product’s attributes, and reduce stakeholder uncertainty about the validity of green product claims (Daugbjerg et al. 2014). Ecolabels encourage firms to adopt best resource use practices (Commons Condition Trend) by making their products more marketable and/or increasing their market value (Markets).
There are different types of ecolabels. A key distinction exists between voluntary and mandatory labels. Within the voluntary labels group, the most renowned for their effectiveness are the so called "third-party" enforced labels (External Monitoring; External Sanctioning). Indeed, government involvement in ecolabels generally improves uptake (Horne 2009).
Voluntary ecolabels face typical collective action and transaction cost issues (Transaction Costs) associated with the possibility that some firms free-ride on the contributions of other firms to the reputation of the label, and on the burden born by consumers to acquire and process relevant information and compare different labels and products (Horne 2009; Truffer 2001).
- Scientific Field
- Component Type(s)
- Governance System
|Policy instrument||Proximate independent variable||Eco-labels are designed to signal information to stakeholders about a product’s resource conservation attributes so stakeholders can reward those practices via markets.||Information provision|
|External sanctions||Moderating independent variable||Third party monitoring guarantees that firms do follow resource conservation practices thus making the labels credible||Yes|
|External monitoring||Moderating independent variable||Third party monitoring guarantees that firms do follow resource conservation practices thus making the labels credible||Yes|
|Compliance||Moderating independent variable||Monitoring and sanctioning can enable the compliance needed to ensure that the eco-label scheme is effective.||Yes|
|Transaction costs||Moderating independent variable||The lower costs of information gathering and monitoring for consumers (i.e., understanding what the label represents and comparing it to others), as well as for producers (i.e., enforcement), the higher the net benefits of the ecolabels.||Low|
|Commons condition trend||Final outcome||Ecolabels pay off the resource conservation efforts by resource users/production firms which encourage these to invest in those efforts||Remained the same or improved|