Grantee Research Project Results
1999 Progress Report: Environmental Labeling of Electricity: Label Design and Performance
EPA Grant Number: R826618Title: Environmental Labeling of Electricity: Label Design and Performance
Investigators: Teisl, Mario F.
Institution: University of Maine
EPA Project Officer: Chung, Serena
Project Period: September 1, 1998 through August 31, 2000
Project Period Covered by this Report: September 1, 1998 through August 31, 1999
Project Amount: $72,573
RFA: Decision-Making and Valuation for Environmental Policy (1998) RFA Text | Recipients Lists
Research Category: Environmental Justice
Objective:
The objectives are to: (1) identify the types of environmental information that consumers will find useful when choosing among deregulated electricity products; (2) understand how different modes of disclosure affect consumers' ability to comprehend and utilize this information; (3) compare the effect of environmental certification (Type I labeling) and disclosure (Type III labeling) on consumers' perceptions of a product's environmental impact; and (4) understand how these preferences and label performance characteristics differ among consumers.Progress Summary:
During the first year of the project, we used experimental data to test the relative effectiveness of different environmental labeling programs on consumers' choices and rankings of electricity suppliers. Specifically, we compared the relative effectiveness of Type I and Type III environmental labels. The relative effectiveness of Type III environmental labels under mandatory and voluntary labeling regimes also were compared. A detailed analysis of consumer reactions to Type I labels was performed by examining the effectiveness of the label across socio-demographic groups. Finally, conjoint analysis was used to elicit consumer preferences for electricity products that vary in terms of their environmental characteristics; this analysis was also differentiated across types of consumers.The results indicate that, in general, Type I environmental labels did not significantly alter consumer choice or ranking of electricity products. In contrast, more detailed Type III environmental labels altered both choice and rankings. Furthermore, the effect of the detailed environmental label was dependent on whether it was a mandatory or voluntary label and on the type of other information available to the individual.
The potential effect of a Type I environmental label varied significantly across individuals with different levels of education or environmental involvement. Further, the effect of the Type I label seems to depend on the type of other information available to the individual. The label did not significantly affect products that were primarily marketed as using high levels of renewable resources; whereas the seal did affect the rankings of low emissions or low price products.
Finally, the results suggest that consumers are willing to pay a premium for electricity services that feature lower ambient air emissions, and that this willingness to pay differs significantly across consumers. In general, consumers seem more concerned with the overall cleanliness of electricity, measured in terms of reduced air emissions, rather than the fuels used in electricity production. Although less important to some, fuel mix does influence the choices of some consumers. Some consumers are willing to pay more for renewable content if it replaces the fossil fuels. These differences in preferences across consumers seem to indicate that electricity choice may not necessarily lead to the demise of fossil-based electricity, especially if technologies are placed in fossil-fueled plants to make their emissions profile comparable to nonfossil fueled plants.
Future Activities:
These experimental data are expected to be used to test the: (1) effect of explanation/education about the certification on respondent rating and intention to purchase; (2) effect of energy efficiency offerings on respondents' ratings and purchase intentions; (3) effect of adding/deleting different items of the label on respondent ratings/purchase intent; and (4) sensitivity of labeling's effect to the degree that product claims align with product attributes.Journal Articles on this Report : 1 Displayed | Download in RIS Format
| Other project views: | All 6 publications | 3 publications in selected types | All 3 journal articles |
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Teisl MF, Roe B, Levy AS. Ecocertification: why it may not be a "field of dreams." American Journal of Agricultural Economics 1999;81(5):1066-1071. |
R826618 (1999) R826618 (Final) |
Exit |
Supplemental Keywords:
experimental economics, public policy, decisionmaking, nonmarket valuation., RFA, Scientific Discipline, Economic, Social, & Behavioral Science Research Program, Economics, decision-making, Economics & Decision Making, Social Science, policy analysis, surveys, belief system, consumer perception, deregulated electrcity products, label design, decision making, economic benefits, environmental certification, economic incentives, socioeconomics, cost/benefit analysis, behavior change, behavior model, environmental labelingProgress and Final Reports:
Original AbstractThe perspectives, information and conclusions conveyed in research project abstracts, progress reports, final reports, journal abstracts and journal publications convey the viewpoints of the principal investigator and may not represent the views and policies of ORD and EPA. Conclusions drawn by the principal investigators have not been reviewed by the Agency.