Although society loses out when fishermen deplete a fishery, or loggers take more timber than nature replaces, it happens all the time. This is partly because there is no immediate accounting for an action’s future effects. Overfishing provides cheap fish, but that price does not take into account the cost of fewer fish to future generations. On land, the broader societal costs of losing a forest (muddying watercourses, the loss of bio-diversity and contributions to climate change) do not fall directly on the landowner, and therefore will not be priced into his actions.
Devising policies to deal with these negative externalities is difficult, but increasingly, product labeling and branding are proving an effective means of bringing the environmental costs of a product’s production into its marketplace price.
Green labels have to do a number of things: achieve brand recognition, represent some meaningful level of environmental virtue, and attract producers and retailers to use them. Two green labels have proven particularly successful. One is the Forest Stewardship Council’s “FSC†label, which has had a big impact on the way that many major retailers source their wood: fully 10% of the world's harvestable forests are FSC certified. The other is the newer Marine Stewardship Council’s “MSC†label.
The idea of a sustainable fish label all started in 1997, when Unilever, the world’s largest buyer of seafood, and the World Wide Fund for Nature formed the MSC—although it became independent shortly after this. Around the world, catches of commercially important whitefish have been in decline since the mid-1980s, and the company quite reasonably felt that its future fish-finger and cod-fillet businesses relied on a sustainable source of white fish. It said it wanted to source all its fish sustainably by the end of 2005.
Although Unilever only reached about three-quarters of its target before selling off most of its frozen-food business, the MSC has been going from strength to strength. Rupert Howes, the MSC’s chief executive, says that while it took seven years for the first 500 MSC-labeled products to appear, the next 500 took only another nine months.
Today there are 1,123 products with an MSC label around the world. Although consumer recognition remains low today, many wholesale buyers recognize the label, and demand for sustainably sourced fish is growing fast. A big advertising firm has agreed to do pro-bono work to raise public awareness of the logo.
Seven percent of the world’s edible wild-caught fish is now MSC-certified. Although that may sound negligible, it encompasses some important fisheries, and the figure is likely to grow. For some fish, the label is already very important. Forty-two percent of the world’s wild salmon fisheries are going through, or have passed, MSC certification. In 2005 the Alaskan pollock fishery, the biggest whitefish fishery in the world, which lands 1-1.5m tons a year, was certified.
Getting certified as a sustainable producer involves a lot of work and expense, as a third-party accreditation is used for both MSC and FSC labels. This expense is sometimes borne by governments, sometimes green groups and sometimes the producers themselves. Fisheries may volunteer for certification because they find sustainable fish command a premium: 10% for the Hastings Dover sole fishery, and 3% for Pacific cod fisheries.
And the MSC label could be in for a boom. With new commitments to MSC from Sainsbury’s, Tesco and now Wal-Mart (which wants to stock only MSC-certified seafood within five years), the future looks a lot brighter and means the incentives for sustainable fishing will only improve. The risk is the growing number of other labels—such as “organic†and “naturally raisedâ€â€”which confuse customers and allow suppliers to dilute standards to keep costs down. Product labels have been proliferating to such an extent that a website, greenerchoices.org, publishes an online guide to them.
Labels are not the solution to every negative environmental externality. The more of them there are, the greater risk of consumer confusion. But, in the absence of firm governance, good labels do provide an incentive for change.