As consumers become more aware of environmental issues, the demand for green goods and companies grows. Ecolabels and EMS certification programs help by giving consumers the information they need to make environmentally sound purchasing decisions. But they may also create problems, both of principle and of process, at the international level.

The problem of principle is the same as that described earlier for PPMs and applies mostly to ecolabels, since they are often a means for consumers to practice PPM-based discrimination. Most ecolabelling schemes are national programs, developed for domestic economic and environmental realities, and consider domestic environmental preferences. The criteria developed by this process may be irrelevant to the environmental and social priorities of other countries. For example, forest conservation is a priority for some countries—particularly those where regrowth is slow—and consumers may therefore want an ecolabel to be awarded for the recycled content in paper. But this will disqualify paper from other countries where the climate allows for profitable sustainably managed forest plantations, whose product content is 100 per cent virgin pulp.

The problem of process relates to the procedures that foreign producers must follow to get awarded an ecolabel or a certification. Testing procedures may require technologies, infrastructure and expertise that are not available in some countries, particularly in the South. Even if such testing can be done, it will involve much higher costs than those incurred by Northern producers. For example, the technology needed to test for genetically modified organisms in food products is very expensive. The market opportunities offered by an ecolabel that notes a product is GMO free might therefore be more limited in countries without existing testing facilities and in those that depend on low labour and capital costs.

Another process concern relates to setting international standards for certification and developing ecolabels by bodies such as the ISO. Although these efforts are acknowledged as helping make the processes more open, and as fostering mutual recognition of claims among countries, they are also extremely expensive and time-consuming for those delegates involved. This leads to few developing countries being represented. As well, the process frequently lacks transparency. As a result, some fear that international standardizing bodies may be just more fora where Western countries will act strategically to protect their dominant market positions.

5.5 Subsidies