Update on the Proposed FTC Green Guides:

Transcription

1 Update on the Proposed FTC Green Guides: Marketing for Renewable Energy and Carbon Offsets Orrin Cook, Green e Marketplace Manager Robin Quarrier, Green e Analyst and Counsel Todd Jones, Green e Climate Senior Analyst November 17 th, 2010 Center for Resource Solutions solutions.org e.org

2 Webinar Outline Background on FTC Green Guides Overview of Proposed Changes Potential Implications for Green e Programs Submission of Comments Q & A

3 Background on FTC Green Guides FTC History Section 5 of FTC Act (15 U.S.C. 45), empowers the FTC to punish deceptive practices Green Guides Started in 1992 Last revision of the Green Guides in Review process initiated in 2007 FTC varies in its level of enforcement interest From the last revision to now corresponds to the development of RE and carbon markets

4 Background on FTC Green Guides FTC Process As part the review process initiated in 2007, the Commission held a series of public workshops where participants highlighted and discussed environmental marketing claims that merit FTC attention. Comments submitted by CRS FTC initiated consumer survey Almost 8,000 U.S. adults Variety of question types perception study.shtml Oct. 6 th issued Request for public comment on proposed Green Green Guide

5 Overview of Proposed Changes General environmental Benefit Claims Compostable Claims Degradable Claims Free-of and Non-Toxic Claims Ozone-Safe and Ozone-Friendly Claims Recyclable Claims Recycled Content Claims Refillable Claims Renewable Materials Claims Source Reduction Claims Renewable Energy Claims Carbon Offsets Certifications and Seals of Approval

6 Overview of Proposed Changes General Proposals From FTC Unqualified claims, such as "eco-friendly, green and environmentally preferable are inherently deceptive Change to: Eco-friendly: made with recycled materials Be able to support all claims

7 Overview of Proposed Changes Use of Your Websites for Clarification of on Product Claims Websites cannot be used to qualify otherwise misleading claims that appear on labels or in other advertisements because consumers likely would not see that information before their purchase. Any disclosures needed to prevent an advertisement from being misleading must be clear and prominent and in close proximity to the claim the marketer is qualifying. Deception Policy Statement, 103 F.T.C. at 174

8 Independent third party Overview of Proposed Changes Certifications & Seals of Approval Endorsement Guides (16 C.F.R. Part 225) Marketer obligated to substantiate all claims

9 Overview of Proposed Changes Certifications & Seals of Approval Unqualified use of an eco seal (one that does not state the basis of certification) = general environmental benefit claim It is highly unlikely that marketers can substantiate such claims, marketers should not use unqualified certifications or seals Prominently convey that seal refers only to specific and limited benefits

10 Overview of Proposed Changes FTC Survey: Renewable Energy

11 Overview of Proposed Changes Renewable Energy Claims Made with renewable energy Must qualify claims virtually all of the processes powered with RE or RECs Clearly and prominently qualify all renewable energy claims by specifying the source of the renewable energy (e.g. wind or solar energy) If a marketer generates RE but sells all RECs, its deceptive to represent or imply that it uses renewable energy. Includes hosting

12 Overview of Proposed Changes FTC Survey: Host Renewable Facility

13 Overview of Proposed Changes FTC Survey: Host Renewable Facility Claiming to host a renewable energy system insufficient to avoid confusion if RECs are sold. REC REC REC $$ $$

14 Overview of Proposed Changes Changes to system host claims I host a renewable energy system. I buy fixed rate electricity. I generate renewable energy that I sell to others. My utility pays me to generate solar electricity for them. I generate 100% renewable energy.

15 Overview of Proposed Changes Green-e Guidance on Hosting

16 Carbon Offsets Overview of Proposed Changes Use accounting methods to ensure against double selling If it was required by law, it s not an emissions reduction Clearly and prominently disclose if the carbon offset represents emission reductions that will not occur for two years or longer

17 Overview of Proposed Changes FTC Enforcement of Green Guides Teeth or no teeth?

18 Potential Implications for Green e Programs: Green e Energy Self-certification and the use of a company s own logo to resemble a certification mark Disclose financial relationships with industry groups. Contractually ensure at a minimum that generators who claim to host a renewable energy system also clearly state that they are selling the RECs.

19 Potential Implications for Green e Programs: Green e Climate Substantiating Claims Tracking: employ competent and reliable scientific and accounting methods to properly quantify claimed emissions reductions and to ensure that they do not sell the same reduction more than one time Timing of Emissions Reductions: disclose if the carbon offset represents emissions reductions that will not occur for two years or longer Substantiating Claims Additionality: deceptive [ ] if the [emissions] reduction, or the activity [ ], was required by law

20 Potential Implications for Green e Programs: Green e Marketplace Importance of 3rd Party Certification Scope of Made with or Manufactured with Qualification of On Product Claims

21 Submission of Comments Summary of Proposed Revisions: Submit comments electronically to FTC by December 10 th : Guides Finalized: Mid-2011?

22 Q & A Robin Quarrier Green e Analyst & Legal Counsel robin@resource solutions.org Todd Jones Senior Analyst, Green e Climate todd@resource solutions.org Orrin Cook Green e Marketplace Manager orrin@resource solutions.org