Conditions of Development of a Product Ecolabel

International audienceSince the early 1990s, national ecolabelling programmes have proliferated worldwide. The European Union (EU) implemented such a regional program in 1991. This decision was part of a broader orientation towards Integrated Product Policy approach in the EU. Since 1991, the development of European ecolabels has been slow and difficult. This paper examines industrial strategies vis-à-vis the EU ecolabel in order to understand the problems faced by the regulator in the development of this ecolabel.The first part of the paper defines and uses the concept of credence good in order to argue that the consumer cannot assess the ecolabel. Based on the examination of the development of the European ecolabel, the second part points out three variables that seem to influence the development of product eco-labels : i) the type of industry (i.e. the degree of heterogeneity between the sets of products sold by the different firms); ii) the threat of direct governmental regulation on the environmental quality of the product; and, iii) the magnitude of the final demand for a green variant of the product. The paper concludes with a discussion of on policy implications for policy makers interested in considering or promoting the use of ecolabels