Template-Type: ReDIF-Paper 1.0
Title: The Effectiveness of Carbon Labels
Author-Name: Anna Schulze-Tilling
Author-Email: anna.schulzetilling@gmail.com

Classification-JEL: D12, C91, C93, Q18
Keywords: carbon footprint, food consumption, welfare, behavioral intervention, field experiment

Abstract: Carbon labels have been shown to reduce the carbon footprint of consumption choices in several
contexts. But are they also an effective policy tool? This depends on how the reductions produced by
carbon labels relate to what can be achieved with the alternative policy tools we have available. This
paper establishes a comparison to carbon taxes, using several field experiments in the student canteen.
I estimate that carbon labels reduce carbon emissions by approx. 4%, and that a carbon tax of €120 per
ton would be needed to achieve similar reductions with price changes alone. This comparison conveys
that carbon labels are relatively effective: €120 per ton exceeds current EU ETS trading prices by more
than 150% and is three times the current German carbon tax on gasoline. Furthermore, I provide evidence
that the main reason carbon labels are effective is not that they are able to correct consumers’
misperceptions about carbon footprints. Instead, they appear to primarily influence consumers by directing
attention towards carbon emissions at the moment of choice.

Note: 
Length: 114
Creation-Date: 2025-01
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp639
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2025_639