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Monetary Incentives in Green Marketing

Posted 18 August 2011 by admin to Ecolabel News.

Traditionally, the purpose of ecolabels and green marketing in general is to allow consumers to know which products were produced in an environmentally friendly fashion. A small stamp or label will tell you that what you’re buying is made with recycled material or the workers that created it were treated fairly. But the future of ecolabels, according to Jacquelyn Ottman, will be in communicating how much money consumers save by buying sustainable products. Her article touches on the EPA’s new fuel-economy label. This label tells the buyer the estimated fuel costs per year and how much money you save or lose in fuel costs compared to the average car.

Communicating savings is a strategy that is rare in the realm of ecolabels, as most environmentally friendly products cost extra. The automobile sector is a logical start for cost savings in green marketing as it is one of the primary places families allocate money, aside from their home. And it is also an area with added costs (fuel, maintenance) after your purchase, where future savings are applicable.

Aside from appliance ecolabels like Energy Star and the sustainable building developments sector, there are few products that can offer future savings once the consumer pays a premium for sustainable production. Nevertheless, communicating savings could be the key to widespread ecolabel use in a few key sectors. Many consumers are oblivious to the environmental footprint of products they buy. But if a relatively large and explicit label (like EPA’s fuel-economy label) told consumers they would be saving money down the road, those products would likely increase in popularity.

Providing monetary incentives to go green is one of the strongest ways to encourage businesses to produce their goods sustainably.  Relying on environmental sympathies alone is not going to produce widespread change in consumption patterns, but if sustainability can be equated with savings and clearly communicated, a bright future for the success of sustainable businesses is in store.