The Federal Trade Commission issued proposed updates to its Guides for the Use of Environmental Marketing Claims, also known as the "Green Guides," on October 5, 2010. This update, the first since 1998, addresses the use of claims in advertising regarding a product's alleged environmental benefits, including claims regarding carbon offsets and renewable energy.
The Green Guides do not carry the force of law, but failure to follow their principles could result in an enforcement action by the FTC alleging a deceptive trade practice. Some believe the Obama administration has been more aggressive than the Bush administration in this regard, for example by bringing enforcement actions against manufacturers claiming environmental benefits related to the use of bamboo fibers.
With respect to carbon offsets, the FTC proposes only limited guidance because of the ongoing policy debates over greenhouse gas regulation, an area where the FTC concedes it has a limited role. However, under the proposed guidelines, it would be deceptive to represent that a carbon offset represents an emission reduction if the reduction was otherwise required by law. In addition, if emission reductions associated with the carbon offset will not occur for two years or more, the FTC says this delay in actual reductions should be clearly and prominently disclosed.
For renewable energy, the FTC proposes that a product should not be advertised as being "made with renewable energy" unless all or virtually all of the significant manufacturing processes used to make the product were from non-fossil fuel sources. However, the renewable energy could be purchased through either contracts with a renewable energy producer or by purchasing "renewable energy credits," and use of RECs would not need to be disclosed to consumers.
Interested parties may submit comments on the draft guides through December 10, 2010.