Transcript The Federal Trade Commission Goes Green

Energy Information for Consumers
By
Dee Pridgen
Federal Trade Commission
 Primary national consumer protection agency
 Founded in 1914; consumer protection mission
launched in 1930’s
 Regulates “unfair and deceptive trade practices”
 History of truth in advertising and comparative
information disclosures, such as Truth in Lending
 Philosophy of providing information rather than price
regulation also guides FTC actions in energy and
environmental sectors
FTC Initiatives on Consumer Info ~
Energy/Environment
 Appliance Labeling Rule, updated in 2007
 R-Value Rule, rating home insulation products
 Fuel Rating Rule (Octane, Alternative Fuels &
Biodiesel)
 Labeling for Alternative Fueled Vehicles
 Fuel Economy Advertising Guides
 Environmental Marketing Guides (currently under
review)
FTC Appliance Labeling Rule
 Provides comparative information to consumers
on energy costs for appliances
 Covers refrigerators, freezers, dishwashers, water
heaters, clothes washers, furnaces, air
conditioners, and fluorescent lamp ballasts
 Aimed at aiding comparison shopping, promoting
market for more energy efficient products
FTC Appliance Label Revisions
 Initially passed in 1979, recently updated pursuant to
mandate of Energy Policy Act of 2005
 FTC consumer research showed that consumers
preferred comparative operating costs as best way to
communicate energy performance in the marketplace
 Revised labels emphasize comparative operating costs,
rather than comparative energy use
FTC R-Value Rule
•Passed in 1979, updated 2005
•Requires R-value labels or fact sheets
for home insulation products
•Applies to manufacturers, installers,
retailers and new home sellers
•Higher R-value equals higher
insulation value; measures resistance
to heat flow
•Purpose to allow consumers to
compare insulation on basis of heatresistance, rather than thickness
alone, which can be misleading
FTC Automotive Fuel Ratings
 1979 – Octane Ratings
 1993 – Ratings expanded to
include Alternative Liquid
Fuels (methanol, ethanol,
liquefied natural gas, and
coal-derived liquid fuels)
 Alternative fueled vehicles
also have labels
 2008 – Ratings expanded
again to include Biomassbased diesel and biodiesel
fuels
FTC Fuel Economy Advertising
Guide
 Fuel economy claims in
ads for new automobiles
trigger certain
disclosures
 Disclosures use EPA
city/hwy estimates
 Standardized
measurement of fuel
economy facilitates
comparison shopping for
vehicles
FTC Guides ~ Environmental
Marketing Claims
 FTC “green guides”
established in 1992
 Combined with stepped
up deceptive advertising
cases
 Cover general principles
and specific claims such
as degradable, recyclable
or recycled, ozone safe
and environmentally
friendly
FTC adjudications on deceptive
environmental ads
 1979 Standard Oil –
misleading fuel emission
reduction claims
 “degradable” plastic
trash bags
 Bunnies disposable
diapers – decompose
“before your child grows
up”?
 “Earth-Smart Laundry
Solution”
21st Century – new emphasis on
energy saving claims
 Cases against Fuel Max &




other gas saving devices
“liquid siding” insulation
Engine additives
Ongoing review of “Green
Guides” to consider
renewable energy,
sustainability, carbon
offset and renewable
energy claims
Updating rule on labels for
light bulbs