13.2.1.7 Information instruments

Information instruments – such as public disclosure requirements and awareness/education campaigns – may positively affect environmental quality by allowing consumers to make better-informed choices. When firms or consumers lack the necessary information about the environmental consequences of their actions, they may act inefficiently. While some research indicates an information provision can be an effective environmental policy instrument, we know less about its efficacy in the context of climate change. Examples of information instruments include labelling programmes for consumer products, information disclosure programmes for firms and public awareness campaigns.

Article 6 of the UNFCCC on Education, Training and Public Awareness calls on governments to promote the development and implementation of educational and public awareness programmes, promote public access to information and public participation and promote the training of scientific, technical and managerial personnel. With decision 11/CP.8, the Conference of the Parties (COP) launched a 5-year country-driven work programme to engage stakeholders in information/education activities. The UNFCCC secretariat notes that there is a general lack of resources, limited technical skill and poor regional coordination relating to information and education campaigns (UNFCCC 2006a).

Information instruments can often be used to improve the effectiveness of other instruments. Another feature common to all information instruments that makes them unique from other environmental policies is that they do not impose penalties for environmentally harmful behaviour per se. A disclosure programme, such as the Toxics Release Inventory (TRI), requires only that firms document and report their emissions; it does not place limits on how much pollution they can emit.

Kennedy et al. (1994) demonstrate that environmental externalities can be at least partially corrected through information provision. However, they also point out that when other corrective instruments, such as taxes, are available, these measures are preferable to information policies. Based on a recent theoretical study, Petrtakis et al. (2005) reports that information provision can be more effective than tax instruments, especially when the information can be provided at low cost. Osgood (2002) provides limited empirical support in the context of weather information programmes in Mexico and California.

Evidence-to-date suggests that while disclosure mandates may be effective at changing a firm’s environmental practices, other information instruments, such as advisory programmes, have less effect on consumer behaviour (Konar and Cohen, 1997). Firms whose stock price declined significantly when pollution data became publicly available reduced their emissions more than other firms in the same industry. Firms may view information policies as overly burdensome and argue that voluntarily provided information is sufficient (Sterner, 2003). Certainly, there is a cost to disclosure and labelling policies, and costs depend on the level of information required by a policy (Beierle, 2004). A firm may have to collect and disseminate information they would not otherwise have gathered, and government agencies must be able to verify that the information is accurate.