[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
   IT'S TOO EASY BEING GREEN: DEFINING FAIR GREEN MARKETING PRACTICES

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON COMMERCE, TRADE,
                        AND CONSUMER PROTECTION

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 9, 2009

                               __________

                           Serial No. 111-45


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                 HENRY A. WAXMAN, California, Chairman

JOHN D. DINGELL, Michigan            JOE BARTON, Texas
  Chairman Emeritus                    Ranking Member
EDWARD J. MARKEY, Massachusetts      RALPH M. HALL, Texas
RICK BOUCHER, Virginia               FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York             ROY BLUNT, Missouri
GENE GREEN, Texas                    STEVE BUYER, Indiana
DIANA DeGETTE, Colorado              GEORGE RADANOVICH, California
  Vice Chairman                      JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California               MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania       GREG WALDEN, Oregon
JANE HARMAN, California              LEE TERRY, Nebraska
TOM ALLEN, Maine                     MIKE ROGERS, Michigan
JANICE D. SCHAKOWSKY, Illinois       SUE WILKINS MYRICK, North Carolina
CHARLES A. GONZALEZ, Texas           JOHN SULLIVAN, Oklahoma
JAY INSLEE, Washington               TIM MURPHY, Pennsylvania
TAMMY BALDWIN, Wisconsin             MICHAEL C. BURGESS, Texas
MIKE ROSS, Arkansas                  MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York          PHIL GINGREY, Georgia
JIM MATHESON, Utah                   STEVE SCALISE, Louisiana
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA CHRISTENSEN, Virgin Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont

                                  (ii)
        Subcommittee on Commerce, Trade, and Consumer Protection

                        BOBBY L. RUSH, Illinois
                                  Chairman
JAN SCHAKOWSKY, Illinois             CLIFF STEARNS, Florida
    Vice Chair                            Ranking Member
JOHN SARBANES, Maryland              RALPH M. HALL, Texas
BETTY SUTTON, Ohio                   DENNIS HASTERT, Illinois
FRANK PALLONE, New Jersey            ED WHITFIELD, Kentucky
BART GORDON, Tennessee               CHARLES W. ``CHIP'' PICKERING, 
BART STUPAK, Michigan                    Mississippi
GENE GREEN, Texas                    GEORGE RADANOVICH, California
CHARLES A. GONZALEZ, Texas           JOSEPH R. PITTS, Pennsylvania
ANTHONY D. WEINER, New York          MARY BONO MACK, California
JIM MATHESON, Utah                   LEE TERRY, Nebraska
G.K. BUTTERFIELD, North Carolina     MIKE ROGERS, Michigan
JOHN BARROW, Georgia                 SUE WILKINS MYRICK, North Carolina
DORIS O. MATSUI, California          MICHAEL C. BURGESS, Texas
KATHY CASTOR, Florida
ZACHARY T. SPACE, Ohio
BRUCE BRALEY, Iowa
DIANA DeGETTE, Colorado
JOHN D. DINGELL, Michigan (ex 
    officio)
  


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     1
Hon. George Radanovich, a Representative in Congress from the 
  State of California, opening statement.........................     3
Hon. John P. Sarbanes, a Representative in Congress from the 
  State of Maryland, opening statement...........................     4
Hon. Phil Gingrey, a Representative in Congress from the State of 
  Georgia, opening statement.....................................     5
Hon. Kathy Castor, a Representative in Congress from the State of 
  Florida, opening statement.....................................     6

                               Witnesses

James Kohm, Director, Enforcement Division, Federal Trade 
  Commission.....................................................     7
    Prepared statement...........................................    10
M. Scot Case, Vice President, Terrachoice, and Executive 
  Director, Ecologo Program......................................    21
    Prepared statement...........................................    23
    Answers to submitted questions...............................   106
Dara O'Rourke, Associate Professor, University of California, 
  Berkeley, and Cofounder, Goodguide.............................    49
    Prepared statement...........................................    52
    Answers to submitted questions...............................   109
Scott P. Cooper, Vice President, Government Relations, American 
  National Standards Institute...................................    64
    Prepared statement...........................................    67
Urvashi Rangan, Ph.D., Director, Technical Policy, Consumers 
  Union..........................................................    84
    Prepared statement...........................................    87
    Answers to submitted questions \1\...........................   111

----------
\1\ Ms. Rangan did not respond to submitted questions for the 
  record.


   IT'S TOO EASY BEING GREEN: DEFINING FAIR GREEN MARKETING PRACTICES

                              ----------                              


                         TUESDAY, JUNE 9, 2009

              House of Representatives,    
           Subcommittee on Commerce, Trade,
                           and Consumer Protection,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 11:01 a.m., in 
Room 2123 of the Rayburn House Office Building, Hon. Bobby L. 
Rush [chairman of the subcommittee] presiding.
    Members present: Representatives Rush, Sarbanes, Stupak, 
Barrow, Castor, Radanovich, and Gingrey.
    Staff present: Michelle Ash, Chief Counsel; Anna Laitin, 
Counsel; Angelle Kwemo, Counsel; Tim Robinson, Counsel; Valerie 
Baron, Special Assistant; William Cusey, Special Assistant; 
Jennifer Berenholz, Deputy Clerk; Chad Grant, Minority Policy 
Analyst; Brian McCollough, Minority Senior Professional Staff; 
and Gerald Couri, Minority Professional Staff.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. Good morning. The subcommittee on Commerce, 
Trade, and Consumer Protection will come to order. The chair 
will thank all those who are here and particularly all 
witnesses. The chair now recognizes himself for the purposes of 
an opening statement.
    Today the subcommittee is holding a hearing titled ``It's 
Too Easy Being Green: Defining Fair Green Marketing Practice.''
    Let me start--the mikes are on. They are all working now, 
right? OK, let me--the chair recognizes himself for five 
minutes for the purposes of opening statement.
    The subcommittee on Commerce, Trade, and Consumer 
Protection is holding a hearing titled ``It's Too Easy Being 
Green: Defining Fair Green Marketing Practices.'' During this 
hearing, we will be taking up the truthfulness of green 
advertising claims, consumer protection of green claims, and 
the role of the Federal Trade Commission in regulating these 
proliferating claims.
    More than ever before, the shelves of our supermarkets, 
hardware, minimarts, home improvement, and pet stores are being 
lined with good bearing labels calling themselves as natural, 
biodegradable, ecofriendly, sustainable, recyclable, and 
nontoxic just to name a few. With the increased demand by these 
stores for more green products, we are seeing an increase in 
certifying companies certifying these green claims. While some 
responsible companies have created certifications and labels 
backed by testing, other companies have spied an opportunity in 
demand for information.
    For a fee, these companies will certify anything as green, 
affording false comfort to purchasers that their products meet 
environmental and safety standards.
    Just to cite a few relevant statistics, in 2008, consumers 
purchased $290 million in natural household cleaners and 
supplies. In addition, ``The Wall Street Journal'' reported in 
April 2009 that there are more than 300 such environmental 
labels putting a green stamp on everything from cosmetics and 
seafood to coffee. Because there are no common agreement on 
jury accepted definitions relating to the meaning of many of 
these words. And since consumers are being bombarded by so many 
of these claims and certifications, and there is legitimate 
concern that some consumers are basing their purchasing 
decisions on misleading and in some cases even deceptive 
labels.
    And I am especially concerned that Americans who have less 
disposable income to spend on ``green'' goods are not getting 
the benefits that they expect when they spend their hard-earned 
dollars on these goods, which promise more and also cost more 
at our checkout lines.
    At the conclusion of today's hearing, I would like for this 
body to have more insight into FTC's update of its green guides 
and how extensively consumers, manufacturers, and advertisers 
are consulting and relying on these guides.
    Second, I want for us to discuss whether the FTC should be 
more aggressive in monitoring and/or regulating the placement 
of claims on products and how, in the flow of commerce, can the 
Commission ensure that green labels are more useful and 
informative than is currently the case.
    Thirdly, I would like for us to explore the role of the 
private sector. We will ask how truly environmentally 
responsible and safe products can differentiate themselves from 
the products that may unsubstantiated claims. And we will 
examine the role of the private run certification at labeling 
products.
    I would also just add another note that there might be 
another role for the Congress to play in these matters, and we 
will be keeping a keen eye and a hearing ear to the role that 
the Congress should be playing in this particular matter.
    I look forward to hearing the testimony and to 
participating in the exchange that follows. I want to thank you 
all very much for agreeing to help us examine this problem and 
come up with constructive proposals to address issues that we 
have identified. I yield back the balance of my--I don't have 
any more time. So now it is my pleasure to recognize the 
ranking member of the subcommittee for five minutes for the 
purposes of an opening statement, my friend, the gentleman from 
California, Mr. Radanovich, is recognized.

 OPENING STATEMENT OF HON. GEORGE RADANOVICH, A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Radanovich. Thank you so much, Mr. Chairman. I want to 
thank you also for calling this hearing to examine green 
marketing practices. We all agree that consumers should not be 
deceived through false marketing when making a decision to buy 
a product. Such dubious practices would fall squarely within 
the Federal Trade Commission's jurisdiction when a company 
violates existing labeling rules or when a company clearly 
makes a false statement about its product with the intent to 
deceive.
    I understand the Commission has taken several enforcement 
actions against companies for such practices, and they should 
be commended. And I look forward to hearing more about these 
when Mr. Kohm testifies shortly.
    I agree with the premise that a business that markets its 
products as green should be held accountable for accuracy and 
truthfulness. The problem arises from a larger debate about 
what is green and who will define it and how will it be 
defined. Consumer confusion does not help anybody, but a simple 
solution does not readily exist that all stakeholders can agree 
upon, which is why we are having this debate.
    I imagine we could ask 10 different people to define green, 
and we would not be surprised if we received 10 different 
answers. Many consumers seek out recyclable or biodegradable 
products, and these products may be labeled accurately and be 
attractive to consumers for their environmental sensitivity. 
However, depending on how we define green, a recyclable product 
could be considered greener than a biodegradable one or vice 
versa, and that is a relatively simple example of similar 
products.
    When multiple variables are considered in the 
determination, the comparison of the products becomes more 
complicated. Regardless, some of the discussions and 
suggestions that we will hear today will focus on the 
Environmental Protection Agency.
    For purposes of this hearing, we would be better served 
confining our discussion to the area of our jurisdiction over 
the marketing practices and what would be defined as an unfair 
or deceptive practice under the FTC Act. I would also suggest 
the subcommittee should hear the views of businesses that are 
manufacturing products that may fall subject to FTC 
enforcement.
    Ideally, mutually agreeable definitions for the purposes of 
marketing will emerge through a process of all stakeholders 
working together. This may not result in a one-size-fits-all 
approach, but it will have the benefit of an open and 
transparent process where everybody has a voice and all 
viewpoints are considered.
    The marketplace implicated by this discussion is extremely 
broad with many diverse products. If the goal is to enforce 
manufacturing practices and leave a smaller footprint on the 
earth through consumer marketing appeal, the definition of 
green must be inclusive. Labeling and marketing are intended to 
be tools that educate the public, not points of litigation. And 
more importantly, they should not be the goal of the given 
product.
    Further, we have seen many unforeseen consequences of 
technological advances that were supposed to help reduce 
environmental footprint but had the opposite effect due to 
unwitting consumers. Energy efficiency and the Energy Star 
label may be useful, but not only to the extent that they alter 
the overall consumption of home energy use.
    Saving more energy on one product may be beneficial, but if 
the savings is used to keep the television and stereo on 
longer, the environmental picture hasn't really changed. 
Ultimately, the consumer's use of the information is what 
really matters.
    I only point this out because consumers are hard to 
predict. We continue to battle obesity in this country despite 
extensive labeling requirements for decades. Labels can be a 
useful tool for information if the consumer uses it wisely and 
is not inundated with information overload. Foods may be 
accurately labeled as low sugar, low carbohydrate, or low fat, 
but that does not change the overall trend of increase in the 
average calories Americans consume.
    One final point I will make which is I am certain experts 
have discussed is that any green standard should take into 
account the diverse geography of resources of this country. For 
example, if new green standards delve into the life cycle 
carbon footprint of a product, manufacturers should not be 
disadvantaged based on the limitations of available energy 
resources to which they may be captive. To do so based on 
today's desires will cause more harm than good.
    Mr. Chairman, I want to thank you and also our witnesses 
today for appearing. I look forward to your testimony, and I 
yield back. Thank you, Mr. Chairman.
    Mr. Rush. The chair thanks the gentleman. The chair now 
recognizes the gentleman from Maryland for five minutes for the 
purposes of an opening statement. Mr. Sarbanes of Maryland is 
recognized.

OPENING STATEMENT OF HON. JOHN P. SARBANES, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MARYLAND

    Mr. Sarbanes. Thank you, Mr. Chairman. I won't take five 
minutes. I appreciate your convening this hearing. This is 
definitely something we need to look at. This is kind of the 
next big thing when it comes to labeling, I think. And the role 
of this committee and the FTC and others to put in place a 
regime that makes sense with respect to green labeling is a 
very, very important one.
    There is no question when you go to the store--I fall prey 
to this myself--and you see this green labeling or these green 
claims that are made that you are either thinking green is 
healthy or you are thinking green is environmentally friendly. 
You are basically in the mindset that green is good, and so it 
does have a very powerful effect on people's purchasing 
patterns and their expectation of what they are getting for 
themselves and their family.
    So the notion that that claim is being made in many 
instances when it can't really be justified if when I think it 
is offensive to many and certainly to the consumer that is 
looking for that seal of good housekeeping when it comes to 
what is environmentally friendly and what is healthy.
    I don't worry too much about the question of what is 
greener than the next thing as long as the things that are 
claiming to be green have met a certain baseline standard and 
definition. And I certainly recognize it is going to come up 
with those definitions that can have some sort of uniform 
application. But I think we can find our way to it, and our 
panelists today will help us think that through.
    The other point you made is just as important, and that is 
it is not fair to those businesses and manufacturers and others 
who really are trying to do the right thing and make products 
that are green in all their different aspects to have a system 
that is allowing others to make false claims with respect to 
whether they are delivering green products.
    And the more sinister view to take on that is it actually 
discourages companies from doing the right thing because they 
say well, what difference does it make? If I can just slap a 
green label on something and get the benefit of that in terms 
of marketing, why not cut corners?
    So there are many reasons to pursue this on behalf of the 
consumer and on behalf of businesses that are trying to lead 
the way with good practices, and thank you for convening the 
hearing today to look at those practices. And I yield back my 
time.
    Mr. Rush. The chair thanks the gentleman. The chair now 
recognizes for the purposes of opening statements Dr. Gingrey 
from Georgia. Dr. Gingrey, you are recognized for five minutes.

  OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Gingrey. Mr. Chairman, thank you. I am sitting here 
drinking this soft drink out of a green can. This is by the 
great Coca-Cola Company, and they don't imply anything in here 
about being environmentally friendly. They just tell you how 
much caffeine and what great soft drink this is, and it is a 
good soft drink. But certainly you get the impression you could 
package something in a green--even politicians--I notice in the 
last campaign cycle in our state more and more politicians 
actually wearing a green shirt and having a green logo and, you 
know, just that subliminal message.
    Mr. Chairman, I want to thank you, of course, for calling 
the hearing today on green marketing techniques that are 
clearly being used now more than ever by all types of companies 
and individuals. Unfortunately despite the increased efforts by 
corporate citizens attempting to be more environmentally 
friendly, there is still a great deal of confusion that exists 
particularly for the consumer with the way that these marketing 
practices currently function.
    The FTC issued its own set of environmental guides back in 
1992 called ``The Green Guides'' and this working document 
allows the FTC to better understand what constitutes false or 
deceptive green claims within marketing. However although these 
guides provide a base of understanding for the FTC, ``The Green 
Guides'' have not been fully updated since when, 1998, and so 
that leaves a wide gap between the increase in green marketing 
and the way by which we understand these techniques today.
    Mr. Chairman, there are some fundamental questions that we 
must answer at the outset of any discussion of green marketing. 
First and foremost, how is this marketing defined? As this 
panel of witnesses will describe, there are varied 
interpretations of how a company uses these marketing tools. Is 
green marketing an environmental matter or is it a health 
matter? It could be argued that individual consumers may have 
different ideas of what green means for them, so this needs to 
be factored into any discussion that is had by the FTC as it 
updates these green guides.
    The last question, and arguably the most important for this 
subcommittee, is what role the FTC should play in the structure 
or enforcement of green marketing. The FTC already has the 
authority to conduct investigations on false and deceptive 
marketing practices, and this should be taken into 
consideration as regulations continue to be updated.
    Mr. Chairman, with the increase in green marketing that has 
occurred, there are still a number of question marks that exist 
both for companies and for consumers. And I think in this 
realm, Jim Henson's lovable character Kermit the Frog may have 
said it best when he said ``it's not easy being green.''
    I look forward to hearing from our panel on these 
increasingly omnipresent issues, and I yield back the balance 
of my time.
    Mr. Rush. The chair thanks the gentleman. The chair now 
recognizes the gentlelady from Florida, Ms. Castor, for five 
minutes for the purposes of opening statement.

  OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Ms. Castor. Thank you, Mr. Chairman. Thank you very much 
for calling this hearing. Good morning. In recent years, we 
have had a substantial increase in products that promote 
environmental consciousness and tout how their products 
minimize environmental impacts. There is an increasing public 
awareness of the dangers of climate change and environmental 
degradation, and Americans want to help naturally.
    And one of the places folks look to reduce their 
environmental impact is at the store. The last few years have 
seen a proliferation of new products marketed as being green or 
environmentally friendly. And frankly this can be confusing for 
consumers. Consumers have a hard time telling the difference 
between companies that do the hard work to develop products and 
manufacturing processes that are more sustainable and 
environmentally friendly and those companies that simply start 
printing their labels in green with sustainable written on the 
label and then charge a green premium for the same old dirty 
products.
    It seems sometimes that some retailers and product 
suppliers are engaged in a race to poorly define and use 
meaningless terms like sustainable and ecofriendly. And with 
that, there is a real risk that consumers will lose confidence 
in the entire concept of being--having a sustainable product or 
a green friendly product and that consumers will simply tune 
out the environmental message. A study by the Shelton Group 
found that consumers surveyed in 2007 were between 22 and 55 
percent less likely to buy a wide range of green products than 
in 2006, and a major factor in that decline was message 
overload.
    Consumer groups have done an admirable job of stepping up 
to try to provide clarity by operating independent claims 
verification and marketing standards groups, and I look forward 
to hearing from some of those groups who are with us today. 
However, they still must compete with unreliable and 
unscrupulous certifications programs that are all too often 
concerned more with collecting the fee than in reliably 
labeling the product.
    I am very interested in what more we can do to help 
consumers cut through the noise and find the truly sustainable 
products that they would like to purchase. I yield back my 
time.
    Mr. Rush. The chair thanks the gentlelady, and now it is my 
honor and privilege to welcome the witnesses who are gathered 
here, and I do want to recognize each one of them. I want to 
announce that Dr. Rangan is on her way. She had a late flight 
from New York, and now she is between the airport and the 
Capitol in a cab trying to make it here. So we will swear her 
in once she arrives.
    And we will proceed now, recognizing our first witness. He 
is Mr. James Kohm. He is the director of the enforcement 
division of the Federal Trade Commission. Next to Mr. Kohm is 
Mr. M. Scot Case. He is the vice president of a company called 
TerraChoice, and he is also the executive director of the 
EcoLogo Program which is the Canadian government's green seal. 
And next to Mr. Case would be Mr. Dara O'Rourke. Dr. O'Rourke 
rather is an associate professor who comes from California, the 
University of California in Berkeley. And he is a cofounder of 
GoodGuide. And next to Mr. O'Rourke, we have Mr. Scott P. 
Cooper who is the vice president of government relations of the 
American National Standards Institute.
     I again want to welcome each and every one of you 
witnesses. You don't know how it makes our heart glad that you 
are taking the time out from your busy schedules to come and 
participate with us today, and it is the practice of this 
subcommittee--we are operating under some new practices--that 
we swear you in. So I would ask if each one of you would stand 
and raise your right hand.
    [Witnesses sworn]
    Mr. Rush. Let the record reflect that all witnesses have 
responded in the affirmative.
    Now, our first witness we will recognize for five minutes 
for the purpose of opening statement is Dr. James Kohm. Dr. 
Kohm, would you please again restrict your comments your four 
minutes--five minutes rather or thereabouts.

   TESTIMONY OF JAMES KOHM, DIRECTOR, ENFORCEMENT DIVISION, 
    FEDERAL TRADE COMMISSION; M. SCOT CASE, VICE PRESIDENT, 
  TERRACHOICE, AND EXECUTIVE DIRECTOR, ECOLOGO PROGRAM; DARA 
   O'ROURKE, ASSOCIATE PROFESSOR, UNIVERSITY OF CALIFORNIA, 
   BERKELEY, AND COFOUNDER, GOODGUIDE; SCOTT P. COOPER, VICE 
 PRESIDENT, GOVERNMENT RELATIONS, AMERICAN NATIONAL STANDARDS 
   INSTITUTE; AND URVASHI RANGAN, PH.D., DIRECTOR, TECHNICAL 
                    POLICY, CONSUMERS UNION

                    TESTIMONY OF JAMES KOHM

    Mr. Kohm. Thank you very much, Mr. Chairman. Mr. Chairman, 
Ranking Member Radanovich, and members of the committee, my 
name is James Kohm. I am the associate director of the division 
of enforcement in the Federal Trade Commission's Bureau of 
Consumer Protection.
    Let me begin by noting that the views expressed in the 
written testimony represent those of the commission, while 
those in my oral testimony and answers to your questions 
reflect only my own views and not necessarily those of the 
commission or any particular commissioner.
    I appreciate the opportunity today to discuss the FTC's 
role in the environmental marketing arena. The commission, as 
you know, does not set environmental policy or standards. That, 
however, is not to say that the commission does not have a 
significant role to play in the marketing of environmentally 
friendly and energy efficient products.
    Specifically the FTC polices the marketplace to help ensure 
that consumers are not harmed by deceptive claims and that 
honest marketers' advertising is not drowned out by the false 
claims of their competitors. To achieve this goal, the 
commission employs a three-pronged strategy. First, we help 
businesses comply with the law. To accomplish this goal, the 
commission has developed its green guides that explain how 
consumers understand commonly used environmental claims such as 
recyclable and biodegradable and describe the basic elements 
needed to substantiate those claims.
    The commission is currently reviewing its green guides to 
ensure that they remain responsive in today's marketplace. This 
is especially important given the explosion of green marketing 
in recent years and the prevalence of claims that were not 
common when the commission last reviewed the guides more than a 
decade ago.
    To help develop a robust record upon which to base its 
guidance, the commission solicited public comment and held a 
series of public workshops on emerging green marketing issues. 
While we received a lot of useful information in response, 
unfortunately we obtained little evidence of how consumers 
understand certain claims.
    The commission therefore is in the process of developing 
its own research to help it provide accurate, informed advice. 
Second, it is critical to complement rules and business 
guidance with a solid law enforcement presence. The 
commission's recent cases in this area have challenged, for 
example, home insulation sellers who vastly overstated the 
insulating properties of their products, businesses that 
falsely claim that their devices would dramatically improve 
your car's gas mileage, and companies making false claims about 
the green attributes of their products.
    Of particular note, the commission today announced the 
reinforcement actions against companies that advertise their 
products as biodegradable. The green guides advised marketers 
that consumers understand unqualified biodegradable claims to 
mean that a product will break down into the elements found in 
nature within a reasonably short time after customary disposal. 
All three defendants could not substantiate this fact.
    Consumers typically throw products like those challenged in 
these cases into the trash, which is in turn disposed of in 
places like landfills that do not present conditions under 
which products can biodegrade quickly even if they could do so 
under ideal conditions.
    Finally the FTC employs a wide array of innovative consumer 
education materials to help consumers make informed green 
purchasing decisions and avoid energy saving scams. For 
example, our interactive Web site, Saving Starts at Home, 
offers tips to help consumers conserve energy and save money in 
almost every room of their homes.
    In the virtual kitchen, for example, consumers can learn 
about how to use our energy guide label to select energy 
efficient appliances. In the attic, they can find tips on 
choosing insulation, and in the trash room, they can encounter 
explanations of terms like recyclable and biodegradable and the 
meaning of common environmental symbols.
    Continued consumer interest in conserving energy and 
protecting the environment will no doubt result in continued 
environmental marketing. The FTC therefore will continue its 
efforts to ensure the truthfulness and accuracy of these green 
claims.
    Thank you for providing the commission an opportunity today 
to appear before the committee and describe our work. I will be 
happy to answer any of our questions. Thank you.
    [The prepared statement of Mr. Kohm follows:]

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    Mr. Rush. Mr. Kohm. And now the chair recognizes Mr. M. 
Scot Case for the purposes of opening statement. Mr. Case, 
would you please restrict your comments to five minutes or 
thereabouts?

                   TESTIMONY OF M. SCOT CASE

    Mr. Case. Chairman Rush and members of the subcommittee, 
thank you for inviting me to share my perspective. My name is 
Scot Case. I am a vice president of TerraChoice and executive 
director of the EcoLogo Program, a 21-year-old environmental 
standards setting and certification program.
    For 16 years, I have been working in various capacities to 
make it easier for consumers, retailers, and professional 
purchasers to buy more environmentally preferable or green 
products. Despite lengthy experience in the field, I am also a 
recent victim of green consumer fraud.
    In 2007, I bought a $2,500 LG Electronics manufactured 
refrigerator because it claimed to be Energy Star compliant. 
After consumer reports published a September 2008 story, I 
learned my refrigerator actually uses twice as much electricity 
as advertised. It does not even come close to meeting the 
Energy Star criteria.
    LG Electronics' misuse of the Energy Star label highlights 
well-known weaknesses in DOE's management of the Energy Star 
program. More importantly, the fraudulent use of the Energy 
Star label provides an example of a broader issue with the ways 
in which green products sold in this country are routinely 
marketed with partial truths, misleading and irrelevant 
information and the occasional blatant lie. FTC has been unable 
to adequate protect U.S. consumers from this misinformation.
    U.S. consumers are one of the most powerful forces on the 
planet. Their spending power can drive environmental 
innovation, create green jobs, and expand the green economy. 
This market-based environmentalism, however, is dependent on 
consumers having accurate, reliable, and relevant information 
about the products they buy. U.S. consumers want to buy greener 
products, but they are confused by competing environmental 
claims, unsure when a claim is accurate, and increasingly 
skeptical of all environmental claims.
    The current system is not working. Green washing is 
rampant. FTC is not equipped to find green, and United States 
lacks a single unifying label to make buying green easy.
    LG Electronics' misuse of the Energy Star label is an 
extreme example of green washing. Green washing ranges from 
blatant misrepresentation to telling only partial truths about 
a product's environmental impacts. According to the sins of 
green washing, more than 98 percent of products making 
environmental claims make at least one questionable claim.
    Manufacturers are making misleading claims because they 
lack clear guidance about what claims are legitimate and what 
kind of evidence they need to support their claims. As a 
result, U.S. consumers are spending their money to buy 
environmental benefits that might not exist.
    FTC recognizes the problem. It has been working diligently 
to improve its environmental marketing guide, which was last 
revised in late 1998 or '99. I was able to provide my insights 
into their process. I remain very hopeful that FTC's revised 
guide combined with the necessary funding to support 
enforcements will help reduce green washing.
    While incredibly beneficial, I think FTC's actions are only 
part of the solution. FTC lacks the relevant environmental 
expertise to address the most fundamental question: how does 
one identify an environmentally preferable product. This 
question is being addressed by a variety of EPA departments 
with narrowly focused attention on single environmental issues.
    One part of EPA focuses on energy efficient products. 
Another focuses on less hazardous products. Another looks at 
water efficient products. EPA's silo-based approach is 
understandable, given the agency's organization. With the 
exception of the environmentally preferable purchasing program 
that focuses narrowly on federal government purchasing, no one 
at EPA is looking holistically at the issue. As a result, it 
appears almost every manufacturer is finding an excuse to claim 
their product is green.
    Environmental labels like Energy Star, EcoLogo and Green 
Seal are supposed to make it easier to identify more 
environmentally preferable products, but there are now hundreds 
of labels and claims being made.
    According to the seven sins of green washing, 22 percent of 
products making environmental claims include a certification-
like label that has no apparent meaning. As the title of this 
hearing suggests, it is too easy being green. Some enterprising 
companies sell a green certification for a fee. They proudly 
advertise that they can certify a green product or business 
without reviewing the product, without visiting the business, 
and without requiring any testing. All one has to do is pay as 
little as $150, credit cards accepted.
    How is my mom in Charlotte, North Carolina supposed to keep 
track of hundreds of environmental labels to know which ones 
are meaningful? I have 16 years of experience with this issue, 
and I regularly run into claims that I have never seen before.
    To address these challenges, I recommend the following 
three items: direct FTC to require every environmental claim to 
be supported by publicly available proof, provide research 
money for EPA and the national academies to conduct the basic 
research, and establish an EPA office to launch a voluntary, 
non-regulatory environmental leadership label.
    Launching a single label would provide benefits similar to 
the way the USDA organic label united multiple organic 
standards. Having a single label will make it significantly 
easier for my mom to identify greener products, the same way 
Energy Star made it easier to identify more energy efficient 
products.
    In conclusion, market-based environmentalism only works if 
manufacturers and consumers have the tools to make intelligent 
decisions. I encourage the subcommittee to direct or endorse 
the developments of the necessary tools. Thank you.
    [The prepared statement of Mr. Case follows:]

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    Mr. Rush. The chair thanks the gentleman. Now it is my 
pleasure to recognize Dr. Dara O'Rourke for five minutes for 
the purposes of opening statement.

                   TESTIMONY OF DARA O'ROURKE

    Mr. O'Rourke. Chairman Rush, members of the committee, 
thank you very much for the opportunity to testify this morning 
on green marketing claims and the very important underlying 
issues of public access to accurate information on the health 
and environmental impacts of consumers products.
    My name is Dara O'Rourke. I am a professor at the 
University of California, Berkeley, and also the cofounder of a 
for-benefit company call Good Guide, which I am here today 
representing.
    My research focuses on global supply chains and better ways 
to monitor and measure the impacts of those supply chains to 
deliver information to consumers here in the U.S. on the full 
environmental, social, and health impacts on the products we 
consume. We have founded our research, and the reason I am here 
today is that our current system of information available to 
the public is incomplete at best and actually confusing or 
deceptive at worst.
    The public either has little information on critical 
aspects of product choices such as ingredients within household 
chemicals, fragrances, electronics, or they have questionable 
information such as green claims about a product being natural 
or ecofriendly as the chairman mentioned.
    For markets to function efficiently, we need good 
information and low transaction costs of accessing that 
information. Today we have the exact opposite. We have very 
poor information and very high costs for the public to access 
that information. I want to make three very simple points 
today. First is the public wants to know this information. They 
are seeking this out. They want to know it.
    The second is there is a huge gap between what the public 
wants to know and what they can currently access. That leads 
to, I think, a number of problems which other people have 
spoken about, which I will talk about one case. And the third 
is I think there is a current opportunity right now for this 
committee and the FTC to make a significant step forward in 
improving transparency and consumer markets and improving 
market functioning through a couple simple steps.
    From our research, we have found out first that consumers 
do want to know this information. Very rapid growth in concern 
among the public about what they are putting in, on, and around 
their families and themselves. This is driven partly by a 
stream on continuous scandals, quite frankly. Lead in toys, 
melamine in baby formula, salmonella in peanuts, almost one a 
week that we are seeing now and the press showing up, leading 
consumers to ask where are our products made, how are they 
made, under what conditions, and what are the impacts for our 
health and the environment.
    A number of national surveys, which are in my written 
testimony, discussed even in this economic climate, we are 
seeing increased demand among the public to buy greener, 
healthier products even among a very broad spectrum of consumer 
population. Wal-Mart released a study of their consumers 
showing 57 percent of Wal-Mart customers concerned about the 
environment, wanting to make environmentally friendly 
purchases. This is not a left/right, Democrat/Republican, high-
income/low-income issue. This is across the board. Parents in 
the U.S. want to find safe, healthy products.
    At the same time as Mr. Case has mentions, there is a very 
fast growth in production claims, which I think are quite 
questionable and consumer marketing, which is quite 
questionably going up against these demands for the public to 
know.
    The public wants to know if products are safe and healthy. 
They want simple advice on choosing products to bring into 
their homes. They also want to know detailed information as 
their education level grows about ingredients of concern, 
carbon, other issues that they are increasingly concerned 
about.
    In our research, we found health impacts to Congresswoman 
Castor's point. Health is the number one issue of concern among 
our users and our research. That relates to potential cancer 
risks, other long-term health hazards, and nutritional impacts 
of food products. They also are concerned about environmental 
impacts again related primarily to their health and their 
family's health. Toxics, releases, hazardous waste, and even 
climate change often comes back for consumers to a personal or 
the health of their grandchildren and their family.
    Despite these demands for this kind of information, more 
and more consumers wanting this information, almost impossible 
for consumers to get this information, even with dozens of 
hours of research online and completely impossible in stores as 
they look at products and look at the product claims.
    Let me just talk about one example which Chairman Rush 
mentioned: the growth in green cleaners and the demand for 
green cleaning products in the U.S. These are quite harsh 
chemicals that we bring into our house every day that are on 
our floor, that are on our plates, that are in the air around 
our families. Consumers want to know whether these products are 
safe and healthy. With the rapid growth in these products, 
there has also been a rapid growth in claims around these 
products, that they are safe for kids, pets, the environment, 
they are nontoxic, they are natural, they are biodegradable.
    And at the same time, almost none of these companies 
disclose the ingredients in these products. They make claims 
without disclosing what is actually in them. So a claim like 
plant-based or natural is meaningless unless we know the actual 
ingredients, the actual chemicals derived from plants or other 
natural sources or petroleum to know what is in them
    Over and over, we see in our research personal care 
products, again words like fragrance from essential oils sound 
environmental, sounds natural, but we don't know the actual 
chemicals which may include chemicals like phthalates. They are 
endocrine receptors, chemicals of concern, but that are masked 
underneath these product labels.
    Toys also. We are seeing more and more claims about green 
toys, healthy, safe toys, and again we don't know what is in 
them. We don't know what the plastic is made out of. We don't 
know if there is phthalates again or other problematic 
chemicals.
    There is an opportunity, I think, now from these gaps for 
this commission and for the FTC, I think, to move forward on 
disclosure. The first is that information should be disclosed 
on key life cycle impacts. We need to know the key material 
pieces of information about the product, not vague, irrelevant 
claims but what actually matters.
    The second is that companies should publicly disclose the 
ingredients in their products before they make any 
environmental or health claim about those ingredients. The 
information should be scientifically precise and verifiable and 
available on the manufacturer's Web site at a minimum, on the 
packaging ideally. And this information over time should be 
verified by third parties.
    To sum up, I think, Chairman Rush and the committee, there 
is a huge opportunity right now to remedy a failure in the 
marketplace of information, to move and motivate increased 
transparency among industry and ultimately support innovation 
in our markets that will lead to development of cleaner, safer, 
healthier products that are better for our health and better 
for the environment of the United States. Thank you.
    [The prepared statement of Mr. O'Rourke follows:]

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    Mr. Rush. The chair thanks the gentleman. The chair now 
recognizes for five minutes Mr. Cooper. Mr. Cooper, please 
limit your remarks to five minutes or thereabouts.

                  TESTIMONY OF SCOTT P. COOPER

    Mr. Cooper. Thank you, Mr. Chairman and members of the 
subcommittee. My name is Scott Cooper, and I am vice president 
of Government Relations and Policy for the American National 
Standards Institute. More than 90 years, ANSI has served as the 
coordinator of this nation's private-sector lead and public-
sector supported voluntary consensus standards on conforming 
assessment system, comprised of government agencies, many of 
them including EPA, Commerce, DOE, DOD, USDA, CSPC, DHS, as 
well as companies, trade associations, professional societies, 
and consumer groups including Consumers Union I am happy to 
say.
    ANSI represents the interests of more than 125,000 
organizations and 3.5 million professionals worldwide. Today's 
consumers are shopping with sustainability in mind, placing 
ever-increasing value on the environmental and societal aspects 
of part design, manufacture, distribution, use of disposal. 
Where consumers see value in going green, there is a 
competitive advantage to those companies who can supply 
environmentally sustainable products.
    Where an advantage can be perceived, there will be those 
who will want to gain the system. We need to ensure the 
credibility and consistency of environmental claims and so I 
commend you, Mr. Chairman and members of the subcommittee, for 
holding this hearing.
    By collaborating across industry sectors and bringing in 
environmental groups and others, we can build upon some of the 
excellent standards and compliance programs that are already in 
the marketplace, identify gaps where new solutions will help, 
and start building consensus through a partnership between the 
public and private sectors.
    In April, ANSI took a first step in organizing the workshop 
toward product standards for sustainability. Convened at the 
request of one of our members, the U.S. EPA, the workshop was 
attended by over 240 in-person participants and over 100 via a 
live webinar. Representatives of multiple U.S. government 
agencies, companies, retailers, trade associations, and 
environmental groups were on hand to join the discussion, and 
one of the, I think, the great take-aways from that discussion 
was I think people are ready--all groups of people involved in 
this are ready to take a step inward and try to find ways of 
working together.
    In the coming weeks, we expect to release the final 
workshop report, which will detail the discussions, 
recommendations that came out of the meeting. In the meantime, 
I would like to share a few of those messages that we heard 
from attendees.
    First, consistent and globally accepted terminology tops 
the list of needs, and I think that has also been described by 
other witnesses. There is a consensus that terms like attribute 
and certification are now interpreted differently by consumers 
and standards of developers in government industry. We need to 
bring consensus to that process.
    Second, standards need to be clearly written so they can be 
effectively used for reliable certification. The marketplace 
needs claims can be substantiated so consumers can reward good 
performance with their purchasing power. And finally, 
participants saw a clear need for an overarching body that will 
coordinate and guide the process going forward with input from 
both the public and the private sectors.
    As part of our mission, ANSI is proud to facilitate problem 
solving through a number of public/private partnerships. The 
workshop is just the latest example of ANSI's many issue-driven 
coordination activities which include partnerships with other 
agencies such as HHS on health care information technology. We 
work with the CPSC and this committee on toy safety, with EPA 
on water conservation, with DOE and NYST on developing maybe 
the next generation of nuclear civilian power plants. A number 
of other issues that we think are sort of front and center to 
the public policy formulators in this committee and other 
places.
    As the voice of the U.S. standards in conforming a 
consistent system, ANSI is actively engaged in accrediting 
programs that assess conformance to standards for a number of 
different industries. There are many conforming assessment 
activities applied in today's marketplace including 
accreditation, certification, inspection, registration, 
suppliers declaration and testing, all of which are important 
in this holistic approach toward issues like green claims.
    As an independent third-part process, ANSI accreditation 
helps to promote practices while reducing the need for 
government agencies to individually monitor conforming 
assessment organizations.
    ANSI is currently offering accreditation services in a 
variety of conforming assessment areas that are directly 
related to sustainable products and practices including 
greenhouse gas emissions, sustainable forestry, environmental 
management system, as well as in food and agriculture.
    Third party accreditation demonstrates conformance, 
verifies confidence and strengthen consumer confidence in 
product, people and services. We feel strongly that it has an 
important role to play in the success and credibility of 
environmental labeling efforts.
    Mr. Chairman and members of this subcommittee, I think we 
all can agree that labels and communications to consumers about 
the degree to which products, people, and services address this 
inability need to be uniform, transparent, and comprehensible. 
In order to make this vision a reality, we need to have more 
efficient use of standards and conformance resources, some of 
which are already in place, and we need to identify gap that 
does exist.
    We also need to bring to bear new human and financial 
resources that can strengthen existing systems while satisfying 
future needs, and I think that we see by the work of the FTC 
that the idea that first do no harm. And I think we also need 
to look at sort of what can we do to advance the cause for good 
environmental claims. I think both need to be done at the same 
time.
    Government and industry need to work at a single purpose if 
we are to define fair green claims marketing practices. ANSI 
stands ready to coordinate the public/private partnership and 
help in make the next step for a meaningful solution with 
challenges associated with standards and compliance programs 
that address environmental and societal impacts. Thank you, and 
I welcome questions.
    [The prepared statement of Mr. Cooper follows:]

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    Mr. Rush. The chair thanks the gentleman. Now it is my 
pleasure to welcome a witness who we announced was en route. We 
have with us now and witness statement of Dr. Dara O'Rourke who 
is an associate professor of the University of California at 
Berkeley--no I am sorry. Let me start all over again.
    Dr. Urvashi Rangan is a director of the technical policy at 
the Consumer Union. Dr. Rangan, it is certainly a pleasure to 
have you here before us, and as I have done with the other 
witnesses, I would ask that you stand and be sworn in before 
you begin your testimony.
    [Witness sworn]
    Mr. Rush. Let the record reflect that Dr. Rangan is 
responding affirmatively. We will recognize you now, all in one 
fell swoop here. We will recognize you for five minutes for the 
purposes of opening statement.

                  TESTIMONY OF URVASHI RANGAN

    Ms. Rangan. Thank you so much, Chairman Rush and members of 
the subcommittee. It was wheels off, and we did take off from 
New York, so I am really pleased to be here. My name is Urvashi 
Rangan. I am director of technical policy at Consumers Union, 
the nonprofit publisher of Consumer Reports magazine. I have 
been with the company for just about 10 years now.
    I am an environmental health scientist, and I provide 
technical support to our research and testing and helping 
develop our advice and policy recommendations as well as 
advocacy initiatives on a wide array of environmental and 
public health issues.
    I also have been directing our free green public service 
Web site, greenerchoices.org, which disseminates a wide range 
of reports on the green marketplace including an ecolabel's 
database that gives consumers our evaluation and ratings of 
more than 150 environmental claims including those found on 
food, personal care products, and cleaners. We also advocate 
for strong labeling standards across a wide array of products.
    There are broad and specific challenges in defining a fair 
green marketing place, and we believe that the government does 
have a very important role in guiding and protecting this 
marketplace. Consumers are faced with a dizzying array of 
labels--I think you have probably heard that from every 
panelist--some of which are very specific like no phthalates to 
those that are vague and not well defined like natural and 
green.
    This marketplace is incredibly confusing for consumers, and 
it is often filled with a lot of noise that can be misleading 
and at times deceptive. Often consumers are presented with 
claims that sound better than they are, carbon negative, which 
has minimal standards or none, natural, nontoxic, while there 
are also meaningful, certified, credible labels to choose from.
    Of the certified label programs, there are several viable 
business models including public, private, nonprofit and for-
profit that may or may not be of interest to a particular 
consumer.
    Some claims have comprehensive standards behind them--
robust verification like certified labels, while many do not 
like general claims that can voluntarily be made by a 
manufacturer. But it is virtually difficult to impossible for a 
consumer to make an accurate assessment of what type of green 
claim they are being faced with in the marketplace.
    The Federal Trade Commission's role in reducing deceptive 
marketing practices is necessary and should be broadened. At 
the same time, the baseline for good marketing practices and 
minimum standards for common claims should be established.
    Consumers are currently faced with this huge learning task 
that better guidance and regulation could reduce. Requirements 
for transparency in standards product information, as Professor 
O'Rourke mentioned about ingredient lists and full disclosure, 
should be standard for all products sold with green claims.
    Government regulation and guidance again would be helpful 
in maintaining these universal requirements for credible green 
marketing practices.
    We have been rating the meaning of green claims for 
consumers for the last 10 years. We measure the value of green 
claims over the conventional baseline. I have this in more 
detail in my written testimony, but quickly we assess how 
meaningful the labels are.
    We look at standards. Are they credible? Have they moved 
over time? Do they evolve with time? Verification, consistency, 
and meaning from product to product, transparency not only of 
the standards but of information about the certifying 
organization. Stakeholder input, that is the opportunity for 
all stakeholders to have input into the standard setting 
process but also independence, which is that once all the input 
has been sought, we believe the best labels are those that are 
defined by an independent body and judged upon by an 
independent body.
    In evaluating these claims, we provide consumers with 
comparative rating snapshots, and I also presented at the 
American National Standards Institute a presentation and can 
also submit that in for the record as well.
    Based on our experience of rating and monitoring claims, we 
have identified a few trends. Comprehension and accessibility 
are challenges for all green claims. Whether they are specific 
or broad, the maintenance and evolution of standards must be 
addressed over time, and consistency across different product 
categories can also be a challenge. The ability to respond and 
incorporate emerging marketplace issues, whether it is 
phthalates, Bisphenol A, whatever the flavor of the day is, it 
is another hurdle for labor standards and programs. All of 
these standards can be addressed with the increasing complexity 
of the label.
    A few recommendations from us. One we feel that the 
government can play a role in eliminating or better defining 
meaningless claims in the marketplace. So voluntary claims like 
natural or carbon negative or nontoxic or even free range, if 
you can believe it, don't have standardized meaning. They don't 
mean much for consumers. We just prefer to see those labels 
gone from the marketplace altogether in order to increase the 
opportunity for credible labels to actually succeed.
    We think that there should be baseline practices set for 
all green marketing claims, that there should be a floor for 
transparency, there should be full disclosure, and we think 
that government labeling programs--so this is where the 
government decides to take on a labeling program--really ought 
to meet the highest standards out there for credibility in 
order to give the highest level of assurance to consumers.
    There are several government-based labeling programs that 
could use a boost at this point, whether they are the myriad of 
programs at EPA, which have varying transparency and 
verification requirements. And also whether it is the FTC 
overseeing some of those labeling programs that are going on in 
the other agencies, things like no antibiotics, natural, 
fragrance-free, these don't have properly defined meaning, and 
yet they are overseen by our government agencies. We think that 
the FTC has a broader role to play in the oversight of those 
labeling programs as well. Thank you.
    [The prepared statement of Ms. Rangan follows:]

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    Mr. Rush. The chair thanks Dr. Rangan. The chair thanks all 
the witnesses now. The chair recognizes himself for five 
minutes for the purposes of asking questions of today's 
witnesses.
    In today's testimony, we heard about the growing number of 
``green'' claims made about household products. Dr. Kohm told 
us about a ``virtual tsunami'' of these claims, and Dr. Rangan 
used the term ``green noise'' to talk about the conflicting, 
confusing and overabundant information in the marketplace.
    And I want to start with a question for the entire panel 
regarding the types of information that green labels should 
provide to consumers. There appear to be so many expectations 
for what these labels cover. Environmental impacts of the 
packaging or the products itself, the possible health impacts 
of the products on individuals, among others.
    The question for each one of the panelists is this. What is 
reasonable for consumers to expect from these labels? And what 
is beyond the scope of green labeling? More simply, what should 
it mean for a product to be green? I would like to begin with 
Dr. Kohm. What is reasonable for consumers to expect for these 
labels to cover?
    Mr. Kohm. Chairman, we look at this in a way that would 
turn your question around. We look first at what a reasonable 
consumer expects, and then we require marketers to meet that 
expectation. So the question for us is what does the label 
convey to a reasonable consumer? And then the marketer has to 
meet whatever that reasonable interpretation is.
    Obviously that is a problem, as you indicated, given the 
breadth of these kinds of claims and the fact that they cut 
across virtually every market sector. It is very challenging to 
have one label that meets all those expectations.
    Mr. Case. Thank you, Mr. Chairman. I think the challenge 
here is that it is almost impossible to determine what a 
reasonable expectation is. I think what we can do, however, is 
require that any manufacturer making an environmental claim, 
publicly provides proof of the accuracy of that claim and that 
any label on a product that suggests green in some sort of 
broader sense clearly define what tests were required to meet 
the eligibility requirements for that label.
    So basically it boils down to greater transparency so that 
consumers have the information they need to evaluate products.
    Mr. O'Rourke. I agree completely with Mr. Case. I think the 
first question is what is the key material impact of the 
product, what matters most. And we use a tool called life cycle 
assessment to determine what really matters in evaluating a 
product's environmental or social health impact. And the second 
is is there full transparency on those impact categories.
    So the ideal product label would tell you information on 
what actually matters in that product. So we see products 
including in the foyer to this committee hearing that are 
claiming they are environmentally sensitive products, but they 
are not disclosing what really matters in this product to the 
environment, to whether those chemicals that are biocumulative 
or toxic to human health or the environment. That is the 
information for each product.
    If we are looking at electronics, we want to know does the 
company have a good take-back program to reduce the end-of-life 
impact of the product. If it is apparel, it is a different set 
of issues. Right now, our big problem is that companies can 
claim anything, whether it is irrelevant to the main impact 
category or not, and not disclose the underlying information, 
the ingredients or the performance, which makes up the real 
impact to the environment and human health.
    Mr. Cooper. I think it is a very good question. I think the 
FTC already has some tools available to it. One is called the 
Pfizer doctrine, which says that if you make a claim, you had 
better be able to substantiate it. There is also what is called 
material information, that consumers have the right to certain 
material information for them to be able to make an informed 
choice. And that actually was developed with a series of 
letters between then Chairman Dingell and the FTC back in the 
early '80s.
    I think what you have, a lot of members here talked about, 
is sort of the baseline that you need, that you should not be 
able to go below that if you are going to be able to make a 
claim. Now, how you define that is something that I think we 
could all work on, but I think that is not a bad starting 
point.
    I think you also have to recognize that the FTC really is 
sort of in the position of saying first do no harm, making sure 
that whatever claim you do make, that is it credible, that it 
is accurate.
    I think also though there is a need to look at proactive 
efforts. In other words, we want to get the marketplace to 
expand beyond just the baseline. We want to make this a 
competitive advantage, a true competitive advantage where 
people are constantly looking for new ways of improving their 
score on environmental issues. That should be a positive 
incentive that we want to create.
    So I think there is a lot of balances that have to be in 
the mix here, but I think they all can be of it if we have sort 
of a consensus process that we try to develop.
    Ms. Rangan. Thank you. I agree with most of what this panel 
has said and would just add that consumers are often faced with 
a premium when they are choosing among these labels. And so it 
takes more than just being truthful. It actually has to have 
some meaning.
    And so when you see the no CFC label, for example, on an 
aerosol typical personal care product or cleaning aerosol 
product, that is the law. You can't have CFCs, and yet 
manufacturers use that claim without any other disclosure that, 
in fact, that is what all products in that category have to 
meet.
    So to disclaim a lack of value over the baseline or 
products, like products, would be very important in terms of 
being truthful and not deceptive to consumers. And then in 
terms of just to capture something that was just said about 
marketplace capture, these premium labels shouldn't be able to 
be met by most of the marketplace. They should be reserved for 
a top tier, and that in and of itself should drive innovation 
within a product sector to meet those standards.
    In Japan, there is a program called the Roadrunner 
Standard, which in the energy efficiency standards, I can't 
remember the number, but it is a certain small percentage of 
the market that can meet it. That is expected to be the bottom 
a few years later, and again you slice it off at 10 percent who 
can meet the high premium label standards.
    So creating incentives and innovation like that in the 
green marketplace will also drive the industry to create the 
innovation to meet higher standards.
    Mr. Rush. The chair's time is concluded. The chair now 
recognizes the ranking member Mr. Radanovich for five minutes.
    Mr. Radanovich. Thank you, Mr. Chairman, and welcome. I 
have enjoyed the testimony of all the members. Glad you made 
it, Dr. Rangan, and I would like to start off with a couple 
questions, one for Mr. Case. Appreciated your testimony. In 
trying to define what is green and what is not, do you believe 
a regulated product with a chemical in it could be defined 
green?
    Mr. Case. Most products have chemicals in them, so 
absolutely yes.
    Mr. Radanovich. OK.
    Mr. Case. So there are, in fact, greener chemical-based 
products.
    Mr. Radanovich. OK, question for the whole panel then as we 
are trying to define what green is. If you were to define it, 
would you limit its definition to biodegradability and life 
cycle carbon footprint alone, or would you add other things to 
that definition? And let us just go down the line and say you 
got those two things, biodegradability and life cycle 
footprint. Would you add--what would you add to that if that 
wasn't sufficient to you?
    Mr. Kohm. Well, what the commission has said, Congressman, 
is that general environmental claims like green or ecofriendly 
aren't very useful and can be deceptive. Because they mean----
    Mr. Radanovich. Well, what would you add to those--if you 
had two things, what would you add?
    Mr. Kohm. What we would do is look at how consumers 
interpret a claim in context and not add----
    Mr. Radanovich. Could you just--because I got to go down 
the line, and I don't mean to be rude. Don't take it the wrong 
way, but if you just had those two things, biodegradability and 
life cycle carbon footprint is the definition of what you would 
label green, if you think that is not sufficient, what short 
responses would you add to it?
    Mr. Kohm. I think you would have to add many, many claims 
depending on how a consumer would interpret something in 
context.
    Mr. Radanovich. OK, thank you. Mr. Case.
    Mr. Case. So obviously you would need to take a look at all 
of the environmental impacts throughout the products entire 
life cycle, from the raw materials that are used all the way 
through. So you didn't mention, for example, energy efficiency.
    Mr. Radanovich. OK.
    Mr. Case. You didn't mention water efficiency. You didn't 
mention low toxicity. You didn't mention how one defines 
biodegradability. I see the smile. I will stop there, but we 
could go on all afternoon listing the various environmental 
attributes depending on the product category, as Dr. O'Rourke 
mentioned.
    Mr. Radanovich. OK.
    Mr. Case. The standards would be different for computer 
products than cleaning.
    Mr. Radanovich. I am working down the list here. Dr. 
O'Rourke?
    Mr. O'Rourke. Right, I also agree that we should be using 
life cycle approaches to understand the real impact across from 
raw material extraction to manufacturing to use to disposal. 
For consumer products, the things I would add to your short 
list are persistence, is it biocumulative, and is it toxic to 
human health or the environment? I would add those on top of 
yours.
    Mr. Radanovich. OK, Dr. Cooper. Mr. Cooper, excuse me.
    Mr. Cooper. Don't have that other degree. When I worked for 
this subcommittee back in the early '90s, the jurisdiction was 
not only consumer affairs, it was also rec run and superfund. 
And so the issues----
    Mr. Radanovich. I am sorry. I need to get you on the 
question though. Because if you had biodegradability and life 
cycle carbon footprint defining what was green, what else----
    Mr. Cooper. The issues that would be front and center of 
this subcommittee then were recyclability, post-consumer waste, 
a lot of issues around the whole recycling mandate. Those are 
the ones I would add to it at this point.
    Mr. Radanovich. Thank you, Mr. Cooper. And Dr. Rangan.
    Ms. Rangan. I agree with again most of what was said. I 
would stress the health aspect of it, whether it is persistence 
or toxicity, and I would also add social responsibility. Fair 
trade is the common term that people talk about, and there are 
plenty of Venn diagrams about sustainability. But you would be 
amazed and almost shocked and awed as to the multiple 
attributes that you could consider in any kind of green 
marketing claim.
    Mr. Radanovich. All right, question for everybody too. 
Should government dictate the process of a manufacturing of a 
product or the makeup of a product in order to be able to get 
some kind of a green designation?
    Mr. Kohm. That would certainly not be within the FTC's 
purview.
    Mr. Radanovich. OK.
    Mr. Case. And absolutely not. These are not prescriptive. 
What we are doing instead is identifying what environmental 
leadership looks like and some people will make an awful lot of 
money meeting those high standards.
    Mr. Radanovich. OK.
    Mr. O'Rourke. I think the key here is transparency, that 
Congress requires public disclosure of what is actually in 
these products. And just through making that public alone, not 
mandating what is in it, how it is made, just mandating the 
disclosure and the transparency, will create incentives for 
leading firms to innovate and other firms to change their 
products.
    Mr. Cooper. We like the public/private model. The 
Underwriters Laboratory is a member of ANSI. The UL label is 
seen everywhere. In fact, it is in the energy bill. So I think 
that model could work in this area as well.
    Ms. Rangan. My answer is little different. I think where 
there are common terms that baseline definitions should be 
provided. If we are going to continue to allow natural to be 
used and widely, we ought to have some baselines as to what 
that ought to mean. And in food, there is a plethora of 
examples where we have really common even discrete terms like 
no antibiotics, and yet that doesn't have to mean the same 
thing from product to product. So, yes, we think there is a 
role for the government to play in providing some baseline 
definitions to some of the claims out there.
    Mr. Radanovich. All right, thank you. Thank you, Mr. 
Chairman.
    Mr. Rush. The chair now recognizes the gentleman from 
Maryland, Mr. Sarbanes.
    Mr. Sarbanes. Thank you, Mr. Chairman. I was curious. As 
you look at the challenge of this kind of labeling, the sort of 
transparency in labeling regime that we are trying to bring to 
bear with respect to green products, is there any analogous 
labeling challenge you would point to over and above some of 
the others to kind of be a frame of reference for this? Or is 
this kind of--does this have some unique dimensions to it that 
we ought to be aware of? So I would just ask anybody to jump 
into that.
    Ms. Rangan. Even within the government, there is a number 
of labeling programs at sort of varying levels of maturity, and 
even--you have Energy Star, which is one of the oldest ones. 
You have organic, which is now pretty mature, and there is a 
lot of learning lessons to be had from both the way the model 
is set up in terms of how the labeling programs are run, how 
they are overseen, and how the standards evolve or don't evolve 
over time. And so there are a lot of lessons to be learned.
    And there is a lot of variation in quality among even the 
government-based labeling programs.
    Mr. Sarbanes. Anybody else want to----
    Mr. Case. Sure, I will say that there are a number of 
excellent standard-setting protocols that are out there. ANSI 
runs a wonderful program. There are ISO programs that define 
how environmental leadership should be established. So those 
are very, very useful. And what I really like is the USDA 
organic model because what they did is they took a confusing 
space with dozens of different standards for organic and 
grouped them under one label. And that is what allowed the 
organic farmers in this country to really make a lot of money 
because that provided clarity in a single brand for consumers 
to look for.
    Mr. Sarbanes. Well, it occurred to me the organic example 
would be a good one to consult, or the organic experience with 
that kind of labeling would be a good one to consult. But I 
wanted to get your thoughts on that.
    Mr. O'Rourke. I might add a quite different experience, 
which is in financial disclosure and the role of the Securities 
and Exchange Commission in requiring disclosure of key material 
information from companies. I think that we are moving towards, 
I think, a system that would require disclosure of non-
financial metrics from companies in standard formats through 
XPRL or other formats that would allow people, either analysts 
or consumers, to evaluate products and the companies more 
accurately.
    So just as we had this problem with toxic assets over the 
last few years, we are realizing we are having problems with 
toxic products where people would not buy them if they knew 
what was really in them.
    Mr. Sarbanes. Well, let me ask this question. I think, Dr. 
O'Rourke, you are the one that founded Good Guide. Is that 
right?
    Mr. O'Rourke. Correct.
    Mr. Sarbanes. Yes, which is an online resource for people 
to kind of check on the claims.
    Mr. O'Rourke. That is right.
    Mr. Sarbanes. And what I was curious about is how you see 
the service you provide relating to the level of kind of 
government regulation that needs to be in this area. In other 
words, do you view what you are doing largely now as just being 
a compensator for the absence of some good other oversight and 
transparency mechanisms? Or do you see the potential whatever 
we achieve in that regard to be a kind of partner in the effort 
and achieve a higher level of accountability across the board?
    Mr. O'Rourke. Yes, thank you for that question. We 
basically begun Good Guide out of this huge gap in the 
information available to consumers, and it really was an 
attempt just to fill this hole and get people information that 
they were desiring about health, environmental, and social 
impacts of products.
    We are now working closely with the state of California, 
and hopefully we would be very excited about working with the 
federal government about getting better information out, 
required disclosure of this information that would allow the 
public to get this information in a standard format.
    I think over the long term, there is a huge and vital role 
for government in facilitating better communication of 
information out to the public. And this small project, Good 
Guide, is really an attempt to learn what information does the 
public want, and in what form is it most effective in helping 
them make better decisions in the marketplace.
    Mr. Sarbanes. This is an off-the-wall question, but is 
there any--have there been any ideas about technology that 
would allow consumers as they move through a store, for 
example, on their phone or some other device to scan right 
there and go straight to a consumer guide? Did you already talk 
about that?
    Mr. O'Rourke. No, but we have actually built that software 
at Good Guide, and we have the ability to scan barcodes. We are 
looking at RFID tagging of products. And over time, what we 
want to do is allow people in stores to get the best available 
information in the world on products and companies so that they 
can make better decisions for themselves and not have to depend 
on marketing or package claims. But they can get scientific 
information on these products.
    Mr. Sarbanes. OK, thank you.
    Mr. Case. And Good Guide is actually not the only company 
that is doing it. There are dozens of companies that have 
approached this saying hey, we got the technology. We just need 
the information. And what is lacking is, you know, how do you 
define this is a green product? Because we have the technology. 
It is the definition we need.
    Mr. Sarbanes. Thank you. I yield my time back.
    Mr. Rush. The chair now recognizes the gentleman from 
Michigan, Mr. Stupak, for five minutes for the purposes of 
questioning the witnesses.
    Mr. Stupak. Thank you, Mr. Chairman. Sorry I couldn't be 
here for all the hearing. I have been in and out with other 
hearings and other matters. Mr. Cooper, let me ask this 
question because I want to know more about these standards 
because I support the scientific rigor and the transparent 
process that the American National Standards Institute requires 
of any organization seeking accreditation as an ANSI standards 
development organization.
    My understanding is that there are three primary green 
building certification systems in the marketplace. Green 
Globes, LEED, and the National Association of Homebuilders 
National Green Building Standard. Can you discuss for us 
whether the organizations that developed these standards are 
ANSI standards development organizations, and whether they use 
your approved procedures to develop these standards? Because 
what I hear everybody saying, they are all talking about 
different standards, but who is regulating the standards in a 
way?
    Mr. Cooper. There are multiple paths, which makes it a bit 
more complicated, but every one of those codes you mentioned 
does fall under the ANSI rubric. Some of those will have their 
own approaches, say like the ICC in the National Food Council.
    Mr. Stupak. Right.
    Mr. Cooper. Works very closely with local units of 
government. So it is not quite the consensus process that we 
have for most of our standards because it is only with the 
local units of government that they interact with. Usually we 
insist that it is a much more ecumenical group, including 
consumer groups or government agencies as well at the federal 
or local level.
    So each one of those can approach differently, but every 
one of them has to meet basic ANSI standards of transparency, 
of involving the interested parties. They have to be able to 
respond to questions of inclusion. And if they want to become 
an ANS standard, then there is a whole other level of 
involvement with ANSI. If they then want to become an 
international standard, there is a whole other level with ISO.
    Mr. Stupak. Right.
    Mr. Cooper. So they serve bolts and suspenders in each one 
of these, and against the standard, you also have all the 
obligations with the conformants, you know, the testing, 
inspection, the measuring, measurement, which is not only the 
certification, which we don't do, but say like a UL would do. 
But then we would accredit the UL so that we are looking at the 
testers. You know so there are levels of these things. And 
partly because we are not a government agency, we have to 
overcompensate for these things.
    Our job in most any other country would be done by 
government agency.
    Mr. Stupak. Does anyone care to comment on that any 
further? Let me ask this one then, Mr. Kohm. The FTC announcing 
today three complaints alleging false and misleading claims 
regarding environmental claims. Despite today's discussion on a 
vast array of misleading green claims on products, three is a 
very small number of enforcement actions. So describe the FTC's 
approach to enforcement in this area and under what 
circumstances do you turn to enforcement of some standards?
    Mr. Kohm. Well, we turn to enforcement when it is 
necessary, and we use enforcement not only to get people under 
order and to have an effect on the people who are violating the 
law, but also to lay out a marker for those people who might 
otherwise violate the law. And the hope is that in bringing 
cases in certain areas, that we will have an effect well beyond 
the cases that we bring.
    Mr. Stupak. Do you work with state governments to do 
enforcement at the more local level?
    Mr. Kohm. Well, we bring national enforcement action.
    Mr. Stupak. Right.
    Mr. Kohm. We regularly work with state partners and with 
other federal agencies. For example, in at least one of the 
cases, the EPA is helping with expert testimony.
    Mr. Stupak. What is your tipping point? When do you 
actually bring enforcement standards? I mean do you work with 
these industries and companies? What is the point where you 
turn to enforcement?
    Mr. Kohm. Well, it is different in each circumstance. We 
regularly work with companies. We work with various 
associations to try and get the word out. When that isn't 
working or when people step way over the line, then enforcement 
is necessary.
    There is kind of two folks we deal with: the folks that 
step over the line and the people who live over the line. And 
for the people who are committing fraud and living over the 
line, like the cases I mentioned for car devices, one of them 
is called a nano detonator that runs on nuclear fusion that 
would be about 100 million degrees. That, if it actually 
worked, those people need to be sued, and the commission has 
been quite active bringing eight cases over the last year, and 
I would expect more in the future.
    Mr. Stupak. OK, does anyone else care to comment on that, 
what you see FTC's roles and enforcement while at the same time 
trying to set standards? Mr. Case?
    Mr. Case. My challenge is that when the enforcement action 
occurs after consumers have been defrauded, that, you know, I 
am stuck at this point with a $2,500 refrigerator that doesn't 
even come close to meeting the Energy Star standard. So, you 
know, allowing companies to make claims without requiring them 
to provide proof so that, as a consumer, I know the claim is 
accurate before the purchase is sinful.
    Mr. Stupak. OK, but how do you do it until they advertise 
we have some victims, right?
    Mr. Case. Well, one of the things that you can do is 
actually require that if you are going to be making an 
environmental claim that you have to post information providing 
evidence that the claim is accurate, so that as a consumer, I 
could stand there in the store with my phone and go online and 
see yes, this claim is accurate.
    Mr. Stupak. So until we get Mr. Sarbanes' idea on their 
cell phone, we have to have something else, a posting prior to 
the time of sale. That is what you are saying?
    Ms. Rangan. And the example that Mr. Case used about the 
refrigerator is actually Consumer Reports' test of Energy Star 
and the energy standards that showed that the standards don't 
capture what the problems are out there. If you can turn off 
the icemaker and you can turn off all the bells and whistles of 
the refrigerator and test it for energy consumption. But when 
you turn them all on, it is doubled, that is not good enough. 
And it just highlights again how standards and in this case, a 
government labeling program standard needs to evolve over time.
    And where we would like to see more FTC involvement in 
making sure that those claims are truthful and meaningful over 
time for consumers.
    Mr. Stupak. Thank you, Mr. Chairman.
    Mr. Rush. The chair thanks the gentleman. The chair would 
like to inform the witnesses and the members of the 
subcommittee that he intends to allow for a second round of 
questioning. And so if the witnesses could please let us use a 
little bit more of your time for a second round of questions. 
And we will have a second round of questioning. The chair 
recognizes himself for two minutes for the purposes of asking 
additional questions.
    Mr. Kohm and all the witnesses, this has been some very 
interesting testimony, some quite provocative I might add. One 
of the questions that I wanted to ask Mr. Kohm, you talked 
about your enforcement actions, but--and you did not reference 
at all the Green Guide when you said that the--or allege that 
the companies stepped over the line.
    Can you--let us get back to the place of the Green Guides. 
I think this is very important. What place should the Green 
Guides place--or have rather in the future enforcement cases? 
And should that be a beginning, or how should that Green Guide 
inform future enforcement actions?
    Mr. Kohm. Well, Chairman, I think the Green Guides are 
incredibly important. That one of the things the Green Guides 
are intended to do is demarcate that line so that the people 
who are trying to stay on the right side more easily can do so. 
That there are some people that step over it because they don't 
know where the line is, and we can make that line clearer. 
There are some people who step over because the whole 
marketplace starts to go over the line, and that is where we 
need to take enforcement action to make clear where that line 
is. And that is one of the things we did today.
    Mr. Rush. Do any of the other witnesses want to respond 
about the importance or a lack thereof of the Green Guides?
    Mr. Case. Yes, I will support Mr. Kohm. I think that 
absolutely when the original Green Guides came out in '92, we 
saw lots of additional clarity in the marketplace about what 
was acceptable and what wasn't, again with the revisions in '98 
and '99. And what we are hopeful is that the next version of 
the guides actually provides a much more comprehensive 
assessments and really kind of requires people to provide 
proof, requires people to provide some clarity on these issues, 
and makes sure that as consumers, we know whether the 
information is accurate, relevant, and verifiable.
    Ms. Rangan. We also support the green marketing guides by 
the FTC, and we also look forward to the update because they 
could be expanded to be much more broad in terms of the scope 
of claims that they are covering and much more detailed in 
terms of what is acceptable and what isn't.
    Mr. Rush. Thank you. The chair now recognizes the ranking 
member, and the chair wants to clarify, before the ranking 
member begins his questioning, it has been requested by the 
ranking member and by the Republican side that we have five 
minutes of additional questions. The chair said it will be two 
minutes. So the chair will recognize the ranking member for 
five minutes, recognize Mr. Stupak for an additional five 
minutes. And then the chair will come back for his other three 
minutes. So with that, the chair recognizes the ranking member 
for five minutes for additional questions.
    Mr. Radanovich. Thank you, Mr. Chairman. Appreciate the 
openness to try to answer as many questions as we can and get a 
benefit from this panel of speakers.
    Mr. O'Rourke, you had mentioned something in your testimony 
that consumers have little information on critical aspects of a 
product. And it reminds me of getting up in the middle of the 
night and needing an aspirin or something and trying to go 
through what is on the back of an aspirin label and you search 
for the dosage because you want to take the correct amount and 
my gosh, it is not on the first page. You have to peel back to 
get to the second page, and there is so much garbage on that 
label that really all that you are looking for is the dosage.
    And I guess my question is how much information can you 
expect to give a consumer on a label, and how much of this is 
subject to buyer beware?
    Mr. O'Rourke. Yes, so we are seeing, I think, more and more 
consumers are looking for some key pieces of information when 
they look at products. So in your case, it was the dosage or 
the directions on how many you should take. When I look at a 
green cleaner, I want to know are there specific chemicals of 
concern that I don't want in my house, in the air, on the 
dishes, wherever. Personal care products that I don't want 
certain chemicals. And what I think the first step is deciding 
what are the key pieces of information that need to go on that 
label that are most pertinent to protecting people's health and 
the environment.
    If there is too much information, what we are proposing 
that it needs to be disclosed on the manufacturer's Web site. 
So we are seeing right now in the house cleaners area that 
there is not a federal mandate to disclose all the ingredients 
in your floor cleaner, your toilet bowl cleaner. Some of the 
harshest chemicals in your house, they are not disclosed on the 
package.
    What we would like is that they would be disclosed 
somewhere, either on the manufacturer's Web site or ultimately 
on the package. So I think that for things like that, you are 
putting a harsh chemical in your house. I don't think you can 
put it on the consumer to just be buyer beware. I think that 
they need certain pieces of information to know how to protect 
themselves from chemicals.
    Mr. Radanovich. Could you clarify to me? It is my 
understanding that the Federal Hazardous Substance Act requires 
all that to be on there?
    Mr. O'Rourke. No, so on household chemicals products in the 
U.S., there is a requirement of disclosure of certain active 
ingredients over certain percentages. So if you go back home 
tonight and look in your bathroom or underneath your sink, most 
of the harshest chemicals that you will find in your house will 
have either one ingredient listed or zero ingredients listed. 
Whereas if you look at your personal care products, your liquid 
hand soap, the requirement is all ingredients in order of 
concentration. So your liquid hand soap will have 30 
ingredients listed, and your tub and tile cleaner will have 
zero, one, or maybe two at the most.
    And what they will do is say either call it inactive 
ingredients or they will dilute them enough that they don't 
have to disclose. So you will literally have no ingredients 
listed, and sometimes it will have phrases like fragrance, as I 
mentioned, which just masks ingredients.
    Mr. Radanovich. Right, OK.
    Mr. O'Rourke. So unfortunately we don't have accurate 
disclosure on chemicals in our houses.
    Mr. Radanovich. All right, thank you very much. Mr. Case, I 
want to ask a second question. You mentioned that the labeling 
program at the USDA dealing with organic foods, and as you 
know, the USDA Web site states that it is not a health or 
environmental program, but it is really a marketing program. 
And yet many people think that buying products with organic 
labels on them are somehow getting a health or environmental 
benefit.
    If transparency about the products and their manufacturer 
are what you seek, why do you hold up a program that relies on 
implied but not guaranteed benefits as your model?
    Mr. Case. What the USDA organic program does is actually 
bring clarity to the market. So for those consumers that are 
concerned with the pesticides that are used on fields with the 
farming technologies and techniques, worries about pesticides 
on food, what the USDA organic label does is provide a 
consistent platform for consumers to make educated comparisons 
between an organic product and a nonorganic product.
    So what it does is provide a common definition, a litmus 
test, if you will.
    Mr. Radanovich. All right, thank you very much. Dr. Rangan, 
you suggested other factors such as fair trade should be 
included in green labeling. But many of the environmental 
practices in fair trade countries is not up to U.S. standards. 
Is that useful to the consumer?
    Ms. Rangan. The International Labor Organization, ILO, is a 
good start. That is where Trans Fair bases their fair trade 
labeling program and their standards from, and it is a good 
international labeling start for fair practices.
    Do you mind if I just expand on your organic question for 
one minute?
    Mr. Radanovich. If you like.
    Ms. Rangan. Which is that there are cases where consumers 
rightfully infer that organic may offer them a healthier 
alternative, and I will just give you an example. When mad cow 
came out, organic was one of the few programs that actually 
required no animal byproducts in the feed. So is it a healthier 
alternative? Well, when it comes to mad cow, yes, it was an 
alternative if you still wanted to eat beef that minimized your 
potential exposure.
    And then that is the inadvertent side of health and benefit 
from organic, but on the advertent side, all the materials used 
in organic production have to be reviewed by the National 
Organic Standards Boards. And health and safety are components 
that have to be addressed in that review process.
    It happens to be based in agricultural marketing service, 
and after 10 years of watchdogging that program, we hear that 
mantra, we are not anything else but marketing. But I think 
that has more to do with where it lives than what it actually 
is.
    Mr. Radanovich. All right. Thank you very much, and I yield 
back, Mr. Chairman.
    Mr. Rush. The chair thanks the gentleman. The chair now 
recognizes Mr. Stupak for five minutes.
    Mr. Stupak. Thank you, Mr. Chairman. I think what I have 
seen from this hearing so far is that what constitutes green 
can be sort of a tricky business. But as we see a global supply 
chain get farther and farther removed from the everyday 
consumer, we are using more and more fossil fuels. So let me 
give you an example because I think we mentioned cleaners and 
that today. We have green cleaners or cleaners made basically 
from the same chemicals as always, but they are purchased from 
a closer distance. So the companies are saying well, we are a 
greener chemical because we are not using as much fossil fuel 
to transport.
    Now, does this fact alone, I use less fuel to transport the 
product, qualify a product to be a green product? Anyone want 
to answer that, Dr. O'Rourke?
    Mr. O'Rourke. I would say the short answer is no. What we 
need to do is evaluate the full life cycle of that product and 
determine whether transport or manufacturing process is highly 
energy inefficient and that it is a major impact category.
    For a few products, energy use and transport matter a lot, 
and for other products, they don't matter that much. So you 
really need to know does it matter to the product category. 
What we are seeing now in many cleaners is the claim that they 
are plant based rather than petroleum based. Again that may 
actually be a confusing concept because what they are doing is 
deriving a chemical from a plant, like sodium laurel sulfate, 
that can also be derived from petroleum. So the same chemical 
ends up in your product. It is just derived from a different 
source. So the key is finding out what really matters to 
environmental or health effects on these things, and is that 
claim--can you verify or can you back up that claim with 
transparent information?
    Mr. Stupak. Well, give me an example where transportation 
of cost alone would qualify it to be green, to use less 
transportation costs.
    Mr. O'Rourke. There are a few product categories in which 
transport of the product--really long distances, heavy 
products. So for instance, air shipping products a long way has 
a very high energy impact. So if you see something that was 
either grown in a greenhouse or flown to you, that is probably 
going to have a very high energy impact, and it is going to 
matter.
    So we see now more and more people in the U.S. looking for 
locally produced food for that reason, that they want local 
which reduces the big transportation change and the big energy. 
But there are many products in which the transport is a minor 
impact category.
    Mr. Stupak. Well, couldn't you make that claim then on any 
water-borne product basically, you know, from buying ore 
pellets in northern Michigan down to the steel mills? That is 
the only way you can transport it. It is the most efficient way 
and less fuel. Or even cars coming across the ocean because of 
the size and the weight and the bulk. I think there would have 
to be more to it than just transportation.
    Mr. O'Rourke. That is right. Air travel is the highest 
carbon intensity. Shipping is actually quite efficient carbon 
wise. Train transport quite efficient carbon wise. Local 
production, the most efficient. So there is a range of impacts, 
and you need to understand those things to be able to either 
evaluate it or make the claim.
    Another thing we are seeing a lot of bottled water. For 
instance, one bottled water company shipped from the South 
Pacific and claiming it is a green bottled water company. Huge 
transport and energy impacts of the manufacture and transport 
of that product. And then it has a beautiful green label and an 
ecobottle in which it is sold. We view that as confusing at 
best, deceptive at worst.
    Mr. Stupak. Dr. Rangan, you wanted to say something on 
that?
    Ms. Rangan. You know, I think that in talking about this 
sphere of green, there is a top and a bottom and sides. And if 
we are establishing a floor or talking about that floor, at the 
very least disclosure and truthfulness to the meaning should be 
there. So that if a company is making a carbon claim that 
either they use recyclable energy, wind energy to generate a 
product, those aren't void of value. They have some value, but 
the claim should reflect what they are doing.
    Should a carbon claim be interpreted as a health claim? It 
shouldn't be. And our advice to consumers is always read these 
claims quite literally, and it is also why we continue to say 
that discrete labels right now in the marketplace offer 
consumers the quickest way to understand what a product is. So 
if you need to group discrete claims together in order to 
explain the many attributes of green a product may have, then 
so be it.
    We prefer that method at least right now versus an 
overarching label where it is very difficult to tell the 
variations in the components.
    Mr. Stupak. Mr. Cooper. You got to turn your mike on.
    Mr. Cooper. You have aggressions law in effect here that 
bad labels are going to drive the good labels out of the 
marketplace. I think you first do no harm. I think one of the 
points that Dr. Rangan made about in Japan where you have an 
effort to sort of up the ante where you are looking for 
constantly improving the product is something that I think we 
also should consider as part of this mix. That you want to have 
companies who actually have a role to play in sort of being the 
pathfinders where you are constantly improving, you know, the 
products.
    Getting that sort of seal or label recognized is not going 
to be easy. What it is, like a Good Housekeeping or Better 
Business Bureau or Underwriters Laboratory, then it is a very 
powerful tool. So I think that that should be part of the mix 
as well.
    Mr. Stupak. Thank you, Mr. Chairman. It looks like my time 
has expired. Thank you for the second round.
    Mr. Rush. Thank you. The chair recognizes himself for his 
three minutes. You mentioned water. I mean somebody tell me 
about the false labeling that is involved in the water. I have 
a bottle of water here. It says ``smaller labels equal more 
trees,'' and it also under that says ``we could write more on a 
bigger label, but saving trees is important'' which we 
understand and agree with. ``By keeping it short, we saved 
almost 10 million pounds of paper per year in the U.S. That is 
about 30,000 trees.'' And then it says ``be green.''
    And I just want to know, first of all, this is a label. But 
also some of this stuff is nothing but tap water in a bottle, 
all right. And but yet consumers are buying their water because 
it is a part of being green and being healthy.
    Can you all respond to that and help us to help deliver the 
American consumer from the trap that they find themselves in?
    Ms. Rangan. Chairman Rush, you have just highlighted in 
that bottle what the problems are. Because there aren't 
baselines for what should be disclosed or not disclosed, it is 
up to a company to decide what they feel like disclosing and 
what they don't feel like disclosing. They can weave that into 
a green claim and say we are using less paper and less 
disclosure is less paper.
    And in terms of the water inside the bottle, absolutely. 
Our tests have shown year after year, if you filter your water, 
you are going to get as good of quality with regard to health 
as anything that is in one of those bottles.
    I think this is a great example of where the baseline has a 
lot of holes, and in filling those holes and getting rid of 
these generic claims that are vague and meaningless, we can do 
a lot toward reducing the confusion that comes from that bottle 
and a consumer trying to buy it.
    Mr. Case. Well, I think you are absolutely right. It is, in 
some circumstances, a legitimate claim. Under the seven sins 
taxonomy though, we would refer to it as the sin of the hidden 
tradeoff. What manufacturers are able to do with almost any 
product that you make is find some little nugget that allows 
them to say this makes it green. And so the question is well, 
how many nuggets are acceptable? At what point does it become 
green?
    And so what one needs is some sort of voluntary 
environmental label so that there are actual standards that say 
this is what green is, and if you have products that meet a 
standard developed in an open, public, transparent process, you 
will be able to resolve those kinds of issues. And so to be 
open to these kind of standard setting committees whether those 
kinds of claims are worthy of some sort of national label.
    Mr. Kohm. Chairman, those are fairly specific claims, and 
those are claims that, if true, a consumer can understand and 
make choices based on. A lot of the discussion today has been 
about these general green claims that, you know, I am green, I 
am ecofriendly, that are very difficult to substantiate. But if 
assuming all those claims are true and a consumer wanted to 
contribute to using less paper and assuming they didn't take 
any implied claim from that about the water, that those are 
useful.
    Mr. O'Rourke. The problem with those claims is that they 
are completely irrelevant to the actual environmental impact or 
health impact of that product. So it may be an accurate claim, 
but it is in a sense a kind of magician's bait and switch where 
you are looking at one hand and the real action is in the other 
hand. For that product, it is around the manufacturing of the 
water, the manufacturing of the plastic bottle and the disposal 
of the plastic bottle are the real environmental impacts, not 
the little tiny piece of paper around the sleeve of the 
plastic.
    So their claim may be accurate, but it is largely 
irrelevant to the actual environmental and health impact of the 
product.
    Mr. Rush. That concludes our hearing today, and I want to 
really relay to our witnesses I have not had a greater panel of 
witnesses to help us on any issue that I can think of since I 
have been chair, since I have been chairman of this 
subcommittee. You have been outstanding, and your testimony has 
been very, very informative and provocative and very 
interesting. And I really want to thank each and every one of 
you for participating, and I think that you made this 
subcommittee much more prepared to deal with this particular 
issue. And I hope that this will translate--and I know that it 
will--translate into us being much more sensitive and much more 
vigilant and helpful and in partnership with the FTC as we move 
forward.
    We have to help solve this problem for the American 
consumer, and you have really been pivotal in bringing us to a 
solution. Thank you so very much, and Godspeed to each and 
every one of you. Thank you. The subcommittee stands adjourned.
    [Whereupon, at 12:50 p.m., the subcommittee was adjourned.]
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