The Federal Trade Commission Goes Green

1. The Federal Trade Commission Goes Green Energy Information for Consumers By Dee Pridgen

2. Federal Trade Commission • Primary national consumer protection agency • Founded in 1914; consumer protection mission launched in 1930’s • Regulates “unfair and deceptive trade practices” • History of truth in advertising and comparative information disclosures, such as Truth in Lending • Philosophy of providing information rather than price regulation also guides FTC actions in energy and environmental sectors

3. FTC Initiatives on Consumer Info ~ Energy/Environment • Appliance Labeling Rule, updated in 2007 • R-Value Rule, rating home insulation products • Fuel Rating Rule (Octane, Alternative Fuels & Biodiesel) • Labeling for Alternative Fueled Vehicles • Fuel Economy Advertising Guides • Environmental Marketing Guides (currently under review)

4. FTC Appliance Labeling Rule • Provides comparative information to consumers on energy costs for appliances • Covers refrigerators, freezers, dishwashers, water heaters, clothes washers, furnaces, air conditioners, and fluorescent lamp ballasts • Aimed at aiding comparison shopping, promoting market for more energy efficient products

5. FTC Appliance Label Revisions • Initially passed in 1979, recently updated pursuant to mandate of Energy Policy Act of 2005 • FTC consumer research showed that consumers preferred comparative operating costs as best way to communicate energy performance in the marketplace • Revised labels emphasize comparative operating costs, rather than comparative energy use

6. How to Use the EnergyGuide Label View Printable Version >>

7. FTC R-Value Rule Passed in 1979, updated 2005 Requires R-value labels or fact sheets for home insulation products Applies to manufacturers, installers, retailers and new home sellers Higher R-value equals higher insulation value; measures resistance to heat flow Purpose to allow consumers to compare insulation on basis of heat-resistance, rather than thickness alone, which can be misleading

8. FTC Automotive Fuel Ratings • 1979 – Octane Ratings • 1993 – Ratings expanded to include Alternative Liquid Fuels (methanol, ethanol, liquefied natural gas, and coal-derived liquid fuels) • Alternative fueled vehicles also have labels • 2008 – Ratings expanded again to include Biomass-based diesel and biodiesel fuels

9. FTC Fuel Economy Advertising Guide • Fuel economy claims in ads for new automobiles trigger certain disclosures • Disclosures use EPA city/hwy estimates • Standardized measurement of fuel economy facilitates comparison shopping for vehicles

10. FTC Guides ~ Environmental Marketing Claims • FTC “green guides” established in 1992 • Combined with stepped up deceptive advertising cases • Cover general principles and specific claims such as degradable, recyclable or recycled, ozone safe and environmentally friendly

11. FTC adjudications on deceptive environmental ads • 1979 Standard Oil – misleading fuel emission reduction claims • “degradable” plastic trash bags • Bunnies disposable diapers – decompose “before your child grows up”? • “Earth-Smart Laundry Solution”

12. 21st Century – new emphasis on energy saving claims • Cases against Fuel Max & other gas saving devices • “liquid siding” insulation • Engine additives • Ongoing review of “Green Guides” to consider renewable energy, sustainability, carbon offset and renewable energy claims • Updating rule on labels for light bulbs