WeBuyItGreen Blog

Are Republicans Vulnerable on Offshore Drilling?

Jay Kilby — Sun, 24 Aug 2008 10:11:31 GMT

By WeBuyItGreen: promoting green living and fair trade

It is no secret that Republicans currently have the upper hand in the battle for public opinion on the issue of offshore drilling. Faced with skyrocketing gasoline prices that pose a genuine threat to their standard of living, Americans are quick to embrace any policy that appears to promise relief. Democrats, intimidated by the public mood and apparently ready to “compromise” on the issue, may be missing an important opportunity to go on the offensive, but leadership from the Obama campaign would be needed to pull it off.

Key Democrats, including House Speaker Nancy Pelosi and longstanding Colorado environmentalist Mark Udall, have signaled their intent to back down to President Bush’s call for offshore drilling as a solution to the energy problem. This strategy will allow the Democrats to avoid the fallout of American wrath over the high price of gasoline. With the election around the corner, feeling that they have an edge as long as they make no major blunders, the Democrats are “playing it safe.”

However, the facts indicate that offshore drilling will bring no relief in gasoline prices. According to the Department of Energy, “access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.” Pelosi had it right when she referred to offshore drilling as a solution to our energy problems as “just a hoax.” McCain had it right in 2006,
when he said that offshore drilling, “would not have an immediate effect on gasoline prices.” Therefore, in the long run, the current Democratic strategy will be viewed as another instance in which Democrats did not have the backbone to lead.

Alternatively, Democrats could go on the offensive. McCain’s appeal is largely about “integrity,” projecting an image of someone who does not cave in to pressure and has been willing to battle powerful interests, citing his leadership in opposing pork barrel spending. But properly advertised by the Obama campaign, McCain’s position on offshore drilling could seriously damage the “integrity” image. On this issue, he is vulnerable to not only the “flip-flopping” accusation, but also the claim that he is intentionally misleading the American people. An effective, widespread ad campaign by Obama could make the case that offshore drilling will not help the American people, and that John McCain knows that.

On August 19, Senator Edward Markey, Chairman of the House Select Committee on Energy Dependence and Global Warming, sent a letter to President Bush, pointing out the following facts. American oil companies currently export one tenth of the total oil consumed in the U.S. annually. U.S. oil exports increased last year from 1.433 million barrels a day to 1.806 million barrels a day. The amount of oil (200,000 barrels a day) projected by the Energy Department to be produced from the administration's offshore drilling solution by 2030 at the height of production is only one ninth of the amount of oil U.S. companies currently export each day. The Democrats need to drive home the key point that although offshore drilling is being promoted by the Republicans as a solution to American gasoline prices, that oil will be owned by global companies, not the American people.

The Republicans have succeeded in simplistically associating offshore drilling with relief at the gas pump. The Obama campaign has an opportunity to attack this notion as a lie to the American people and to continue to point out that McCain’s campaign has strong connections to the oil industry, calling into question McCain’s “integrity” appeal.

In September, Republicans can block the annual extension on the ban on offshore drilling without Democratic support. But with an effective attack, revealing the truth about the effects of this policy, Democrats can benefit in November, turning the Republican position to their favor.

However, this opportunity will be lost if Pelosi and other leading Democrats back down on offshore drilling. Obama cannot mount a strong attack on the issue if leading Democrats associate themselves with it. He will require Democratic unity in order to show that he can lead on this issue.

Fair Trade, Direct Trade, or Starbucks’ C.A.F.E. Practices: Who Serves the Best Cup of Clear Conscience?

Jay Kilby — Mon, 18 Aug 2008 17:07:48 GMT

By WeBuyItGreen: promoting green living and fair trade

This is our fifth and final segment in a series that compares three alternatives in the “ethical coffee” market: fair trade, direct trade, and Starbucks’ C.A.F.E. practices. Part one in the series explains how conditions in the traditional coffee market initially gave rise to fair trade coffee. Part two explains what fair trade means. Part three explains what direct trade coffee is. Part four explains Starbucks’ C.A.F.E. practices. The latter three articles also address criticisms of each of these types of “ethical coffee.” What follows below is a set of conclusions which, while intended to be understandable if read in isolation, does rely on the preceding articles for supporting argument and evidence.

Having explored in some detail each of these three options in the “ethical coffee” market, what conclusions can be drawn for the responsible consumer? Which bag of beans should we reach for, knowing what we now know based on the research cited in the first four articles in this series?

Before answering, let me first clarify my own point of view. I am not an expert or professional within the coffee industry. I don’t work for Fair Trade, a direct trade roaster, Starbucks, or any other player in this business. Rather, I am a coffee consumer.   I have taken a fair amount of time to research whatever credible sources I could find on the internet on this subject, and as an additional resource for these articles, I have interviewed via email spokespersons for fair trade, direct trade, and Starbucks.

Based on the arguments and evidence put forward in the first four articles, the most important point to recognize is that all of these options (fair trade, direct trade, and Starbucks’ C.A.F.E. practices) are much better than the traditional free trade coffee market. I have been, to put it mildly, unimpressed by arguments that free trade, unencumbered by consumer sympathy for the plight of the coffee grower, is best for everyone, including farmers.

I do understand why free trade on a global scale is important. Through the principle of comparative advantage, trade can help all boats to rise in the global community. I oppose protectionism, such as U.S. and European farm subsidies. But the free trade argument against fair trade is fundamentally flawed.

The major argument put forward by free trade opponents of fair trade is that it artificially raises the price of coffee, which will increase supply as more producers try to enter the market to take advantage of the higher price. This, the argument goes, will lead to a glut in the market for ordinary coffee, causing prices to plummet and hurting traditional coffee growers.

However, this argument makes a fundamental error in associating fair trade with the use of non-market forces to regulate price. Putting the fair trade label on a product simply gives it a distinguishing characteristic that the consumer can then choose, or not, according to preference. When consumers choose coffee with the fair trade label, they are expressing a preference for a particular type of coffee. There is no reason that this should cause the price of all coffee to rise. Rather, it should simply express increasing demand for fair trade coffee and therefore raise prices only for this type of coffee. We wouldn’t expect an increased demand for premium quality coffee or vanilla flavored coffee to lead to an increase in price for a basic can of Folgers Classic, so why would an increased demand for fair trade labeled coffee do so?

The effect of increased demand for fair trade coffee should theoretically be that more coffee farmers seek fair trade certification so that they can take advantage of the fair trade price. Qualification for fair trade certification includes the stipulation that coops applying for certification must demonstrate that there is a market for their product. So as demand for fair trade rises, what we can expect to see is more small farmers in the traditional market moving into the fair trade market, not more farmers moving into the traditional market where prices remain relatively low.

One article, which appears in the Christian Science Monitor, not only makes the above free trade supply/demand argument, but also adds the assertion that buying shade grown coffee is a good alternative because, unlike fair trade, it expresses a legitimate consumer preference for a particular type of coffee. I have no idea why the author thinks that shade grown coffee expresses consumer preference for a particular type of product, but fair trade does not. The author does not even seem to recognize that ecological sustainability through use of shade and other practices is one of the criteria used to determine whether coops qualify for fair trade certification. This sort of argument leads me to believe that some people embrace free trade more as devotees of a religion rather than as proponents of a theory who are genuinely interested in gauging whether the theory coherently explains actual facts.

What can we conclude from actual evidence on the ground about the impact of fair trade? First, I admit that I am unaware of any independent, statistical studies with a sample that is broad enough to give us a clear picture of the economic impact of fair trade on the industry as a whole. If such studies exist, I don’t believe they are yet available for wide public consumption. However, as cited in our Fair Trade Coffee article, The University of Colorado Fair Trade Research Group did do a study of several fair trade cooperatives in Mexico and concluded that they were doing considerable good for farmers. This evidence indicates that traditional farmers recognize the benefits of fair trade and are waiting to become certified as demand for fair trade coffee rises.

I am not aware of any evidence to support the idea that fair trade is causing oversupply or large price drops for traditional coffee growers as forecast by the free trade opponents. Rather, the admittedly limited, reliable, publicly available evidence we do have suggests that fair trade is improving the lives of suppliers.

If it is true that fair trade is actually helping farmers, then what of the other “ethical coffee” alternatives? Which one of these options is best? On this point, I am persuaded by Geoff Watt’s view made in our Direct Trade article that no single “ethical coffee” system can take credit as the best alternative for the socially conscious consumer. Fair trade has certain advantages. It has the best chance of creating consumer confidence because it establishes the greatest distance between people who profit from selling the coffee and the institutions responsible for certifying that coffee is grown in a socially and environmentally responsible manner. People who argue that fair trade is intended to raise profits for “corporations” do not seem to understand that the fair trade system is designed to prevent precisely this sort of influence. That is its greatest asset.

However, direct trade offers certain advantages over fair trade. Fair trade certification comes at a price, and I believe that there are conscientious direct trade roasters that forego the cost of certification while paying a price to farmers that exceeds the fair trade minimum. These specialty roasters seek particularly high quality coffee that can bring a high price, something that fair trade is not in a position to do, because it is the roasters who determine what “quality” coffee should taste like, and it is the roasters who decide when a coffee should bring a price that exceeds the fair trade minimum.

Nevertheless, these specialty roasters are limited in what they can accomplish. In particular, they are not able, as is fair trade, to convince larger players in the traditional market, such as Kraft, Nestle’, or Proctor and Gamble, that they should embrace socially and environmentally sound practices. Fair trade has the best chance of convincing these large corporations that they can benefit by entering a growing “ethical coffee” market. It is important to remember that the amount of coffee purchased through all three of the systems we are considering (fair trade, direct trade, and Starbucks) is dwarfed in comparison to the coffee purchased by these large corporations that control the traditional market.

So both direct trade and fair trade serve distinct, but worthwhile, purposes. But what about Starbucks? Why have I included them among the “ethical coffee” alternatives?

I understand that fair trade activists have good reason to be suspicious of Starbucks. Like many, I first became aware of fair trade coffee through the film Black Gold, which juxtaposed perky baristas touting the social benefits of Starbucks and Ethiopian farmers earning miserable wages while supplying the beans for those $3 lattes. I am aware of the campaign mounted against Starbucks by Oxfam in its attempt to convince the company to stop stonewalling the Ethiopian governments’ attempts to trademark its regional sources for premium coffees. I am also convinced by an investigative report in the Sacramento Bee, that, as recently as last year, the Starbucks C.A.F.E. program failed to adequately protect workers and the environment on the Gemadro Estate plantation in Ethiopia.

Nevertheless, based largely on Kim Fellner’s Wrestling with Starbucks and the company’s own most recent corporate social responsibility report, I am convinced that on the whole, their C.A.F.E. program is very good for farmers and the environment, and that the company is making sincere efforts to learn from the mistakes it has made in the past on the social responsibility front.

Like the smaller direct trade roasters, C.A.F.E. practices emphasize rewarding farmers who produce quality coffee with prices that exceed the fair trade minimum. But like fair trade, the C.A.F.E. system also attempts to assure consumers through third-party certification that their standards legitimately support farmers and environmental sustainability. There is plenty of evidence that this system has been beneficial to farmers and the environment in some regions, notably Costa Rica.

Starbucks’ own corporate social responsibility report indicates that they are aware that they need to extend this sort of success to other regions, such as Ethiopia. Only time will tell whether the company’s goals for East Africa are simply a short-term PR strategy or reflect a genuine commitment to improve conditions in the region. But it is refreshing to hear a corporation admit to its own shortcomings and pledge to do better. I think they understand that the public holds a company on a fairly short leash when it touts itself as socially progressive and that playing the “ethical coffee” card as a mere PR strategy with no teeth in it will hurt them in the long run.

So which bag of beans will I be buying? I’ll be asking my grocer to carry a wider selection of both fair trade and direct trade. Then I’ll reach for one bag of each. There are, by the way, some absolutely delicious choices in each of these categories, though I have only found them online. I also won’t hesitate to stop for that occasional latte.

Starbucks' C.A.F.E. Practices

Jay Kilby — Sat, 16 Aug 2008 16:48:45 GMT

By WeBuyItGreen: promoting green living and fair trade

This is the fourth part of a five-part series comparing three alternatives to the traditional coffee market for the socially responsible consumer: fair trade, direct trade, and Starbuck’s C.A.F.E. program. Part one explained why fair trade emerged as an alternative to the traditional coffee market. Part two explained fair trade certification and addressed several criticisms that have been made against it. Part three explained what direct trade coffee is.

Starbucks buys more fair trade coffee than any other roaster, purchasing 18 million pounds in 2006 and 20 million pounds in 2007. However, these figures represent only 6% percent of the company’s total green (unroasted) coffee purchases for each of the past two years. By contrast, the company has dramatically increased purchases of coffee grown by producers who adhere to its own “Coffee and Farmer Equity” (C.A.F.E.) standards. In 2007, Starbucks bought 65% of its coffee from C.A.F.E. approved suppliers, and the company intends to increase that amount to 80% by 2013.

What are C.A.F.E. standards?

According to Starbucks’ 2007 Corporate Social Responsibility Report, C.A.F.E. standards focus on four areas: product quality, economic accountability, social responsibility, and environmental leadership.

Requiring participating farmers to produce high coffee quality is one factor that differentiates the C.A.F.E. program from fair trade, which focuses on social and environmental responsibility alone. In this regard, Starbucks is similar to small direct trade roasters in the premium coffee market.

Economic accountability means that all C.A.F.E. coffee purchases must include transparency to the level of the farmer so that contracts clearly reveal what share of the price goes to the farmer and what share goes to other “middlemen” such as exporters. In 2007, Starbucks paid an average $1.43 per pound for its coffee, which was 29 cents over the “C” market price paid on the traditional coffee market. The amount paid to individual farmers varies according to differences in coffee quality, delivery structures, and production costs from one region to another. One difference between C.A.F.E. practices and fair trade is that fair trade publishes a minimum price that all qualifying farming cooperatives will receive, whereas Starbucks does not publish a minimum price. In some regions, such as Latin America where the C.A.F.E. program is firmly in place, Starbucks pays its farmers well. However, in other regions, such as East Africa, this has not been the case; the company is aware of the need to expand its C.A.F.E. practices and improve oversight of their implementation.

Social responsibility means that C.A.F.E. suppliers must protect workers’ rights. For example, participating cooperatives or plantations must pay workers at least the minimum wage and provide safe working conditions. Child labor, forced labor, and discrimination are prohibited. The social responsibility standards cover access to health and education and protect freedom of association, including the right to join a union.

Environmental responsibility means that suppliers must manage waste, protect water supply and quality, and conserve energy. Farmers must protect the local ecosystems through use of shade and limiting their use of agrochemicals.

These standards are broken down into measurable criteria and over 200 published indicators that are used to evaluate suppliers according to a three-tiered point system. Participants that achieve a score of less than 60% in each of the social and environmental areas are designated as “verified suppliers.” “Preferred suppliers” achieve scores of 60%-79%, and “strategic suppliers” achieve scores of 80% or higher. This is an incentives-based system in which farmers are rewarded for achieving higher scores.

Is this Independent Verification?

Are the standards used to evaluate the company’s performance developed and applied by the company itself or independently verified as is the case with fair trade labeling?

Starbucks has included independent stakeholders in the development of the standards and their application in the field. They contracted with Scientific Certification Systems (SCS), an independent certification and auditing service for agricultural products. In order to create C.A.F.E. standards, SCS got input from coffee suppliers, Fair Trade, the Rainforest Alliance, and Conservation International. However, SCS does not directly verify or inspect plantations to determine whether they are in compliance with C.A.F.E. standards. According to a November, 2007 investigative report in the Sacramento Bee, it is common practice for plantations to hire companies that carry out the verification process. In Wrestling with Starbucks, Kim Fellner reported that the Rainforest Alliance provides many of Starbucks’ verifiers. In any case, SCS is responsible for providing oversight, training, accreditation, and auditing of verification organizations in order to ensure that the inspectors in the field are doing quality work.

Criticisms of C.A.F.E.

One criticism that has been leveled against Starbucks is that it is not producing enough fair trade coffee. As noted above, although the company is the largest purchaser of fair trade beans, the percentage of fair trade coffee that it buys has remained steady at 6% the past two years. Why is that figure not increasing?

One reason is that some cooperatives that qualify for fair trade certification do not fulfill Starbucks’ C.A.F.E. requirements. In a response to questions that I sent via email, Nicole Fallat, a spokesperson for Starbucks, replied that unlike fair trade, C.A.F.E. includes standards for coffee quality. Moreover, whereas fair trade requires economic transparency down to the level of the cooperative, Starbucks would like fair trade to extend transparency to the level of the individual farm.

A second reason that Starbucks is not expanding its fair trade more rapidly is that it buys much of its coffee from farms that are too large to qualify for fair trade certification. Fair trade currently certifies only small coffee farmers who belong to cooperatives. C.A.F.E. verification is open to all farms regardless of size.

Finally, Starbucks’ most recent Corporate Social Responsibility report stated that the company’s purchase of fair trade coffee has kept pace with consumer demand. This may indicate that the company’s decision about how much fair trade coffee to buy is related to how quickly consumer demand for fair trade grows.

The above-mentioned Sacramento Bee report raises a second criticism of Starbucks—that their actual practices in some regions do not live up to C.A.F.E. standards. The report identifies a plantation in southwestern Ethiopia, the Gemadro Estate, which produced one of Starbucks’ premium “Black Apron Exclusive” coffees. This coffee was packaged with a flier which claimed that the Gemadro Estate was maintaining “the highest standards of social and environmental stewardship.” However, Tom Knudson, the author of the article, reported that workers were being paid as little as 66 cents a day, an amount considered by the U.S. State Department to be below a livable wage. Knudson also learned that workers were housed in rusty metal shacks and that the conservation practices of the estate came up short, using non-native trees that would change the composition of the native ecology within a rapidly shrinking rain forest.

Knudson’s article identified the point at which the C.A.F.E. program broke down in this case. The plantation hired an Africa-based company to do the inspections for C.A.F.E. verification, and SCS did not properly oversee the verification. Ted Howes, vice president of corporate social responsibility for SCS, admitted that the inspection was inadequate, and after Knudson inquired about the verification process, the inspector was fired.

In its 2007 Corporate Social Responsibility Report, Starbucks stated that the company would be evaluating data “to understand regional differences, where improvements or more training and support are needed, and how best to continue expanding C.A.F.E. Practices in East Africa and Asia Pacific.” I asked Nicole Fallat if this goal is related to the problems in Ethiopia cited in the Sacramento Bee report. While she did not address the specifics cited in the article, she did respond that Starbucks intended to double its purchases from East Africa from 2006 levels by 2008 and that Ethiopia would play a significant role in that. The company intends to open Farmer Support Centers in East Africa by the end of 2008, and according to Ms. Fallat, these centers will be “integral to successfully implementing C.A.F.E. Practices in the region.” The company appears to be aware that while its C.A.F.E. program has achieved success in places like Costa Rica where it was initially developed, challenges remain in the less developed, more remote regions of East Africa.

A key issue is whether Gemadro was an isolated case or reflective of systematic problems with C.A.F.E. practices. Knudson reported that Dennis Macray, Starbucks’ director of corporate responsibility, commented that the sorts of problems Knudson identified at Gemadro, “can happen in any kind of a system.” Some activists may maintain that because Starbucks employs SCS to monitor verification, the independence of the process is compromised and, therefore, cannot achieve the same degree of consumer confidence as fair trade certification. However, as we pointed out in an earlier article, mistakes are made within the fair trade certification process as well. It does seem to be the case that there will be abuses in any system that attempts to monitor social and environmental responsibility on farms in remote regions. As with fair trade, on the whole, C.A.F.E. practices are a vast improvement over the traditional coffee market.

What Is Direct Trade Coffee?

Jay Kilby — Sun, 10 Aug 2008 10:10:50 GMT

By WeBuyItGreen: promoting green living and fair trade

This is the third article in a five-part series that compares fair trade coffee, direct trade coffee, and Starbucks' C.A.F.E. program. The first article in the series, Why Do We Need Fair Trade Coffee?, explained how conditions in the traditional coffee industry gave rise to fair trade coffee. The second article, Fair Trade Coffee, explained how fair trade differs from the traditional coffee market. It also addressed several criticisms of fair trade.

In addition to fair trade, direct trade has emerged as an alternative contender for the ethical coffee market. Direct trade coffee is similar to fair trade insofar as it seeks to provide a fair price for small farmers and encourage them to develop sustainable, ecologically responsible practices. As does fair trade, direct trade eliminates advantages that "middlemen" have over farmers in the traditional coffee market.

Geoff Watts, the Director of Coffee and Green Coffee Purchaser for Intelligentsia Coffee, has been a prominent spokesman for direct trade. In response to questions that I sent Mr. Watts via email, he explained that the problem with middlemen in the coffee industry is not that they are necessarily bad. They can perform valuable functions. Rather, the problem is that in the traditional coffee market, they often take advantage of the farmer's lack of knowledge about the market, lack of access to multiple buyers, and lack of capital resources. Middlemen often use these disadvantages facing the farmer in order to extract a greater share of the coffee retail price for themselves. For example, a "collector," traveling to remote areas to collect the coffee cherries and transport them to mills or exporters, may offer cash to farmers who have little alternative but to accept the offered price. The farmers do not have the financial resources to buy equipment to mill their cherries or hold them until a better price is offered, and they are not in communication with alternative buyers. So collectors often buy the cherries at the lowest possible price and, of course, try to sell at a relatively high price.

Direct trade roasters remedy this situation by first negotiating a fair price with the farmers, and then negotiating additional costs to be paid to whichever middlemen have a legitimate function to play in bringing the product to market. All are party to a common contract that stipulates how much will be paid at each stage in the process--including farmers and all other intermediaries deemed necessary, such as a collector, miller, exporter, and importer. In the fair trade or direct trade system, farmer coops are sometimes able to get financing to buy a truck for transporting the cherries to a mill themselves, eliminating the need for the collector. Some farmers may also buy their own milling equipment, thereby acquiring another link in the production of coffee and retaining the corresponding portion of the retail price. Whether particular farming coops are able to profit from taking over these intermediate steps depends upon how efficiently they operate. But when roasters negotiate directly with farmers on price and assure transparency in contractual relationships with all intermediaries, this eliminates much of the abuse suffered by farmers in the traditional market.

One distinction between fair trade and direct trade is that direct trade roasters pay a premium price above the fair trade price for high quality specialty coffee. Whereas fair trade certification assures that farmers will receive a minimum price, any margin above the minimum cannot be guaranteed by fair trade organizations because they do not negotiate these margins. Roasters do. Direct trade specialty roasters such as Intelligentsia seek premium coffee quality that brings a high price on the retail market, and they generally pay farmers 25% or more above the guaranteed fair trade minimum, rewarding farmers who live in the right climate and develop the right skills necessary for growing premium coffee.

Direct trade roasters can also become fair trade certified. However, Intelligentsia has chosen not to seek such certification and save the expense of the certification licensing fee charged to roasters. In the past, this fee amounted to 10 cents/lb, but now varies, depending upon a sliding scale related to volume purchased and other factors. Intelligentsia claims that they are able to pass on this savings from the licensing fee to their farmers by including it in the premium price that they offer.

Nevertheless, Mr. Watts is not suggesting that direct trade should replace fair trade. He believes that fair trade coffee performs at least two important functions. First, by widely publicizing abuses in the traditional market, assuring participating coops a minimum price, and placing a certification label on products, fair trade organizations have made consumers conscious of the impact their choices have upon farmers. Secondly, by influencing consumer choice, fair trade is beginning to have an impact on the broader coffee market, where the bulk of coffee is produced and sold. As large retailers such as Sam's Club and Dunkin' Donuts sell more fair trade coffee to meet consumer demand, larger players in the traditional coffee market, such as Nestle', Kraft, and Proctor and Gamble, may begin to move increasing portions of their coffee into the fair trade market, thereby affecting a much larger group of farmers than those select few who produce premium coffees for the specialty market.

Watts is less enthusiastic about the role that fair trade plays in the specialty market. In this market, he believes that direct trade roasters can work with farmers to create a high quality product and reward them with a price significantly higher than the minimum fair trade price. If that is the case, then why should farmers and roasters selling premium coffee pay additional costs for fair trade certification?

On this point, I believe that proponents of fair trade would argue that independent third-party organizations such as Transfair USA are better able than roasters to convince consumers that their judgment is unbiased, providing greater assurance to consumers that the products they are buying meet standards that contribute to the public good. These standards not only assure a minimum price paid to farmers, but also require that participating coops embrace democratic procedures and use a portion of their coffee revenue (a social premium) for programs that will provide long-term benefits for the community, such as improved health and educational facilities. They also provide assurance that the producers are using farming techniques that protect the environment.

It is true that direct trade roasters embrace similar goals. Intelligentsia requires that producers who meet their direct trade standards promote healthy environmental practices and be committed to sustainable social practices. The question is whether consumers will feel that they can trust roasters as much as an independent, third-party organization like Transfair USA to assure that such criteria are being met.

For example, can the consumer trust that coffee roasters will encourage its producers to protect the environment in the absence of third-party certification? In an article in which he discusses this issue, Mr. Watts convincingly argues that environmental standards must be considered in the context of the economic needs of particular farming communities. In some cases, it is better to use fertilizers to boost crop production so that farmers can increase their yield enough to climb out of poverty. The economic benefit gained in these cases outweighs the costs to the environment created by use of fertilizer. Similarly, costs and benefits must be weighed in making judgments about the types of shade that should be required on particular coffee farms. The question is whether the consumer can have confidence that roasters will make the best judgment calls in these particular cases. Or will their financial interests bias their judgment in some cases in favor of larger yields of high quality coffee at the expense of the environment? Fair trade advocates would argue that third-party certification creates greater consumer confidence that such judgment calls will remain unbiased.

This does not mean that fair trade never fails in its attempt to inspire confidence that its standards are being met. Clearly, there will be abuses and transgressions in any system that attempts to hold small farmers living in remote regions accountable to particular standards. Rather, the question is which system is best suited to guard against such abuses. Proponents of fair trade would maintain that independent, third-party oversight is needed.

Moreover, "direct trade" is not a uniform set of standards or principles. It is a pledge made by individual roasters regarding their way of doing business, and its meaning may vary from one roaster to the next. If a consumer reads "direct trade" on a product, the meaning of the phrase will depend upon the particular roaster selling the product. It will be up to the consumer to determine what "direct trade" signifies by educating himself about the particular roaster using the phrase.

There is no simple answer as to whether fair trade or direct trade is the better alternative for the socially responsible consumer. As Mr. Watts said in his response to my email, "I think that what we need to avoid is to give too much credit to ANY system as being the principle agent of change . . . the coops that have grown and improved and are producing better coffees than before are the ones that have had good leadership on the local level, the ones with good vision and strong ethics. My feeling is that many of these would succeed with or without DT [direct trade], FT [fair trade], or any other type of system."

Each of these systems offers advantages over the other. Direct trade is able to reward coffee quality with a higher price than that paid by fair trade. Fair trade offers the simplicity of a label that has consistent meaning, providing assurance to the consumer through independent third-party certification that minimal standards protecting the farming community and the environment are being met. Both options are contributing to considerable improvements over the traditional coffee market.

Fair Trade Jewelry and Textiles from Pachacuti

Jay Kilby — Wed, 06 Aug 2008 19:45:22 GMT

By WeBuyItGreen: promoting green living and fair trade

The factual information below about Pachacuti was provided by the company. Pachacuti is a member of Coop America and the Fair Trade Federation.

Carol Stengel is the owner of Pachacuti, a business that sells fair trade jewelry and textiles. She buys products from artisans who live in the small coastal towns and highland villages of Mexico. Juan Quezada, one of these artisans, imitates the 1000-year-old pottery techniques of the Paquime Natives. His work so closely resembles the ancient shards they left behind that upon discovering his pieces in a secondhand store in 1976, anthropologist Spencer MacCallum mistook them for originals.

In February, Carol joined a weavers tour with Traditions Mexico in order to visit some of these artisans. There in the Mayan highlands, she met Dona Maria, who lost her husband and infant son many years ago. There were difficult years as she tried to raise her older, surviving son alone, years without enough food, land, or money. But she was able to manage through income from weaving textiles. She said, “I work at this and that and I don’t earn a lot of money, but at least I have [enough] to buy beans and corn and meat.” In a small town in southern Mexico, Carol met Dona Justina, who learned to weave at age eight and is still at it at age 76, using shellfish, tree bark, and other natural material to create the dyes for her work.

For Carol, selling the work of these artisans is much more than a source of income. Both entrepreneur and Spanish teacher, she contributes part of the profit from her business to Latino scholarship programs. This year, Pachacuti has begun work on a weaver’s scholarship for secondary students in Rock Point, AZ as an incentive for adolescents to continue learning traditional Navajo crafts, pairing Navajo elders with students in a mentoring relationship. Carol is keenly aware that the pieces she sells embody personal history, relationships to people and nature, and cultural heritage, remarking that, “So much of what we do in fair trade is . . . soulful. Fair trade businesses provide the economic support needed for cultural and spiritual survival—one family, one village at a time.”

As Dona Justina's visitors were preparing to leave and move on to their next destination, the elderly artisan asked, “When will you be back?” Carol explained the significance of Dona Justina's question to me in an email, saying, “Everything and everyone stopped. Her words hung heavily in the air. If tourists do not come to her remote village, there is no money. If there is no money, there is little food.”

Fair trade businesses like Pachacuti create a link between artisans like Dona Justina and the outside world, providing basic necessities for the artisans and enriching the rest of us with beautiful traditions that have been handed down for centuries.

These are a few samples of the fair trade jewelry and textiles Carol has available. You will find more at Pachacuti.

Fair Trade Coffee

Jay Kilby — Tue, 29 Jul 2008 13:18:09 GMT

By WeBuyItGreen: promoting green living and fair trade

This is the second article in a five-part series that examines three alternatives for the socially responsible coffee drinker: fair trade, direct trade, and Starbuck’s C.A.F.E. program. There are other labels such as certified organic, Rainforest Alliance certified, and UTZ certified coffee. If you would like an overview of these and other certification labels for coffee, they are nicely explained in a recent article entitled Making Sense of Certification. The three alternatives to be addressed in this series are major contenders in the specialty coffee market that claim to provide both a fair price for the farmer and environmentally sustainable practices.

Our previous article in this series, Why Do We Need Fair Trade Coffee?, explained how the traditional coffee market originally gave rise to the fair trade alternative. To briefly summarize, after a quota system for controlling coffee supply and price was abandoned in 1989, and Vietnam entered the coffee producing market, supplies increased and prices dropped dramatically. Mergers and acquisitions created a handful of large transnational corporations that roast and trade the coffee; these large companies were able to survive the decline of coffee prices through increasingly sophisticated investment strategies. However, the small farmers who produce coffee were devastated by the price drop. Fair trade, direct trade, and Starbuck’s C.A.F.E. program all attempt to address this critical problem by offering consumers the option to select coffee produced by farmers who are receiving enough compensation to meet their basic needs.

Fair trade standards for coffee as well as a number of other products are established by the Fairtrade Labelling Organization International (FLO), a non-profit association that includes 20 labelling organizations, three producer organizations, traders, and independent consultants. Transfair USA is the member organization of the FLO that certifies products in the United States. The purpose of FLO standards in the coffee industry is to create opportunity for economic and social development among small farmers and farm laborers who are disadvantaged in the traditional market and to require sustainable farming practices that protect the environment.

In order to qualify for the fair trade label, small farmers must participate in democratically organized cooperatives that 1) provide safe working conditions, transparency in business planning and use of funds, and a living wage for workers, 2) prohibit child labor and discriminatory practices, 3) invest in the development of the community, for example, by funding health care, education, or training to improve coffee quality or obtain organic certification, and 4), preserve natural ecosystems and promote sustainable farming methods that limit use of agrochemicals and prohibit genetically modified organisms.

Importers using the fair trade label must guarantee a minimum FLO-established price or pay the world market price, whichever is higher. The current FLO minimum price for washed Arabica coffee is $1.25 per pound plus an additional 10 cents for a social premium and an additional 20 cents if the coffee is certified organic (a certification established by other organizations such as the U.S.D.A. for U.S. imports). The social premium is intended to cover costs for the community development programs mentioned above. In addition, importers must offer pre-financing equal to 60% of the contract if the cooperative requests it. Finally, importers must purchase as directly as possible from producer groups rather than middlemen, such as exporters, international traders, and brokers who have played a significant role in the traditional coffee market.

A number of criticisms have been leveled against the fair trade system. One criticism, most notably expressed in the December, 2006 issue of the Economist, is that fair trade will fail to achieve its objective because it ignores basic free market principles regarding supply and price. The argument runs as follows. By artificially establishing a minimum price for coffee, fair trade will cause producers to grow more of it to take advantage of the higher price. However, this increased supply of coffee will cause the price on the traditional market to fall, thereby creating a worse situation for farmers who are not participating in fair trade. If the problem with the traditional market is that prices are too low, then the appropriate response is not to create a price support, but rather, to allow market forces to run their course, meaning that coffee growers who are unable to make a living under current conditions should diversify and grow other crops or seek other options for their livelihood.

I believe this argument is flawed for the following reasons. It is important to recognize that there are significant differences between the fair trade minimum price and other forms of price support that interfere with free trade.
For example, consider the difference between fair trade minimums and U.S. farm supports, which are sustained through political influence rather than consumer choice. American farmers in Midwestern states have had sufficient political power to assure that their Senators sustain farm subsidies. These subsidies allow U.S. farmers to sell their products on the global market at such low prices that farmers in other countries, such as Mexico, cannot hope to compete and are losing their farms. If the subsidies were dropped, that would undeniably create serious difficulties for American farmers, but chances are good that most would find alternative means of surviving in the American economy and that they would be in a better position to meet their basic needs than are Mexican farmers who are currently losing their farms because of the subsidies. Therefore, if these price supports were dependent upon consumers choosing a label certifying that farm products are U.S.-made, chances are slim that consumers would buy them out of a sense of social responsibility.

By contrast, consumer demand rather than political influence is driving the support for a fair trade minimum price. This is similar to paying a bit more for a product that tastes better, only in this case, consumers are choosing to pay a bit more for a product that allows producers to meet basic needs and protect the environment, something we all depend upon. The fair trade product is different from the traditional product. When consumers choose the fair trade label, they are increasing demand for fair trade coffee, not traditional coffee. Therefore, coffee farmers will be interested in increasing their supply of fair trade coffee only. The supply of traditional coffee should not increase, and therefore, the price should not decrease.

The free trade advocate might respond that as consumers switch to fair trade coffee, the demand for traditional coffee will decline, and this will cause a decrease in the price for traditional coffee. However, as demand increases for fair trade, more farmers will see the value in fair trade, seek certification, and convert from traditional coffee production to fair trade production, thereby decreasing the supply of traditional coffee as the supply of fair trade increases. As demand for traditional coffee drops (creating pressure toward a price decrease), so should supply (creating countervailing pressure toward a price increase). The liklihood of this scenario is indicated by the fact that currently, coffee farmers in the traditional market are lined up and waiting for fair trade certification. In order to obtain certification, cooperatives must demonstrate that there is a market for their product, so the supply of fair trade producers can expand only as fast as consumer demand for fair trade.

Finally, let’s consider the free market argument that if the price of coffee is too low to make a living, coffee growers should diversify and grow other crops instead. That might be a viable alternative if farm supports in northern countries were dropped, allowing coffee farmers to convert, for example, to corn production. However, until that happens, diversification is not a realistic option for most. Rather, under recent market circumstances, the low coffee price has forced farmers into extreme poverty, migration to urban slums, and illegal migration to the north. Where crop diversification takes place, it often involves conversion to narcotics such as khat (Ethiopia) and coca (Columbia and Peru) because these are the only viable alternatives. In fact, free trade is a more likely path to economic diversification because it creates conditions that make diversification possible, such as education for children, training in running local businesses, and higher incomes that can support them.

A second criticism of free trade coffee is that it is failing in its promise to provide assurance that producers are being paid well and are protecting the environment. In 2006, the Financial Times reported several incidents in Peru in which laborers working on fair trade certified farms were being paid below the minimum wage in violation of certification standards. It also reported that at least one fair trade association had been illegally farming in protected national forest and that the fair trade label has been falsely applied to some coffee beans that were not fair trade certified. It is unclear whether these cases are anomalous or widespread.

This is fundamentally a criticism of the fair trade inspection process. Fair trade inspection is carried out by an independent organization called FLO-Cert which is responsible for insuring that the certification process is credible. FLO-Cert audits the organizations that seek fair trade certification, reviewing documents and conducting on-site visits and interviews. The Financial Times report calls into question whether these inspections and on-site visits are sufficiently frequent and thorough to maintain the credibility of the fair trade label.

This problem is related to a third criticism of fair trade, namely, that it is too costly. According to the 2006 certification fee schedule (the most recent published on the Transfair USA website), coffee roasters pay 10 cents per pound for certification of fair trade coffee. Producers pay $2500 to $10000, depending on the size of their organization, to cover costs for inspection and certification, with discounts of up to 35% for very small groups and a 10% discount for groups that are already certified organic. These producer fees were not charged until 2004, but became necessary as applications for certification increased and FLO saw a need for more frequent inspection. Consumers are sometimes disillusioned to learn that the entire amount they are paying for the fair trade label is not going to farmers. However, it is not possible to offer frequent and reliable inspection of remote farms without incurring costs.

Geoff Watts, the Director of Coffee and Green Coffee Purchaser for Intelligentsia Coffee, points out that without the burden of certification costs, specialty coffee roasters can buy directly from farmers and pay them a higher price than that offered by fair trade. We will consider this “direct trade” alternative in more detail in our next article. At this point, let’s acknowledge that fair trade is faced with the ongoing problem of balancing opposing demands to maintain the reliability of its certification label on the one hand and to keep certification costs down on the other.

Watts makes a fourth criticism of certification programs like fair trade—that they lack flexibility and fail to reward coffee quality. He argues that the fair trade model works well for entry-level specialty coffees and attracting large retailers to the “ethical coffee” fold, but that it fails to pay farmers a premium price for higher quality coffees capable of fetching $20 or more per pound on the retail market. In this respect, he believes that direct trade roasters are better than fair trade at cultivating relationships with specialty farmers and helping them to produce high quality coffee for which they will receive a price 25% or higher than that offered by fair trade. Again, we will consider the merits of the direct trade alternative in our next article.

Fair trade is an evolving model. It must meet ongoing challenges that include not only the problem of maintaining reliability, keeping costs down, and rewarding high-quality producers, but also encouraging farmers to take a more active role in management of their cooperatives and effectively using the social premium paid by fair trade to create programs that will benefit the community.

Nevertheless, there is plenty of evidence that fair trade is creating substantial benefits for farmers and has been much better for them than the traditional coffee market. In 2003, the Colorado State University Fair Trade Research Group reported the results of research on seven case studies assessing the impact of fair trade on Mexican coffee cooperatives. It found that fair trade was helping farmers. They were receiving double the price that conventional growers were receiving, even after deductions for cooperative management and other expenses were taken into account. This guaranteed price along with lower-cost credit available through fair trade allowed cooperatives to better plan for coffee production as well as family and community needs. Access to training enabled them to improve their coffee quality and learn organic farming as well as sustainable methods for improving soil fertility, conservation, pest management, and harvesting techniques. Cooperatives provided economic assistance to help families cover medical expenses, improve their children’s education, and learn to develop alternative sources of income such as artisanry, community pharmacies, bakeries, and improved production of alternative grains. Communities were able to purchase fuel-efficient stoves to reduce smoke-related respiratory problems and deforestation caused by the use of wood stoves. The study concluded that although there are a number of problems confronting fair trade, “Even the doubters involved in this study acknowledge that once the evidence from all the case studies is combined, the range of benefits is wider and more significant than previously imagined” and that “The most fundamental concern expressed by producers is the limits of the market in the North” (27). In other words, the biggest concern that farmers had was that they need greater demand from consumers for fair trade coffee so that they can sell it.

While fair trade coffee is not without its flaws, it does a much better job than traditional coffee at serving farmers and the environment. But is it better than direct trade or Starbucks’ C.A.F.E. certification? That will be the subject of our next three articles.

Why Do We Need Fair Trade Coffee?

Jay Kilby — Sat, 26 Jul 2008 18:12:05 GMT

By WeBuyItGreen: promoting green living and fair trade

This is the first in a five-part series of articles that compare three alternatives to the traditional coffee trade industry: fair trade, direct trade, and Starbucks’ C.A.F.E. program. However, before we compare these three alternatives to one another, let’s take a look at why fair trade coffee was created in the first place. What conditions in the traditional coffee industry have created the need for fair trade, or some alternative that resembles it?

Over the past fifteen years, prices paid to the small farmers who produce coffee have dropped precipitously. In 2002, Oxfam reported that in real dollars, prices paid to coffee growers had reached a 100-year low, with prices dropping throughout Latin America and Africa. For example, the average price paid to Mexican producers in 1994 was $1.49 per pound. By 2000, the price had dipped to 47 cents per pound. These price declines were not affecting roasters in consuming countries in the same way that they were affecting the producers. In 1970, an average of 20% of total income generated along the coffee chain was retained by producers, with an average of 53% going to consuming countries. By 1995, the proportion of income going to producers had fallen to 13%, while consuming countries were retaining 78%. As green coffee prices on the international market declined by half from 1999 to 2001, the average U.S. retail price dropped by less than 4% (Ponte, 14-15).

Nearly three-quarters of the world’s coffee is grown by small farmers on plots of 25 acres or less. They have born the brunt of the decline in falling prices. The Wall Street Journal reported that this collapse in coffee prices paid to producers was contributing to “societal meltdowns affecting 125 million people” (Fritch, 2002).

What caused this drop in prices and increasing disparity in income generated in producing and consuming countries? From 1962-1989, the production and sale of coffee was regulated under the International Coffee Agreements (ICA’s), to which most consuming and producing countries had agreed. Under this system, target prices were set and export quotas allocated to producing countries. When prices rose above a certain agreed-upon target, quotas (coffee supplies available for trade) were increased to bring the price down, and when prices fell below the agreed-upon standard, quotas were decreased in order to raise prices. The system provided price stability, but was not without problems. Money from coffee had to be spent on state regulatory institutions, quota allocations were sometimes based on politics, corruption was common, and growers often received only a small portion of the export income. However, when the ICA’s were eliminated in 1989, this did not improve the situation for farmers.

Rather, the removal of the ICA’s meant the removal of limitations upon supply. Vietnam entered the coffee producing market in the 1990's, creating a dramatic increase in supply. Prices have dropped, price instability has increased, and there has been a shift of power and wealth from governments and regulatory bodies in producing countries to a small number of transnational corporations that import and roast the coffee in consuming countries.

During the 1980’s, mergers and acquisitions in the coffee industry were encouraged by deregulation under the Reagan administration. By the 21st century, a few major manufacturers controlled over 60% of coffee sales: Nestle’, Philip Morris, Sara Lee, and Procter and Gamble (Talbot, 220-224). Similarly, fewer trading companies acquired greater shares of the business of importing coffee to the consuming countries, with Neumann, Volcafe, ED&F Man, Cargill, and Goldman, Sachs controlling over 40% of world imports by the early 1990’s.

These large corporations have distinct advantages over smaller companies. During the banking deregulation of the 1980’s, the line between large traders and banks became increasingly blurred. Traders became more involved in the commodity futures market and added financial services to their trading practices, while some banks, such as Goldman, Sachs, became importers of commodities like coffee. The resulting large trading/financial institutions were able to quickly move funds from one commodity to another in response to price changes, protecting themselves against volatility and quickly taking advantage of profit opportunities.

During the 1990’s the price of coffee was increasingly driven by speculators investing in coffee futures based on market movement rather than projections of future supply and demand. Access to accurate information and expertise in analyzing data became critical for coffee investors. Success increasingly depended upon rapid interpretation of information about crop forecasts, political conditions in producing countries, trade policies, exchange rates, and market analysis of alternative investment opportunities. The large transnational corporations that now manufacture and trade coffee have distinct advantages in accessing the expertise and information needed to accurately predict changes in price (Talbot, 234-236). Their resources enable them to foresee and profit from temporary price increases, and to predict and hedge against future declines.

However, local farmers who produce the coffee do not have access to these resources for profiting from the commodities market and hedging against price declines. Their cooperatives have difficulty competing with the local subsidiaries of large trading firms (Ponte, 31). The free trade market that now exists in the coffee industry is a system in which a few, large companies can compete and win. But the farmers who produce the coffee are losing badly and cannot hope to succeed without fundamental change. In our next article, we will examine the pros and cons of fair trade as an alternative for improving the livelihood of coffee growers.

____________________________

Fritch, Peter. 2002. "Bitter Brew: An Oversupply of Coffee Beans Deepens Latin America's Woes." Wall Street Journal, Vol CCXL, No. 5: A1, July 8.

Murray, Douglas, Raynolds, Laura T., Taylor, Peter Leigh. 2003. "One Cupat aTime: Poverty Alleviation and Fair Trade Coffee in Latin America." Colorado State University: Fair Trade Research Group.

Ponte, Stefano. 2001. "The 'Latte Revolution'? Winners and Losers in the Restructuring of the Global Coffee Marketing Chain." CDR Working Paper 01.3. Copenhagen: Centre for Research Development.

Talbot, John. 2002. "Information, Finance and the New International Inequality: the Case of Coffee." Journal of World-Systems Research, VIII, 2, Spring 2002, 214-250.

What Else Will Climate Change . . . Assumptions about “Reasonable Behavior”?

Jay Kilby — Mon, 21 Jul 2008 07:32:04 GMT

By WeBuyItGreen: promoting green living and fair trade
Warning: Contains abstract, philosophical discussion that may cause boredom.

Several decades ago, as a young political science student, I was impressed by a little classic called The Logic of Collective Action, by Mancur Olson. Olson explained why large groups of people who share a common interest in securing public goods often fail to act collectively to attain them. For example, consumers may have a common interest in making sure that the automobiles they drive are safe, but for decades, Ralph Nader and a comparatively small group of people had to work very hard in order to mobilize enough public opinion to successfully impose stricter federal safety standards on the automobile industry.

A key underlying assumption in Olson’s book is that people are basically self-interested and that “reasonable behavior” is behavior that enables an individual to achieve his own goals. Olson explains that it is difficult to create public goods in large groups through self-interested behavior because of what he calls the “free rider” problem. This can be illustrated with the automobile safety example. Although it is in the interest of all drivers to assure that they are safe, the average individual consumer has very little power or responsibility for creating federal legislation on the matter. They would have considerable power if they joined together and all became actively involved in a large, common, political interest group, but they don’t do that. Why not? Olson’s answer is that each individual realizes that he would have very little impact or responsibility in such a group, and therefore, he might as well allow others to form the group if they wish. If they achieve their aim, he will be the beneficiary as well. (Hence, the term “free rider.”)

In other words, as with voting, from a purely self-interested perspective, it is reasonable for each individual to think, “Chances are very slim that my input will make a difference in the outcome. Therefore, I will stay on the sidelines and hope that others will fight the good fight for our common goals. If they do, I get what I want without participating. If they do not, my participation will not help anyway.”

If Olson is right, then it will be very difficult for us to achieve the public good of reduced carbon emissions through “reasonable” behavior that is motivated by self-interest alone. If everyone else makes sacrifices in order to reduce carbon emissions, then I enjoy the benefits as well regardless of whether I participate in the effort. And if others do not make such sacrifices, well, my little bit wouldn’t help anyway.

Although many of us may not personally endorse such self-interested thinking, we commonly proclaim that it is “unrealistic” to expect anything more than this from “most people.” One participant on the Daily Kos regarded Chrysler’s decision to offer their customers free gasoline above $2.99 a gallon as a “freaking brilliant marketing move” because Chrysler is motivated to make money, and this marketing campaign is helping them to achieve that aim. Never mind that donating gasoline rather than cash blunts consumer motivation to conserve energy and limit carbon emissions. That is irrelevant when our measurement of intelligent or reasonable behavior is whether the behavior achieves our self-interested goals irrespective of impact on the public good.

I’m intrigued by whether the magnitude of the climate problem might not modify this current, widespread view of reason as motivated by self-interest. John Grant recently wrote a book called The Green Marketing Manifesto in which he argues that future green marketers will not succeed if they simply measure their success in terms of sales and profit. The public is beginning to recognize that climate change is too important to be handled in this manner and will be more responsive to innovative marketing models that create win-win situations that benefit not only companies but also the environment. “Rational” marketing would then require a shift in aim toward achieving not only profit, but also behavior that reduces carbon emissions, a public good.

As histories of philosophical views on reason illustrate, our present perspective on what is considered reasonable is just that—a perspective, subject to change. If the IPCC’s predictions about climate are accurate, many things will be changing in our future. We shouldn’t be surprised if that includes our present notions about “reason."

Fair Trade Cards from Little Works: Art and Compassion in an Envelope

Jay Kilby — Fri, 18 Jul 2008 06:16:00 GMT

By WeBuyItGreen: promoting green living and fair trade

The factual information below about Little Works was provided by the company itself, a member of Coop America that has been certified by the Fair Trade Federation.

On an April day in Namibia, Sarah Paine, a Volunteer Service Overseas products designer, awoke to music. A group of artists-in-training from the small San settlement of Ekoka were singing and ready to begin their workshop. Sarah would be helping the group with oil painting and lithocuts in Etosha, Namibia’s largest game park.

Perhaps the oldest people in the world, the San occupied South Africa about 20,000 years ago. PBS documented the significance of their art in the series, “How Art Made the World," identifying striking similarities between the cave paintings of ancient Europeans and those of the San that were created as recently as 200 years ago. Unfortunately, in the 19th and 20th centuries, the San nearly disappeared altogether, and their current small communities are impoverished and fragile. In 2002, the Rossing Foundation and OMBA Arts Trust hit upon the idea of retrieving the rich San artistic heritage as a means of supporting the community today. They started art workshops, employing people like Sarah Paine to facilitate them, and displayed San art in South African exhibitions.

Another project funded by the Rossing Foundation and the OMBA Arts Trust trains members of the Ononkali community in northern Namibia to make paper that can be used for gift cards. The Onankali paper workshop uses a staple crop in the region, pearl millet, mixing it with recycled paper pulp to create a unique, fibrous paper that is then silk-screened with San designs.

Little Works, a certified fair trade company in the U.S., buys special occasion cards from the Onankali paper workshop as well as from three other small suppliers working in the townships near Cape Town, South Africa. Through their suppliers, they employ eighteen women from the region, paying their South African suppliers more than twice the minimum wage and providing desirable working conditions. In addition, through donations to Deep Roots, a Seattle-based nonprofit, they fund a Girls’ Scholarship Program in Namibia. This year, they sent three young women to the University of Namibia.

If you are looking for cards for a special occasion, you could add a bit more meaning to them by sending the story of the San along with your card. You will be helping people like Tate Simon, who has been able to buy a corrugated roof for his house through the sale of his art, and Filimon, who at the age of fifteen, was able to buy a blanket to keep his mother warm during the winter. Little Works provides an opportunity to support local artisans and their communities, and to help preserve what may be the oldest group of people on our planet.

You can find these beautiful cards online at Little Works. The Namibian cards and several of the South African cards are currently on sale at the gift shop at the Smithsonian National Museum of African Art in order to complement their “TxtStyles/Fashioning Identity” exhibit which runs through December 28.

Gas Giveaways? . . . A Little Common Sense, Please

Jay Kilby — Sat, 12 Jul 2008 15:42:34 GMT

By WeBuyItGreen: promoting green living and fair trade

The latest marketing technique to blaze the American landscape is the use of “free gasoline” to attract customers. Furniture stores, cafes, hotels—you name it—merchants in every sector are offering to give away gasoline to their customers in order to get them in the door. Even nonprofits are getting into the act. The Detroit News reported that the American Red Cross of Southeastern Michigan is offering to enter blood donors in a drawing in which winners will receive free gas cards. According to the Tacoma, WA News Tribune, Tacoma-Pierce County Crime Stoppers are offering $250 worth of gasoline to people who submit a tip leading to the arrest of one of fifty criminals. And this just in . . . the Shady Lady Ranch, a brothel in Nevada, is offering $50 gas cards for every customer who purchases one hour of service . . . no kidding.

Not surprisingly, Chrysler has mounted the largest gasoline giveaway promotion, offering to pay the cost of gasoline above $2.99 a gallon for three years on any vehicle purchased or leased from them. In a 2007 report, the Union of Concerned Scientists ranked DaimlerChrysler as the heaviest polluter among eight major automakers. A consistent opponent of federal regulations that would impose higher fuel efficiency standards on automakers, it is no wonder that Chysler would want to mitigate consumer concerns about the high price of gasoline.

This free-gas marketing craze is truly a triumph of . . . well, let’s be kind and call it uninformed impulsivity. Consider an analogy. A man has a problem. There are two large piles of sand on his living room floor, and he would like to get rid of them. One of the piles represents high gasoline prices. The other represents threats associated with pollution and climate change. His solution? . . . begin shoveling the sand from one pile into the other pile.

There is a silver lining to high gas prices. According to BusinessWeek, there are indications that high prices are finally beginning to change American driving behavior. Certainly we see the impact of price on increasing demand for fuel efficient vehicles. Gasoline giveaways chip away at this silver lining, giving people reason to forestall changing their behavior.

"Inconvenient Truth” and the Political Spectrum

Jay Kilby — Sat, 12 Jul 2008 15:46:21 GMT

The following entry originally appeared in the Portland Oregonian on June 30, 2008.

By WeBuyItGreen: promoting green living and fair trade

For many on both the right and the left, the effects of the truth about climate change are more than inconvenient. They have been personally confusing.

This is not difficult to understand with respect to conservative ideology. Members of the right believe in independent enterprise. Their hero is Ronald Reagan, the great communicator on behalf of smaller government, lower taxes, and less regulation. They identify “green” with CAFE standards, EPA regulation, and those crazy Europeans, who, due to gas taxes, were paying five dollars a gallon during the good old days when a gallon cost two dollars in the U.S. No, the inconvenience of Mr. Gore’s truth is not difficult to understand for this group. But conservatives support business, and “green” is now becoming big business. The prospects for cashing in on this potential may have more impact than any scientific evidence in shattering conservative resistance to the climate change message. Conservatives are trying on a new “greener” set of clothing.

What is less well-understood is that this change is also unsettling for those on the left. They support regulation of business and are deeply suspicious of corporate America. The truth about climate change has unsettled this group for the same reason it has done so among conservatives. It has created “green” business on an unprecedented scale. Internet bloggers on the left are wary of companies marketing eco-friendly products. They rightly point out that businesses have been guilty of “greenwashing,” creating the appearance of being green without actually making products that help the environment. But people who were green before being green was “in” often go further. Some call into question the authenticity of most, or even all, green advertising, expressing a nostalgia for the days when green was pure. They are particularly suspicious when large, mainstream companies market a green product or buy a smaller eco-business. When business owners join the discussion to protest and explain that they really are marketing a product that is better for the environment, at times at considerable expense or financial risk, the resulting discomfort is palpable. It is as though people were feeling they had a safe place to share an anti-establishment camaraderie with others, and then it was disrupted by dissent. For this group, opposition to business, especially when it is big, feels like home. This is how they defined themselves in the past, and it is not easy to change.

The inconvenient truth is changing not only our economy, but our culture, the social map of beliefs around which people cluster. Karl Marx said some unfortunate and mistaken things that have caused people to ignore his important insights. One such insight is that the economy is a powerful determinant, or mover, of cultural and political change. The emerging green economy is a case in point. It is rearranging the ideological furniture. When it is all sorted out, the meaning of both “right” and “left” will be different.

Take the Tap Water Movement Pledge: Avoid Bottled Water

Jay Kilby — Sat, 19 Jul 2008 07:22:03 GMT

By WeBuyItGreen: promoting green living and fair trade

If you have been a regular at the WeBuyItGreen Blog, you may have noticed that I rant quite often about bottled water. The manufacture and transport of bottled water uses enough petroleum to power 3 million cars for a year. Its manufacture alone produces two and a half million tons of carbon dioxide. Americans spend over $15 billion a year on bottled water.

This is low-hanging fruit when it comes to creating a sustainable environment. Imagine the amount of good we could do if we took that $15 billion a year out of bottled water and put it into renewable energy.

As I have mentioned in previous articles, companies that manufacture the stuff are aware of this and have begun trying to greenwash their way out of the problem.

Allow me to be unusually succinct and blunt: Don't buy it.

If you would like more factual information about tap water vs. bottled water, select our tap water movement page. You can also show your support for tap water and opposition to bottled water by taking the tap water pledge sponsored by Corporate Accountability International. By taking the pledge and swearing off bottled water, we can send a message to companies that bottled water is not a good investment in our health or the environment.

How to Buy Green Products

Jay Kilby — Thu, 07 Aug 2008 07:55:33 GMT

By WeBuyItGreen: promoting green living and fair trade

"I’ve heard some people say that bamboo clothing is good for the environment, but others say that it isn’t because of the chemicals used to produce it? Who is right?”

“I’ve heard a lot about 'greenwashing' lately. How do I know when I can trust a label that says a product is better for the environment?”

Although many consumers have now decided that they want to go green, they are finding that it can be complicated. Intelligent green consumption takes more than good will alone. It also requires reliable information and resources. Here are a few tips.

Don’t expect the government to solve this problem any time soon.

There are important government resources that can help, but they are limited. The FTC regulates environmental advertising and does have the power to take action against companies that promote their products in an unfair or deceptive manner. The Commission requires that advertisers make specific and clear claims about what makes their products “eco-friendly,” and companies must be able to substantiate such claims through reliable evidence. However, the reality is that the FTC has not, and perhaps cannot, keep pace with sophisticated forms of greenwashing, which can leave the consumer with the misleading impression that one particular product is better for the environment than competing products. Although the green guides are currently undergoing revision, it is likely that FTC enforcement will continue to be limited to only a small percentage of the most egregious forms of greenwashing.

Certification can help.

There are a growing number of reliable certification programs that can help you to identify green businesses and products that embrace leading standards for creating a sustainable environment. Certification programs that promote the highest standards use criteria for “green” that are created by a wide range of stakeholders, including industry, government, and consumer groups. They are buffered from conflicts of interest, and do a life cycle assessment of the environmental impact of the products they certify, meaning that they measure the impact of the product from its inception and manufacture through its use to its disposal. Be aware that there are many good small green merchants who cannot reasonably afford the steep price of top flight life cycle assessment certification.

Some reputable certifications to look for include EcoLogo, Green Seal, MBDC cradle to cradel, SMART certification by MTS, LEED, Green Guard, USDA organic, Energy Star, Transfair USA, Green-e, FSC (Forest Stewardship Council), EPEAT, Healthy Child Healthy World. Although it does not certify products, Co-op America provides a screening process to assure that member businesses listed in its directory meet criteria for environmental and social responsibility in sourcing, manufacturing, and marketing products. Similarly, although it does not certify products, the Fair Trade Federation screens member businesses according to whether they adhere to fair trade principles.

Consumers do require additional information in order to understand the meaning and limitations of particular certification programs.

Consult additional sources of information.

Like it or not, this means that intelligent green consumption will require investing a little time in self-education. There are a growing number of innovative informational resources available to consumers to help them make good choices. Consumer Reports now provides information about the environmental impact of specific products and the meaning and reliability of particular eco-friendly labels. Co-op America’s Responsible Shopper provides information about the environmental track record of particular companies. The Environmental Working Group’s Skin Deep site identifies the types and level of toxicity of chemicals that cosmetic companies use in their products. The Enviromedia Greenwashing Index raises awareness of greenwashing techniques by allowing consumers to post examples of greenwashing ads and comment on them. WeBuyItGreen has green merchants place ads on a forum, where consumers can "cross-examine" advertising claims by posting questions and feedback directly beneath the ads. A number of sites, such as Greenpeace, Treehugger, and Grist provide information for the green consumer through blogs, research, and news information.

Greenwashing: Consumer Resources for Buying Green Products

Jay Kilby — Fri, 01 Aug 2008 18:20:28 GMT

By WeBuyItGreen: promoting green living and fair trade

In addition to certification programs and FTC regulation, the consumer has several online resources that can help with identifying genuinely green businesses and products and combating the problem of greenwashing.

Co-op America: Co-op America has a Responsible Shopper tool that enables the green consumer to look up businesses and get a brief background check on their environmental and social responsibility track record. For example, if you look up Target, you learn that although the company is a partner in the EPA Waste Wise program to reduce city waste, it has been the subject of many sweatshop sourcing allegations, was fined by the EPA for failing to disclose percentages of pesticides in products, and was given an “F” rating by the NAACP for lack of commitment to people of color. The Responsible Shopper also gives you a “Go Green” option, which offers suggestions about greener alternatives to the store you originally selected.

Consumer Reports: This familiar third-party resource for helping consumers compare and evaluate products now has a Greener Choices page. While it is still fairly new with far fewer products to compare than under their main site, as this resource is expanded, its independent third-party analysis of green products is likely to become a very useful resource. Moreover, they have recently added an eco-label center where you can do a search on eco-labels to find information about what particular labels mean, whether they are subject to conflict of interest problems, and whether broad industry and public input was used to establish their standards.

Environmental Working Group: The EWG is a non-profit environmental research organization that provides a database of extensive information on toxics, pesticides, and pollutants. It includes a Skin Deep page that provides a database of cosmetic companies and products with information on the chemicals included in particular products as well as a hazards rating and explanation of associated health risks. Here you will find many instances of greenwashing through the misleading use of the term “natural.” For example, the site explains that “Crème of Nature Permanent Hair Coloring” contains a number of hazardous chemicals and receives a score of 10 on a 1-10 hazardous scale (with 10 being the most hazardous). Ingredients listed are linked to cancer, developmental and reproductive toxicity, and a host of other problems.

Enviromedia Greenwashing Index: Enviromedia Greenwashing Index enables consumers to post ads that exemplify greenwashing. Then others can read the ads, make comments, and rate them according to the severity of greenwashing they think the ads illustrate. The site enlists consumers themselves in the effort to raise awareness about deceptive green advertising.

WeBuyItGreen Forums: Our own site promotes legitimate green products and businesses by allowing merchants to list their goods and services free of charge on advertising forums, where consumers can post questions and feedback directly beneath the ads. Consider an analogy from politics. An ordinary advertisement is similar to a political photo op or sound bite. The business or politician is fully in control of the impression or image that is created. However, when ads are placed on a forum, this is similar to a political press conference. It is more difficult to project deceptive images or misleading impressions when people are allowed to respectfully ask for further information to clarify or substantiate claims.

Blog and News Sources: There are a large number of additional resources that provide information for the green consumer through blogs, research, and news information. Greenpeace, Treehugger, and Grist are three examples.

Regulation of Greenwashing by the Federal Trade Commission

Jay Kilby — Tue, 24 Jun 2008 15:18:28 GMT

By WeBuyItGreen: promoting green living and fair trade

In addition to green certification programs, government regulation provides the consumer some degree of protection against greenwashing. In the U.S., the Federal Trade Commission is the primary source for consumer protection against deceptive advertising and provides guides for environmental marketing claims. The FTC is authorized to “bring law enforcement actions against false or misleading marketing claims.”¹ Although the Green Guides are intended as guidelines for voluntary compliance and do not themselves have “the force and effect of law,” the FTC can bring action against a company if the Commission believes it has violated prohibitions against unfair or deceptive practices.² The process for filing a complaint against a company is fairly simple and straightforward. The Commission provides a form to complete and submit, which takes about five minutes.

However, the degree of protection afforded by FTC regulation is limited in two respects. First, regulatory guidelines provided by the Commission have not been used to prevent the more subtle and common forms of greenwashing. Secondly, FTC actions against greenwashing have been rare compared to the number of cases that occur. The FTC has been reviewing its Green Guides for the Use of Environmental Marketing claims over the past several months and promises a revised version of the green guides better equipped to protect growing consumer interest in buying green products.

FTC Criteria for Deception

The current Green Guides are based on the following three criteria for determining what distinguishes a legitimate advertising claim from one that is unfair or deceptive.

Substantiation: Objective assertions made about a product must be based upon reliable evidence to support it, such as objective tests performed by professionals who are expert in the relevant field.

Specificity and Clarity: Broad environmental claims and terms, such as “eco-friendly” or “environmentally friendly” should be avoided unless their specific meaning is made clear. An advertisement of an “environmentally friendly” wrapper does not meet this test unless the benefits it brings to the environment are made clear. However, an ad that explains that the wrapper is processed without the use of chlorine or other harmful substances does. Comparative ads must specify what their product is being compared to. An ad that claims their bottle uses 50% less plastic fails the specificity test, but one that claims their product uses 50% less plastic than their previous product passes. Claims that products are recyclable must specify whether this pertains to the packaging, the products, or both. Ads maintaining that products are made from recycled material must specify how much of the material is recycled unless it is all recycled. If a product is only compostable when an appropriate composing service is used (rather than a home-based composting pile or device), the advertiser must make this clear.

No Overstatements: Companies are not allowed to overstate the environmental benefits of their products. For example, consider a claim that environmentally beneficial coffee filters are produced through a chlorine-free bleaching process. If the alternative process used by the company making this claim also does significant environmental damage, even if it is less detrimental to the environment than chlorine bleaching, the company must reveal the harm caused by the alternative process they are using.

Limitations of FTC Regulation

The Green Guides as they currently stand do not appear to offer much protection against the most common form of greenwashing, which is the "Sin of the Hidden Tradeoff." One might think that the “no overstatements” criterion could apply here. For example, corn ethanol illustrates a hidden tradeoff because the use of corn for ethanol leads to loss of food production, which in turn leads to new forests being cleared to compensate for this loss, creating a negative net impact on the environment. Advertising corn ethanol as environmentally friendly could be viewed as a violation of the “no overstatement” criterion because once the hidden trade-off is revealed, we realize that the environmental benefits of corn ethanol have been overstated.

However, the examples cited in the FTC Green Guides do not appear to apply to broad trade-offs of this nature. One example they cite applies to simple misleading exaggeration, claiming that a package uses 50% more recycled content when that only amounts to an increase from 2% to 3% of the total packaging and is therefore negligible.³ Another example cited by the FTC is mentioned above, using an alternative to chlorine-free bleaching. This example involves trade-offs, but only with respect to a single aspect of the product or production process.

It is not likely that the FTC will require advertisers to consider life cycle assessment of the overall environmental impact of a product from its inception to its disposal. This means that regulation will not protect the consumer from advertising which focuses on one aspect of a product (for example, it is recyclable) while ignoring others (for example, it was manufactured in a factory that has taken no steps to reduce harmful emissions). If this is the case, then by playing a sophisticated trade-off game, a company can avoid the FTC’s interpretation of “deception” while still leaving the consumer with the misleading impression that buying their product will be better for the environment than buying from a competitor.

The second limitation of FTC regulation as a remedy for greenwashing is that guidelines are different from enforcement. Given the rapid growth of consumer interest in the environment and corresponding expansion of advertising touting environmental benefits, it is doubtful that FTC action will keep pace with greenwashing. A quick review of FTC records from January to June 2008 indicates that only two actions were taken during this period against companies for advertising that is related to greenwashing, and these both involved misleading health claims. The Commission fired a shot across the bow of myriad online advertisers promoting the “natural” alternatives to Hormone Replacement Therapy by filing an action against Herbs Nutrition Corporation for failing to substantiate claims about the benefits of their product. They also filed an action against Centro Natural Services for unsubstantiated claims about their pills and soap leading to weight loss. Based on these efforts, it appears unlikely that FTC regulation will be sufficient to protect the consumer against the bulk of more common and subtle forms of greenwashing.

¹Federal Trade Commission, Complying with the Environmental Marketing Guides, 1. Retrieved June 24, 2008.
²ibid.

³Federal Trade Commission, Guides for the Use of Environmental Marketing Claims, 3. Retrieved June 23, 2008.