Editing IPCC:AR6/WGIII/Chapter-16 (section)

==== 16.4.4.6 Assessment of the Impact on Innovation and on Competitiveness and Distributional Outcomes of Soft Instruments ====

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The literature specifically focusing on the impacts of labels is very limited and indicates positive outcomes ( ''limited evidence'' , ''high agreement'' ) ''.'' Energy labels may accompany a minimum energy performance standard, and the outcomes of these policies are often combined in literature ( [[#IEA--2015|IEA 2015]] ). But again, given the limited evidence, more research is needed. Although there are many studies on energy efficiency more broadly and for both standards and labels, only eight studies specifically focus on labels. Furthermore, seven of them report positive outcomes and one negative outcomes. Six of the studies used qualitative methods mentioning the impacts of labelling on the development of new products ( [[#Wiel--2006|Wiel et al. 2006]] ). Research specifically comparing voluntary labels with other mechanisms found a significant and positive relationship between labels and the number of energy-efficient inventions ( [[#Girod--2017|Girod et al. 2017]] ). More research is needed, especially in developing countries, that have extensive labelling programmes in place, and also with quantitative methods, to develop evidence on the impacts of labelling on innovation. Box 16.7 discusses an example of a combination of policy instruments in China including labelling, sale bans and financial support.

Voluntary approaches have a largely positive impact on innovation for those that choose to participate ( ''robust evidence'' , ''medium agreement'' ). Research on voluntary approaches focuses on firms adopting voluntary environmental management systems that can be certified based on standards of the widely adopted International Organization for Standardization (ISO 14001 – standard for environmental management) or the European Union’s Eco-Management and Auditing Scheme (EMAS), which is partly mandatory. Out of 16 analyses: 70% report positive innovation outcomes in terms of patents, products or processes; 17% report negligible impacts; and 13% report negative impacts. Positive innovation outcomes have been linked to firms’ internal resource management practices and were found to be strengthened in firms with mature environmental management systems and in the presence of other environmental regulations ( [[#Inoue--2013|Inoue et al. 2013]] ; [[#He--2019|He and Shen 2019]] ; [[#Li--2019a|Li et al. 2019a]] ). Overall, studies are concentrated in a few countries that do not fully capture where environmental management systems have been actually adopted ( [[#Boiral--2018|Boiral et al. 2018]] ). There is a need for research in analyses of such instruments in emerging economies, including China and India, and methodologically in qualitative and longitudinal analyses ( [[#Boiral--2018|Boiral et al. 2018]] ).

The outcomes for performance or endorsement labels have been associated with positive competitiveness outcomes ( ''medium evidence'' , ''medium agreement'' ) ''.'' Out of 19 studies, 89% report positive impact and 11% negligible impact. Although there are several studies analysing competitiveness-related metrics, evidence on most individual metrics is sporadic, except for housing premiums. A large number of studies quantitatively assessing competitiveness find that green labels in buildings are associated with housing price premiums in multiple countries and regions ( [[#Fuerst--2011|Fuerst and McAllister 2011]] ; [[#Kahn--2014|Kahn and Kok 2014]] ; [[#Zhang--2017|Zhang et al. 2017]] ). Of those studies, 32% were qualitative, associating appliance labelling programmes with employment and industry development ( [[#European%20Commission--2018|European Commission 2018]] ). There is a research gap in analyses of developing countries, and also in quantitatively assessing outcomes beyond housing price premiums.

A few studies on the distributional outcomes of voluntary labelling programmes point to positive impacts ( ''limited evidence'' , ''high agreement'' ) ''.'' All four studies that focus on benefits for consumers and tenants report positive impacts ( [[#Devine--2015|Devine and Kok 2015]] ). Although there are benefits for utility companies and other stakeholders, more research is needed to specifically attribute these benefits to voluntary labels rather than energy efficiency programmes in general.

Voluntary agreements are associated with positive competitiveness outcomes ( ''medium evidence'' , ''medium agreement'' ): 14 out of 19 evaluations identified were associated with positive outcomes, while three were associated with negligible outcomes, and two with negative outcomes. Research found an increase in perceived firm financial performance ( [[#de%20Jong--2014|de Jong et al. 2014]] ; [[#Moon--2014|Moon et al. 2014]] ). Studies also show an association with higher exports as more environmentally-conscious trade partners increasingly value environmental certifications ( [[#Bellesi--2005|Bellesi et al. 2005]] ). More research is needed to develop evidence on metrics of competitiveness besides firms’ financial performance, and especially in developing countries.

Voluntary agreements are associated with a positive impact on distributional outcomes ( ''limited evidence'' , ''high agreement'' ). Five studies, mainly using qualitative approaches, report a positive association between a firm adopting an environmental management system and impacts on its supply chains. There is a need for more studies with quantitative assessments and geographical diversity.

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