A chance for shoppers to start counting the carbon - 14 August

Pick up a packet of Walkers potato crisps in the UK and you might notice something unusual on the back. Alongside the normal information on how much fat, salt and calories they contain, there is another label. It informs the consumer that the bag contains only 34.5g of crisps, but 75g of carbon dioxide.

That carbon dioxide is not to be found within the packet. It is "virtual" CO 2 - a calculation of the amount of the gas expelled into the atmosphere as a result of the processes that went into the packet's production, from growing the potato to packaging and distributing the finished crisps.

This is a carbon label, one of the first of its kind in the world. The idea behind it is that today's consumers, who are growing ever more environmentally conscious, should be able to see how their buying decisions increase or decrease their environmental impact. It can help people to calculate and reduce their own "carbon footprint", a measure of how many greenhouse gas emissions they are responsible for. Companies can also use such labels to differentiate their products from those of rivals, and in the future even governments could use them to regulate emissions or crack down on companies that are not obeying environmental strictures.

"Carbon labels are a way of displaying very clearly what has gone into a product, of measuring what has been the impact on the climate of making that product," explains Euan Murray of the Carbon Trust, a government-funded body charged with helping businesses to cut their greenhouse gas output.

Only a handful of companies are putting carbon labels on their goods at present, most of them in the UK and working in partnership with the Carbon Trust. As well as Walkers, which is owned by PepsiCo, the chemist chain Boots is putting information on the "carbon footprint" of some of its cosmetics ranges at the point of sale. Innocent, a maker of smoothies and fruit juices, puts carbon label information on its products on its website, and may do so on the products in future.

But the idea of the labels was given a considerable boost when Terry Leahy, chief executive of Tesco, the supermarket chain with interests in 12 countries, pledged that his company would eventually have carbon labels put on every one of the 70,000 products on its shelves.

Tesco's announcement was quickly followed by the caveat that it might be several years before the retailer was ready to roll out the labels. Some sceptical observers, particularly at rival chains, took the view that the decision was less an environmental advance than an eye-catching attempt to steal a march on other supermarkets, which have been vying to be seen as the greenest. But the commitment, if followed through, would require a large number of companies to measure the carbon in their products and bring carbon labels to the attention of millions of consumers.

The Carbon Trust says more than 150 companies have approached it with a view to using the labels. As well as drawing the support of Tesco, the scheme has won backing fromJ Sainsbury, Marks & Spencer, Cadbury Schweppes, Duchy Originals and the Co-operative Group.

Once a manufacturer, whether it be a food processor or a cosmetics company, has put a carbon label on one product, labelling the rest of its lines becomes easier. Walkers found it could roll out carbon labels to all of its crisp packets within months of doing so for cheese and onion, its most popular flavour.

Similarly, once one company has introduced carbon labelling, it becomes easier for others to do so. The Carbon Trust is working with BSI British Standards to create a standard that can be used by other companies to create carbon labels.

Doing the necessary research involves time and money. Steve John, director of corporate affairs at PepsiCo, says the process of making the labels for Walkers took about 12 to 18 months.

But the measurement and monitoring can yield useful information. All of the companies that the Carbon Trust has worked with on the labels have found they could make savings as a result of what they discovered during the process, cutting their costs at the same time as cutting their carbon output.

Jessica Sansom, head of sustainability at Innocent Drinks, found it took several months to carry out the monitoring necessary, at a cost of less than £10,000. But she says it was "an incredibly useful process, it threw up lots of very useful information and we've been able to identify lots of win-wins in improving our efficiency".

Energy efficiencies are the most obvious saving: Mr Murray of the Carbon Trust estimates that most companies can cut their energy bills by at least20 per cent. But companies can also save on water bills, raw material usage and even transport. Mr John says PepsiCo found it could cut its transport fuel costs by a fifth by training staff to drive more efficiently. He says the company is conducting research on how consumers react to the labels, to be published this autumn.

For shoppers, it may be -puzzling to see that there are 75g of carbon in a packet of crisps or 294g in a mango and passion fruit smoothie. Until more products have such labels and buyers can compare like with like, their usefulness is limited.

Separate research by LEK Consulting, to be published tomorrow, has found that just over half of people in the UK say they "would value details concerning a product's carbon footprint when making a buying decision". Rather under half would use this information to switch to a product or service with a lower carbon footprint, however, and only one in five would go to a less convenient retailer in order to obtain such products.

But the research, carried out by YouGov among a sample of 2,039 adults, also found that most people were not convinced by the environmental claims of retailers and manufacturers, despite the enormous marketing effort that many companies have put into painting themselves green. Nearly 60 per cent said their claims were "not very" or "not at all" credible.

If customers can see a product's carbon footprint in front of them when they make their purchase, it may do more to convince them of the green credentials of its maker.