The Federal Trade Commission has been conducting public workshops and grilling green building advocates in preparation for releasing 2009 green marketing guidelines. As environmental priorities have emerged as a public priority, green marketing has been used to sell most products, including those making spurious claims regarding how green they really are. Green advocates hope that FTC rules will provide tough guidance, national standards and a means to fight fraudulent green claims in green building and beyond.

“Greenwashing,” as false green marketing is called, has been applied to everything from SUVs to carpeting. The problem with greenwashing is that consumers believe that higher prices are justified because they are not only purchasing the product, but also its “green attributes”, or the value of its environmental benefits. Greenwashing also hurts the ability of products that are actually green to compete with cheaper imitations.

This could become an especially important issue if carbon markets ever expand to regulate individuals. In that scenario, individuals must account for their carbon output just like big companies soon will. For example if you or I would have a certain carbon limit we’d either have to meet or buy permits to augment. In that case, consumers would be relying on purchasing products that are actually environmentally sound for legal compliance rather than just feel-good or environmental or health concern, as the case may more typically be now.

The greenwashing problem has been a nuisance to the organic food industry for years, solved only when national, third-party organizations verified the truthfulness of green claims. Litigation has been used to fight fraudulent green claims, but the lack of specific laws and overly permissive existing standards have been setbacks for plaintiffs. The FTC guidelines could solve most of these problems.

The FTC is expected to offer guidelines that are more stringent than building codes, that require data about health benefits, system integration and requires a third party to verify the veracity of green claims. In doing so, the FTC validates green markets as a mainstream economic force rather than boutique services for hippies and yuppies. Quite, Michelle More, of the U.S. Green Building Council, told the FTC that green building will be a forty billion dollar business in the next two years, growing even during the economic downturn and housing market decline.

“We need a common lexicon where there is a common vernacular like a nutrition label.” Moore went on. “Screwing in a CFL light bulb and putting in a bamboo floor does not a green-built home make.”