Personal carbon trading
Encyclopedia
Personal carbon trading is a general term referring to a number of proposed emissions trading
schemes under which emissions credits are allocated to adult individuals on a (broadly) equal per capita
basis, within national carbon budgets
. Individuals then surrender these credits when buying fuel or electricity. Individuals wanting or needing to emit at a level above that permitted by their initial allocation would be able to purchase additional credits from those using less, creating a profit for those individuals who emit at a level below that permitted by their initial allocation.
Individuals would most likely hold their emissions credits in electronic accounts, and would surrender them when they make carbon-related purchases, such as electricity, heating fuel and petroleum. PCAs could also require individuals to use credits for public transport. Tradable Energy Quotas
would bring all other sectors of society (eg. Industry
, Government
) within the scope of a single scheme.
Individuals who exceed their allocation (i.e. those who want to use more emissions credits than they have been given) would be able to purchase additional credits from those who use less, so individuals that are under allocation would profit from their small carbon footprint.
Proponents of personal carbon trading claim that it is an equitable way of addressing climate change
and peak oil
, as it could guarantee that a national economy lives within its agreed carbon budget and ensure fair access to fuel and energy. They also believe it would increase ‘carbon literacy’ among the public, while encouraging more localised economies.
Personal carbon trading has been criticised for its possible complexity and high implementation costs. As yet, there is minimal reliable data on these issues. There is also the fear that personal "rationing" and trading of allowances will be politically unacceptable, especially if those allowances are used to buy from industries who are already passing-on costs from their participation in carbon levy or trading schemes such as the EU ETS.
Research in this area has shown that personal carbon trading would be a progressive
policy instrument - redistributing money from the rich to the poor - as the rich use more energy than the poor, and so would need to buy allowances from them. This is in contrast to a direct carbon tax
, under which all lower income people are worse off, prior to revenue redistribution.
is trialling the world's first personal carbon trading programme, starting in 2011.
The Climate Change Act 2008 also grants powers allowing the UK Government to introduce a personal carbon trading scheme without further primary legislation.
In May 2008 DEFRA completed a pre-feasibility study into TEQs, with the headline finding that “personal carbon trading has potential to engage individuals in taking action to combat climate change, but is essentially ahead of its time and expected costs for implementation are high”. Based on this DEFRA announced that “the (UK) Government remains interested in the concept of personal carbon trading and, although it will not be continuing its research programme at this stage, it will monitor the wealth of research focusing on this area and may introduce personal carbon trading if the value of carbon savings and cost implications change".
Later that same month the UK Parliament's Environmental Audit Committee
produced their report on the subject, which concluded that ”personal carbon trading could be essential in helping to reduce our national carbon footprint" and rebuked the Government for delaying a full feasibility study, stating that "although we commend the Government for its intention to maintain engagement in academic work on the topic, we urge it to undertake a stronger role, leading and shaping debate and coordinating research".
Analysts have noted that to implement any effective carbon rationing system, "the government must convince the public that rationing levels are fair, that the system is administered transparently and fairly, and that evaders are few in number, likely to be detected and liable to stiff penalties if found guilty."
A 2010 paper into attitudes towards personal carbon trading suggests a general ambivalence, however the researchers noted that "In fact, moderate support was the commonest view".
In January 2011, the UK's All Party Parliamentary Group on Peak Oil published a report into TEQs, garnering significant media coverage. This report highlights the significant research from a number of research centres produced since the Government's pre-feasibility study, and argues that these studies demonstrate the benefits of to be far greater than was acknowledged in the Government's research. Accordingly, it urges them to move quickly to fund moves towards potential implementation in the near future.
is considered in the feature film The Age of Stupid
, released in February 2009.
Emissions trading
Emissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants....
schemes under which emissions credits are allocated to adult individuals on a (broadly) equal per capita
Per capita
Per capita is a Latin prepositional phrase: per and capita . The phrase thus means "by heads" or "for each head", i.e. per individual or per person...
basis, within national carbon budgets
United Kingdom Climate Change Bill
The Climate Change Act 2008 is an Act of the Parliament of the United Kingdom. The Act makes it the duty of the Secretary of State to ensure that the net UK carbon account for all six Kyoto greenhouse gases for the year 2050 is at least 80% lower than the 1990 baseline, toward avoiding dangerous...
. Individuals then surrender these credits when buying fuel or electricity. Individuals wanting or needing to emit at a level above that permitted by their initial allocation would be able to purchase additional credits from those using less, creating a profit for those individuals who emit at a level below that permitted by their initial allocation.
Proposals
Current proposals include:- Tradable Energy QuotasTradable Energy QuotasTEQs is a proposal for a national emissions and energy trading scheme that includes personal carbon trading as a central element. It is the subject of significant interest from the UK Government, and is explicitly designed to address both climate change and peak oil.The scheme was originally...
(TEQs) - devised by environmental writer, David Fleming, who first published the idea in 1996 under its former name Domestic Tradable Quotas (DTQs). The UK's Tyndall Centre for Climate Change Research has been researching this scheme since 2003, and more recently the Royal Society for the encouragement of Arts, Manufactures & Commerce (RSA) through its CarbonLimited project. The scheme was the subject of a UK government pre-feasibility study in 2008, and an All Party Parliamentary Group report in 2011.
- Personal Carbon Allowances (PCAs) - described in the book “How we can save the planet” by Mayer HillmanMayer HillmanMayer Hillman is a Senior Fellow Emeritus since 1992 at the Policy Studies Institute, University of Westminster.A qualified architect and town planner, he completed a doctoral thesis on transport, planning and environmental issues in 1970 at the University of Edinburgh.Hillman co-authored a 1990...
and Tina Fawcett. Work on PCAs is ongoing at the Environmental Change Institute, Oxford, UK. The title "PCAs" or "PCA scheme" is sometimes used generically to refer to any proposed form of personal carbon trading.
- Tradable Personal Pollution Allowances - originally proposed in an article by Dr. Kirk Barrett in 1995 and applicable to any form of pollution, including carbon dioxide.
Individuals would most likely hold their emissions credits in electronic accounts, and would surrender them when they make carbon-related purchases, such as electricity, heating fuel and petroleum. PCAs could also require individuals to use credits for public transport. Tradable Energy Quotas
Tradable Energy Quotas
TEQs is a proposal for a national emissions and energy trading scheme that includes personal carbon trading as a central element. It is the subject of significant interest from the UK Government, and is explicitly designed to address both climate change and peak oil.The scheme was originally...
would bring all other sectors of society (eg. Industry
Industry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...
, Government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
) within the scope of a single scheme.
Individuals who exceed their allocation (i.e. those who want to use more emissions credits than they have been given) would be able to purchase additional credits from those who use less, so individuals that are under allocation would profit from their small carbon footprint.
Proponents of personal carbon trading claim that it is an equitable way of addressing climate change
Climate change
Climate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
and peak oil
Peak oil
Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...
, as it could guarantee that a national economy lives within its agreed carbon budget and ensure fair access to fuel and energy. They also believe it would increase ‘carbon literacy’ among the public, while encouraging more localised economies.
Personal carbon trading has been criticised for its possible complexity and high implementation costs. As yet, there is minimal reliable data on these issues. There is also the fear that personal "rationing" and trading of allowances will be politically unacceptable, especially if those allowances are used to buy from industries who are already passing-on costs from their participation in carbon levy or trading schemes such as the EU ETS.
Research in this area has shown that personal carbon trading would be a progressive
Progressive tax
A progressive tax is a tax by which the tax rate increases as the taxable base amount increases. "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high, where the average tax rate is less than the marginal tax rate...
policy instrument - redistributing money from the rich to the poor - as the rich use more energy than the poor, and so would need to buy allowances from them. This is in contrast to a direct carbon tax
Direct tax
The term direct tax generally means a tax paid directly to the government by the persons on whom it is imposed.-General meaning:In the general sense, a direct tax is one paid directly to the government by the persons on whom it is imposed...
, under which all lower income people are worse off, prior to revenue redistribution.
Progress towards implementation
Norfolk IslandNorfolk Island
Norfolk Island is a small island in the Pacific Ocean located between Australia, New Zealand and New Caledonia. The island is part of the Commonwealth of Australia, but it enjoys a large degree of self-governance...
is trialling the world's first personal carbon trading programme, starting in 2011.
The Climate Change Act 2008 also grants powers allowing the UK Government to introduce a personal carbon trading scheme without further primary legislation.
In May 2008 DEFRA completed a pre-feasibility study into TEQs, with the headline finding that “personal carbon trading has potential to engage individuals in taking action to combat climate change, but is essentially ahead of its time and expected costs for implementation are high”. Based on this DEFRA announced that “the (UK) Government remains interested in the concept of personal carbon trading and, although it will not be continuing its research programme at this stage, it will monitor the wealth of research focusing on this area and may introduce personal carbon trading if the value of carbon savings and cost implications change".
Later that same month the UK Parliament's Environmental Audit Committee
Environmental Audit Select Committee
The Environmental Audit Select Committee is a select committee of the House of Commons in the Parliament of the United Kingdom. The remit of the committee is to examine how government department's policies and programmes will affect both the environment and sustainable development.-Membership:As of...
produced their report on the subject, which concluded that ”personal carbon trading could be essential in helping to reduce our national carbon footprint" and rebuked the Government for delaying a full feasibility study, stating that "although we commend the Government for its intention to maintain engagement in academic work on the topic, we urge it to undertake a stronger role, leading and shaping debate and coordinating research".
Analysts have noted that to implement any effective carbon rationing system, "the government must convince the public that rationing levels are fair, that the system is administered transparently and fairly, and that evaders are few in number, likely to be detected and liable to stiff penalties if found guilty."
A 2010 paper into attitudes towards personal carbon trading suggests a general ambivalence, however the researchers noted that "In fact, moderate support was the commonest view".
In January 2011, the UK's All Party Parliamentary Group on Peak Oil published a report into TEQs, garnering significant media coverage. This report highlights the significant research from a number of research centres produced since the Government's pre-feasibility study, and argues that these studies demonstrate the benefits of to be far greater than was acknowledged in the Government's research. Accordingly, it urges them to move quickly to fund moves towards potential implementation in the near future.
Related emissions reduction proposals and initiatives
- Carbon Rationing Action Groups - groups in the UK and US that voluntarily cap their greenhouse gas emissions
- "Icecaps" - devised by George MonbiotGeorge MonbiotGeorge Joshua Richard Monbiot is an English writer, known for his environmental and political activism. He lives in Machynlleth, Wales, writes a weekly column for The Guardian, and is the author of a number of books, including Captive State: The Corporate Takeover of Britain and Bring on the...
in his book Heat: How to Stop the Planet Burning.
Media
Carbon rationingRationing
Rationing is the controlled distribution of scarce resources, goods, or services. Rationing controls the size of the ration, one's allotted portion of the resources being distributed on a particular day or at a particular time.- In economics :...
is considered in the feature film The Age of Stupid
The Age of Stupid
The Age of Stupid is a 2009 British film by Franny Armstrong, director of McLibel and Drowned Out, and founder of 10:10, and first-time producer Lizzie Gillett...
, released in February 2009.
See also
- Carbon offsetCarbon offsetA carbon offset is a reduction in emissions of carbon dioxide or greenhouse gases made in order to compensate for or to offset an emission made elsewhere....
- Clean Air ConservancyClean Air ConservancyThe Clean Air Conservancy is a United States non-profit charity devoted to protecting our planet’s clean air and slowing the pace of climate change by actively participating in pollution markets and participating in emissions trading....
- Contraction and ConvergenceContraction and ConvergenceContraction and Convergence is a proposed global framework for reducing greenhouse gas emissions to combat climate change. Conceived by the Global Commons Institute [GCI] in the early 1990s, the Contraction and Convergence strategy consists of reducing overall emissions of greenhouse gases to a...
- Emissions Reduction Currency SystemEmissions Reduction Currency SystemEmissions Reduction Currency Systems are schemes that provide a positive economic and or social reward for reductions in greenhouse gas emissions, either through distribution or redistribution of national currency or through the publishing of coupons, reward points, social currency, or...
- Emissions tradingEmissions tradingEmissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants....
- International Carbon Reduction and Offset AllianceInternational Carbon Reduction and Offset AllianceThe International Carbon Reduction and Offset Alliance is a non-profit membership organisation which promotes best practice across the voluntary carbon market...
General
- Carbon rationing and personal carbon allowances CarbonEquity is a climate change education and advocacy NGO.
- Carbon Trading for Individuals? - article (Sep 2005) plus online forum at the website of the UK Sustainable Development CommissionSustainable Development CommissionThe Sustainable Development Commission was a non-departmental public body responsible for advising the UK Government, Scottish Government, Welsh Assembly Government, and Northern Ireland Executive on sustainable development....
- Description of the RSA project on personal carbon trading - CarbonLimited
- RSA CarbonLimited website
- RSA CarbonLimited final report A persuasive climate: Personal trading and changing lifestyles (December 2008)
- RSA Journal article What we must do to save the planet (June 2006)
- RSA CarbonLimited report supporting implementation of a UK Personal Carbon Trading scheme from 2013 (Sept 2007)
- Paragragh 2.84 of UK government's Energy Review (11 July 2006) announces study looking at personal carbon trading and other approaches to mobilising individuals
- Government to consider personal carbon allowances - press release by the UK Department for Environment, Food and Rural AffairsDepartment for Environment, Food and Rural AffairsThe Department for Environment, Food and Rural Affairs is the government department responsible for environmental protection, food production and standards, agriculture, fisheries and rural communities in the United Kingdom...
(19 July 2006) - Speech by David MilibandDavid MilibandDavid Wright Miliband is a British Labour Party politician who has been the Member of Parliament for South Shields since 2001, and was the Secretary of State for Foreign and Commonwealth Affairs from 2007 to 2010. He is the elder son of the late Marxist theorist Ralph Miliband...
(19 July 2006) to the Audit CommissionAudit CommissionThe Audit Commission is a public corporation in the United Kingdom.The Commission’s primary objective is to improve economy, efficiency and effectiveness in local government, housing and the health service, directly through the audit and inspection process and also through value for money...
in which he mentions personal carbon trading - David Miliband's blog on personal carbon trading (19 July 2006) with over 80 comments from members of the public
- Commentary: Your Own Personal Carbon Credits - Berkeley Daily Planet (1 Sep 2006)
- UK Government-commissioned scoping study, by the Centre for Sustainable Energy (Nov 2006)
- Zero Carbon Britain Report outlining how Britain could become carbon neutralCarbon neutralCarbon neutrality, or having a net zero carbon footprint, refers to achieving net zero carbon emissions by balancing a measured amount of carbon released with an equivalent amount sequestered or offset, or buying enough carbon credits to make up the difference...
by 2027, built around a framework of TEQs nationally and Contraction and ConvergenceContraction and ConvergenceContraction and Convergence is a proposed global framework for reducing greenhouse gas emissions to combat climate change. Conceived by the Global Commons Institute [GCI] in the early 1990s, the Contraction and Convergence strategy consists of reducing overall emissions of greenhouse gases to a...
internationally - Centre for Alternative TechnologyCentre for Alternative TechnologyThe Centre for Alternative Technology is an eco-centre in Powys, mid-Wales, dedicated to demonstrating and teaching sustainable development. CAT, despite its name, no longer concentrates its efforts exclusively on alternative technology, but provides information on all aspects of sustainable living...
(July 2007) - The UK Parliament Environmental Audit CommitteeEnvironmental Audit Select CommitteeThe Environmental Audit Select Committee is a select committee of the House of Commons in the Parliament of the United Kingdom. The remit of the committee is to examine how government department's policies and programmes will affect both the environment and sustainable development.-Membership:As of...
's report into personal carbon trading (May 2008) - Personal Carbon Credits Article outlining personal carbon credit trading from home energy reductions (July 2009)
TEQs (Tradable Energy Quotas) - formerly known as Domestic Tradable Quotas
- David Fleming's website on Tradable Energy Quotas (including his free guide to TEQs, downloadable as a PDF)
- Information on Southern Cross University's TEQs trial on Norfolk Island, due to start in 2011
- The All Party Parliamentary Group on Peak Oil's report into TEQs, downloadable as a PDF (January 2011)
- BBC Radio 4 - 12 minute discussion of peak oilPeak oilPeak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...
and TEQs (Sept 2008) - Official responses to the pre-feasibility study by i) David Fleming's Lean Economy Connection , ii) the Centre for Sustainable Energy and iii) House of Commons Environmental Audit Committee
- UK Department for Environment, Food and Rural Affairs pre-feasibility study into TEQs (May 2008)
- David BoyleDavid BoyleDavid Boyle may refer to:*David Boyle , English professional footballer*David Boyle, 1st Earl of Glasgow , Scottish nobleman*David Boyle , economics author and journalist...
article looking back from 2021 to the introduction of TEQs in 2011 - All to gain on the carbon diet? (Feb 2006) - Domestic Tradable Quotas: Fancy buying and selling your dirty habits? - Financial Times (9 Oct 2006)
- Tyndall Technical Report 39 - a detailed report on DTQs (December 2005)
- Tyndall Centre summary of DTQ research (2005)
- Domestic Tradable Quotas (Climate Change) Bill - a Private Members Bill submitted to the UK Parliament in 2004