 PERSONAL CARBON QUOTASWritten by CAT's free information serviceemail: info@cat.org.uk; tel: 0845 3308373 or 01654 705989 Click here to download a printable version of this sheet (2 sides A4, PDF format, 50KB). This piece was originally published in CAT’s membership magazine Clean Slate. To find out more about CAT membership, visit www.cat.org.uk/membership Introduction The essential idea of personal carbon trading is that a cap or budget sets the overall level of greenhouse gas emissions allowed, and this is divided up into personal allowances. Participants could be both individuals and larger bodies, or just individuals (with industry, business and the public sector covered by other forms of carbon trading). The allowance is given out for free to individuals, probably via credit/debit card technology. People use ‘carbon units’ whenever buying fuel directly - mainly heating or electricity bills and vehicle fuel. Many proposed schemes also include air travel, since it’s a large, easily tracked contribution to emissions. Individuals can sell surplus units, so the particularly carbon-frugal will profit. People who’ve already taken a low-carbon course will immediately be in carbon credit, and able to sell many permits. If the scheme allows, they could even 'retire' some, reducing the carbon budget still further. Studies Perhaps the first detailed work was into Tradable Energy Quotas (TEQs), by Dr. David Fleming and colleagues. The Tyndall Centre used this as a basis for their study on Domestic Tradable Quotas (DTQs). The Low Carbon Futures team at the Environmental Change Institute, of Oxford University, has also worked on personal carbon trading. The UK Energy Strategy (Zero Carbon Britain) jointly developed by CAT staff and students and staff at our new Graduate School of the Environment includes tradable carbon permits as a key mechanism for reducing emissions. The overall UK (and global) carbon budget, declining year-on-year, would be set using the Contraction and Convergence model developed by the Global Commons Institute. Is it the solution? It could give a greater incentive to save carbon than VAT-like carbon taxes, which are perhaps harder to differentiate from costs, and so less likely to lead to positive change. Such quotas do need to sit alongside other policies to develop technologies and systems that reduce the carbon intensity of homes, transport and industry. Of course, steering public and business towards low-carbon choices through a decreasing permit allocation helps this process by creating demand. Will it work? Some have pointed to disappointing early results from the EU Trading Scheme pilot (covering industry). However, many countries were generous in setting the number of permits (following industry lobbying), and they were given out at no charge – a combination that’s been criticised for turned the scheme into a form of subsidy. Greenhouse gas emissions in the EU during 2005 were actually many millions of tonnes less than the total allocated through the scheme, undermining the worth of the permits. The scheme didn’t become part of legal Kyoto Protocol obligations until 2008, so hopefully these problems can be addressed It’s vital to set the overall carbon budget at an effective level (for the UK and worldwide). CAT’s Strategy and others recommend that an independent panel set the budget on the basis of climate science, to avoid subjecting it to political lobbying. They also advocate auctioning carbon permits to business, rather than free allocation. Concern has been raised about potential scale and complexity, especially given the poor record of many recent government-led IT projects. Martin Williams, a Friends of the Earth campaigner, told the BBC: "What worries us is that it could take quite a long time to implement it and really we don't have that long to tackle climate change." It ’s worth emphasizing permits are only used when directly purchasing fuel. Less obvious carbon emissions, tied up in goods and services, are dealt with through the permits allocated to business and industry - so that they are also encouraged to become carbon-light. A study by the Centre for Sustainable Energy (CSE) said that a scheme could be operational within five years. Will it happen? Former Environment Secretary David Miliband talked up the potential of quotas. In a speech last year he said: "Imagine a country where carbon becomes a new currency. We carry bank cards that store both pounds and carbon points. When we buy electricity, gas and fuel, we use our carbon points, as well as pounds." He added that this could be "more equitable, more empowering and more effective than the traditional tools of information, tax, and regulation." In June 2007, Miliband hinted that pilot 'carbon credit card' schemes could be carried out soon, while his department at the time (Defra) continued to carry out consultations into various options, including a 'Carbon Reduction Commitment' cap and trade scheme for non-energy intensive commercial and public sector organisations. In 2008 Defra dropped plans to trial a 'carbon card' scheme. A feasibility study reported that it was: "an idea ahead of its time in terms of its public acceptability and the technology to bring down costs." However, they did leave the door open to look again at this option in coming years. Defra say that they will follow work in this area by non-governmental bodies (research institutes, academics, etc). Perhaps CAT’s own Zero Carbon Britain research will be of interest to them! Further Information Zero Carbon Britain Tradable Energy Quotas (TEQs) Tyndall Centre Environmental Change Institute Defra (Department for Environment, Food & Rural Affairs CarbonLimited Carbon Reduction Action Groups Global Commons Institute You can also contact us with any further questions.
|