Personal carbon allowances to combat rising domestic emissions
Tradeable personal carbon allowances are now on the government agenda, says David Miliband, Environment Secretary.
This is an idea whose time has come. Much research has already been done into making it as fair as possible. You can't expect it to solve problems of inequity which already exist in the world - the rich will always be able to buy themselves a way out, and survive catastrophes better than the poor.
But properly run, the scheme would protect the fuel poor, and allow low carbon consumers to make money from the rich.
Following last year's private members' Bill by Colin Challon, the idea, which has been current for at least ten years, is gaining ground as an effective way of changing people's behaviour without being prescriptive.
Mr Miliband said he believed "there is merit in providing people with a capped number of carbon allowances, which if they chose to reduce their emissions, could then make them money by selling surplus allowances".
Carbon allowances would cover people's direct use of energy through their electricity, gas, petrol and air travel – which makes up 44 per cent of the economy's total emissions. He said such a scheme would be more fair than tax increases because personal carbon allowances provide free entitlements and only offered financial penalties for those who go above their entitlement.
Speaking yesterday at the Audit Commission's annual lecture, Mr Miliband 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. To help reduce carbon emissions, the Government would set limits on the amount of carbon that could be used.
“People on low incomes are likely to benefit as they will be able to sell their excess allowances. People on higher incomes tend to have higher carbon emissions due to higher car ownership and usage, air travel and tourism, and larger homes.
“It is more empowering than many forms of regulation because instead of banning particular products, services or activities, or taxing them heavily, a personal carbon allowance enables citizens to make trade-offs. It is also empowering because many citizens want to be able to do their bit for the environment and tackle climate change, but there is no measurable way of guiding their decisions.”
Personal carbon tradeable allowances are one of a number of ways the Government is looking to consider further how individuals can be better informed and personally involved in tackling climate change. Carbon loyalty cards, league tables, the use of carbon offsets at point of purchase for certain sectors, awareness raising through labelling and carbon calculators are all being investigated as potential long-term measures.
Brenda Boardman, of the Environmental Change Institute at Oxford University, is running a feasibility study on the introduction of personal carbon allowances and trading, and would like to run a pilot scheme, perhaps on the Isle of Man. She proudly carries round a mock-up of a carbon credit card.
The success of such a scheme will ride on the amount of the overall, yearly decreasing, cap on emissions, which must be carefully fabricated and monitored. Directly linked to this is the price of the units. As we've seen with the European Carbon Trading Scheme, the wrong price results in failure to achieve the scheme's goals and discrediting of the whole scheme.
The Energy Review highlighted that the Government (Department of Communities and Local Government, Defra, Department for Trade and Industry and HM Treasury) will undertake a joint study that will look at the role of “community level” approaches to mobilising individuals, and the role of local authorities in particular in making them work effectively.
The study will draw on experience of what initiatives have and have not worked in both the environmental area and other policy areas, such as public health. In the light of this information, the study will examine what new policy options, such as tradeable personal carbon allowances, could be deployed to stimulate local action and consider their relative advantages and disadvantages.
The pilot will report back to Ministers in the first half of 2007.
> Tyndall Centre Report
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