What if carbon trading – where companies must bid for limited permits to emit pollutants, and so pay a price in order to do so – could be applied on an individual level?
Personal carbon trading is a policy idea that aims to reduce a nation’s overall carbon emissions by handing to individuals rights and responsibilities for their own emissions. With the IPCC this week preparing their latest report on the threat of climate change, with greenhouse gas emissions still rising perhaps it’s time to put more tools on the table.
In a scheme designed to manage household energy use and personal travel, each adult would be allocated an equal annual carbon allowance. Units of this carbon allowance would have to be paid out when paying household energy bills or filling up the car. Those using less than their annual allowance could sell their surplus units, while those needing more would have to buy them. This way, the polluter would pay – a key environmental maxim. Could such a radical policy work, and could it be socially and politically acceptable?
The UK government has set itself a target of reducing carbon emissions by 80% by 2050. This would require considerably more rapid reductions in carbon emissions that have been managed so far. Some scientists argue that deeper and more rapid reductions in carbon emissions are required if the UK is to make a just contribution to global efforts.
A low carbon society will require major improvements in energy efficiency, a shift towards low- and zero-carbon fuels, and ways of living and doing business which are much less energy-intensive. It’s unlikely that this can be achieved without actively involving citizens – who are after all directly responsible for more than 40% of UK emissions.
So a personal carbon trading scheme would make people more directly aware of their energy-related carbon greenhouse gas emissions, and give them direct control of managing them. By contrast, most policy on personal energy use operates at a distance from individuals, for example requirements for energy suppliers to fund insulation schemes, or for manufacturers to meet minimum efficiency standards for appliances. And it fails to communicate the significance of different decisions on personal carbon emissions.
How would it work?
Personal carbon trading would need be practical to use, and to persuade people to reduce their emissions. Research has shown that introducing an electronic card system and “bank” of carbon units would be easily possible with current technology (which already works for gas- and electric-payment cards, Oyster travelcards, secure entry building passes, and many other systems).
The policy could use various ways try and change individuals’ behaviour. For example, economic (by generating an extra cost for profligate energy use), psychological (by setting goals and budgets and providing timely feedback), and social (strongly signalling what constitutes a socially acceptable level of personal emissions).
But would this policy be fair? It embodies a specific view of equity, proposing that an equal carbon allowance is fair. This is rights-based interpretation of fairness, but some would argue that a more just system would be based on an individuals’ ability to reduce emissions, or their ability to pay, or even to focus on most efficient reductions (most carbon savings at least cost). However, in terms of consequences, models have suggested that personal carbon trading in the UK would be a progressive policy. Poorer individuals would be mostly winners, because their levels of direct emissions are generally lower.
Nipped in the bud
Under the previous Labour government a few years ago, personal carbon trading attracted positive political interest. The government commissioned research which reported in 2008). But after considering that research, the government decided not to pursue the policy, largely due to concerns about public acceptability and costs.
This decision was not universally welcomed, with an environmental committee of MPs advising the government to support more research into the subject, given its importance. My further research into public perception of the scheme has revealed a more positive attitude toward the idea than many alternatives, such as carbon taxation. There has been speculation that the government’s main objection to a system of personal carbon trading was that the policy would reveal the carbon gap between the rich and poor. Either way, there was very little research available at the time, so the official assessment of the policy was taken largely in ignorance.
Which is not to say that carbon trading is dead in the water. In fact it’s currently being trialled in Norfolk Island, an island of around 1,800 people 1,500km off the coast of Australia. While still in its early stages, the scheme has registered 350 people, and set up systems for electronic carbon accounting, feedback on carbon emissions, and rewards for participation.
Personal carbon trading is a radical approach that directly engages citizens in taking steps to mitigate climate change. It encourages discussion about who the winners and losers would be in a lower-carbon society. Research shows it could be progressive and publicly acceptable, and in the absence of other big ideas to bring about emissions reductions, it’s surely time to re-evaluate the idea’s potential to bring about positive changes.