Personal Carbon Trading - Proposals

Proposals

Current proposals include:

• Tradable Energy Quotas (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 Hillman 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.

• End-user Emissions Trading - preliminary proposal in an article by Suryapratim Roy and Edwin Woerdman which analyses some of the legal and policy nuances of an emissions trading scheme for individuals, for instance on an EU-wide scale.

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 (e.g. 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. There are two types of carbon credits, Certified Emission Reduction credits EUAs and CERs and Verified Carbon Credits.

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.