Back in May 2006, when David Miliband was Environment Secretary, he outlined a new and exciting way to reduce carbon emissions: personal carbon trading.
Two years later, the Department for the Environment, now led by Hilary Benn, recently came out to say that the policy won’t be investigated beyond a ‘pre-feasibility study’.
With set-up costs estimated at as much as £2 billion it’s not hard to see why politicians are shying away from the idea, but what’s been happening outside of the Government studies?
And is Hilary Benn right to halt further investigation into the policy? The most robust vision of how a personal carbon trading system would work has been laid out by David Fleming in his work on Tradable Energy Quotas (TEQs), for more on which see http://teqs.net
Under the system, national emissions are split between industry and individuals: 60 per cent (industry emissions) would be covered by a high-level cap-and-trade scheme resembling a more stringent version of the current European Emissions Trading Scheme (ETS), with the remaining 40 per cent allocated to individuals who would trade among themselves.
Those who want to continue driving their 4X4s and flying around the world would need to pay for their lifestyles by buying additional credits, while those with a low carbon footprint could cash in their carbon chips (in Miliband’s words, the scheme ‘has a simplicity and beauty that would reward carbon thrift’).
Initially, the cap could be set close to existing emissions levels in order to give the economy time to adjust, but over time it would reduce in line with the principles of contraction and convergence (an international framework for emissions reduction that is gaining steady ground among influential policymakers).
Crucially, under the scheme emissions permits would only need to be surrendered when purchasing fuel or home energy – gas and electricity – plus (in some versions of the scheme) flights. All other emissions would be covered by the industry trading scheme, with the knock-on effect of carbon-intensive goods (such as asparagus shipped from Indonesia in May) being more expensive to the consumer.
As well as addressing the possible costs of introducing the scheme, the study also looked at public acceptability. Although the notion of a personal carbon footprint is now relatively mainstream, there is quite a gap between understanding an annual footprint and coming to terms with managing the intricacies of a carbon budget.
Torchbox, a web development company spurred into action by Miliband’s original comments, felt it could play a part in helping bridge the gap between day-to-day understandings of energy and fuel use, and a robust policy proposal. It came up with The Carbon Account, an online carbon calculator that, instead of simply giving a snapshot annual footprint, allows users to keep coming back and entering car mileage, gas and electricity meter readings, and details of any flights.
The resulting site – www.thecarbonaccount.com – lets users see their monthly emissions plotted on a graph, clearly visualising the seasonal variations in domestic emissions and how taking a flight hugely impacts on your carbon footprint (one long-haul flight is roughly equivalent to driving a car 10,000 miles a year). To follow through the logic of personal carbon trading, a tool such as the Carbon Account could help communicate the notion of having a ‘carbon balance’.
Just like a normal bank account, it would be possible to go into debit or credit depending on the current cap on carbon emissions. Among the 800 users currently registered with The Carbon Account, a handful are part of Carbon Rationing Action Groups (see www.carbonrationing.org.uk).
Where the Government is deliberating, some people are getting on with it: these small but vociferous voluntary groups have sprung up around the country with the purpose of closely monitoring and reducing their carbon footprint. Some focus on sharing reduction tips, while others have gone as far as to set a target and start trading among themselves.
There are 28 such groups, including 12 start-ups that have not yet decided whether to trade. As the groups experiment with the use of online tools to monitor, reduce and ultimately to trade, some interesting ideas are emerging about how the internet could play a part in the ultimate design of a personal carbon trading scheme.
The Government’s own carbon calculator – Act on CO² – has sitting behind it a calculations engine that is freely available to any group or organisation wishing to get straightforward access to standard carbon conversion factors.
The so-called Avoidance of Mass Extinction Engine (AMEE) is being run by a private company on behalf of DEFRA, on the condition that the programming code is open source, meaning anyone can copy and contribute to it (see http://amee.cc). AMEE also has a wiki (think Wikipedia) to discuss all of the different conversion factors.
All arguments about emissions factors – government figures or otherwise – can now be aired publicly. Linking the AMEE database to a personal carbon trading system could yield interesting results in terms of transparency and collective ownership of the necessary infrastructure. Similar concepts can then be applied to the trading itself.
While the Government’s pre-feasibility study focused on the set-up costs involving conventional banking infrastructure, some other quite different alternatives are being proposed. Trading between individuals is now a very real possibility because of the internet, and it’s interesting to note the emergence of sites such as www.zopa.com, which offers ‘loans between people, not banks’. If the objective is to move towards a more localised and distributed society in terms of energy economics then the web could be crucial.
Logical arguments about cutting out heavy infrastructure become more tangible in this light. The internet has already revolutionised numerous sectors; maybe we now have a chance to do it for energy and the environment.
In keeping with the spirit of online collaboration, combining ideas such as cooperatively owned windfarms (the newest one to crop up is at Westmill near Swindon) with personal carbon trading could bring a whole new sense of community empowerment. Instead of simply relying on the green-mindedness of people concerned about climate change, personal carbon trading could give real financial incentives to those people looking to promote renewable energy in their community.
Limited literature exists on how this would work in practice, but the Zero Carbon Britain report by the Centre for Alternative Technology includes personal carbon trading as a key part of its robust vision.
So what next for personal carbon trading? The Environmental Audit Committee – a body of MPs established by Labour in 1997 and currently headed up by Conservative Tim Yeo – reacted swiftly to DEFRA’s pre-feasibility study, saying the Government should go ahead with plans to investigate further the policy despite the conclusions of the report’s authors.
Hilary Benn has stuck by his department, pointing to a number of non-governmental studies looking into the policy (the Institute for Public Policy Research and the Royal Society for the Encouragement of Arts, Manufactures and Commerce both have projects underway). I
t’s clear that committing to something so radical would not be an easy choice for any politician. However, with soaring oil prices, and decades of economic growth finally coming to an end, it’s looking increasingly unlikely that things will be easy for anyone.
This article first appeared in the Ecologist July 2008