The missing carbon policy

Environmental Management News

Emissions trading for industry can cover a huge percentage of emissions. However, the variable cost of carbon is presented to the consumer only as a price, and not one explicitly associated with carbon.

The 40 per cent or so of emissions directly attributable to individuals can’t be effectively confronted. This is aside from the likely society-wide impact on the remainder of emissions from public services, consumer products and so on.

Many UK commentators, therefore, see personal carbon trading as a potentially crucial component to an effective set of climate change policies, not least by making carbon visible.

Conceptually attractive, personal carbon trading would provide an equal target level of emissions for every individual – a carbon budget to manage alongside personal finances. Those exceeding the target would need to pay for additional pollution, and those whose existing or newly greened lifestyle causes fewer emissions would get paid.

It wouldn’t prevent someone from owning a huge new television or feeding their penchant for motor sports. Rather, it would represent a ‘pay-as-you-go’ system for those overshooting the target.

Like carbon trading for industry, this target would be represented by an overall cap on emissions, communicating a ‘safety net’ to the public – a sense that their individual efforts are not in vain. Perhaps it would also convey the sense that the chosen target is both acceptable and effective and, more contentiously, perhaps it would communicate more than a sense of what is an acceptable lifestyle, but also what is normal – something we all seem to strive for, however subconsciously. Who would want to be ostracised for their personal pollution?

The development of a market-based incentive for greener living could be expected to spark entrepreneurial responses to demand from those wishing to emit less, such as energy retailers offering lower carbon tariffs or taxi firms migrating to zero carbon vehicles. This chimes with the common political rhetoric about first-mover advantage for a low carbon economy, but it will need bold politicians to set it in motion.

Two important publications were released in the UK in May. The first by the environment department, Defra, painted a mixed picture and concluded the idea was essentially ahead of its time and excessively costly. This is a reasonable conclusion only if the government has the emissions covered by other means.

However, this doesn’t seem to be the case and the second report by the influential, cross-party Environment Audit Committee of the House of Commons blasted Defra for failing to take its research further. It said personal carbon trading had “real potential to engage the population in the fight against climate change…in a progressive way”.

Nonetheless, the line has gone dead for the time being. To my mind, this represents an opportunity to rethink the debate in the context of a drive for more decentralised power and local citizen engagement.

Unpublished research carried out by my project, CarbonLimited, points to a number of highly positive elements to the idea, and some probably insurmountable obstacles. While our ‘proof of concept’ piloting of a loyalty card to capture and record emissions data from fuel purchases suggests Defra’s operational cost estimates are inflated, there remain significant barriers to engaging so many actors in a new trading market.

In any case, the debate has been too narrow, the detail causing a distraction. To date, much of the debate has focused on a model called domestic tradeable quotas. Alternative models, such as Feasta’s ‘Cap and Share’ have gained greater traction, with Comhar, the Irish Parliament’s sustainable development council, showing a great deal of interest in it.

Developing a stronger public understanding of the idea will be crucial and voluntary approaches are the only option in the near term. A scheme containing only incentives will create a space for collective action, leading to stronger conversations about the merits of the idea and hopefully to some interesting grassroots variations, perhaps using the incentives to fund local energy solutions which play to local strengths.

While a voluntary scheme with no penalties doesn’t sound like it would have much impact, it has greater potential to reach large numbers of individuals, familiarising them with ‘counting carbon’ and supporting efforts to cut emissions in exchange for rewards – in effect the first stage of the necessary learning phase.

Funding such a scheme, in which individuals receive a payment of some form for living within an allowance level, presents the major challenge, but given the right interest from corporate or third sector organisations, or from central government, green innovation fed by consumer incentives could be expected to flourish.

Matt Prescott is the director of RSA CarbonLimited, a UK project researching and developing personal carbon trading. First published in WME-Environment Business Magazine.

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