"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."
 | UK Environment Minister David Miliband (left) with Prime Minister Tony Blair. (Photo: Reuters) |
If you ask David Miliband, that imaginary country could be Britain in just a few years time. Miliband, Britain's environment secretary, made the above remarks in July, announcing that the UK government was looking at how British households could be made accountable for their carbon dioxide (CO2) emissions - one of the gases thought most responsible for climate change.
One proposed scheme would be to give British households an annual allotment of carbon emissions from energy consumption. Purchases of CO2-emitting goods and services - tanks of petrol, flights to Majorca, and electricity bills - would eventually be tracked electronically, similar to the way banks track account balances or airlines track frequent-flyer miles.
Consumers who exceed their emissions limit (say, 10 tons of CO2 emissions every year) would be obligated to purchase more "carbon points" at the end of the year; those who did not exceed their limit could sell their surplus.
Ideally, creating a carbon currency would encourage consumers to reduce their "carbon footprint," and give them financial incentives for doing so.
 | Picture Gallery (click on the image to start)Carbon offsetting companies promise to neutralize greenhouse gas emissions. Does it work? (Photo: Reuters) |
"It could be 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," says Miliband.
"It is also empowering because many citizens want to be able to do their bit for the environment, but there is (currently) no measurable way of guiding their decisions."
"Less politically unacceptable"
Many experts see emissions trading as an essential and economically sustainable way of cutting greenhouse gas emissions. If implemented, the plan proposed by Miliband would be the first attempt by a national government to introduce emissions limits for households. It is clear, however, that the idea still needs some development before it can be implemented as policy.
"The administrative burden for domestic emissions trading would quite high, both for the consumer and for the government," says Jonathan Pershing, head of the Climate and Energy program at the World Resources Institute in Washington D.C.
"You definitely want to raise awareness among consumers - that is a good objective - but it is not yet clear whether this is the most effective way of going about it from a policy standpoint," adds Pershing.
Others have voiced concern that domestic emissions trading would squeeze poorer households. The prospect of saving money, for example, could compel some families to keep the heat switched off during the cold winter months.
A recent paper published by the UK-based Tyndall Centre for Climate Change Research, however, suggests that domestic tradable quotas (DTQs) would be a fair and technically feasible way of cutting greenhouse gases.
"Domestic emissions trading could be implemented in around four years, if there was really a push for it," says Kevin Anderson, who co-wrote the paper with fellow University of Manchester researcher Richard Starkey. The technology for carbon accounts, says Anderson, already exists and could be implemented without huge expense.
"The big obstacle is the political one," says Anderson. "Pushing through such a plan really depends on political will and what happens with climate change in the next few years. A few more hot summers like this one and more people dying of heat stress will certainly raise awareness about the urgency of the issue."
Anderson recognizes that household emissions trading could be a tough sell to the British public, but he notes that it would probably be "less politically unacceptable" than a flat carbon tax, which has also been proposed as a way to curb national carbon emissions.
"A carbon tax takes things out of consumers' hands. What you really want to change is people's behavior and get them to start asking themselves about this thing called carbon," adds Anderson.
Parallel schemes
Emissions trading has been going on at the industrial level since the late 1980's when the first pilot projects were launched in the United States.
The first significant international initiative - the European Union Emissions Trading Scheme (EU ETS) - began in 2005, and sets mandatory, annual emissions targets for heavy emitting industries throughout Europe. Many see the EU ETS as an important mechanism for meeting CO2 emissions targets imposed by the 1997 Kyoto Protocol.
Despite some bumps on the road, such as some dramatic price fluctuations of emissions certificates, the EU ETS has been an encouraging and robust flagship in its first year.
Kevin Anderson also thinks that a consumer-based scheme, running parallel to the industry focused EU ETS, could also play a major role in reducing the human impact on the climate. Anderson says such a two-pronged approach could be "a fairer and perhaps more-balanced" way to tackle climate change.
"After all, it is consumers that consume what industry produces," he says. With many scientists pointing to a shrinking window of opportunity to avoid catastrophic climate change, Anderson believes now is the time to reduce demand for energy and carbon-emitting goods and services.
"If we are genuinely committed to keeping climate change under two degrees Celsius, then we have to change the trajectory of emissions very, very rapidly. Government has to take the lead as a matter of urgency."
editor: Valdis Wish
publishing date: August 10, 2006
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Readers' Comments:
I feel that the article doesn't press home one of the fundamental tenets of a personal carbon allowance system: that it is designed to be equitable for all segments of society.
Official figures from Defra show that, in general, less well-off households have low emissions: a personal carbon trading system would reward these households rather than penalise them - there would be no need for them to scrimp and save on fuel bills.
Agreed, there is certainly a lot more work to be done on researching such a system. I am doing some research myself at Royal Holloway College, University of London: if anyone has any further comments on pca's please let me know.
Chas Warlow, London, UK
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