U.K. Committee Supports Personal Carbon Trading

U.K. House of CommonsA House of Commons committee suggested last week that the U.K. Parliament create a personal carbon-trading scheme for all citizens of the United Kingdom. It was the strongest statement yet by any government in favor of an individual cap-and-trade system for buying and selling greenhouse gas emissions.

Personal carbon trading would provide a set "carbon emissions allowance" to each citizen and establish a national carbon budget. Individuals would then be able to trade their carbon credits with one another on a designated carbon market if they chose to purchase additional energy or to partake in activities that would exceed the allowed emissions limit, such as riding a plane.

The House of Commons' Environmental Audit Committee urged the U.K. government to make a greater commitment to personal carbon trading, their report says. While acknowledging implementation difficulties, the committee said such a system would reduce greenhouse gas emissions more effectively than a carbon tax or the currently employed cap-and-trade system for business and industry.

"It's the single best instrument to encourage every man, woman, and child in the country to make a low-carbon choice every day," Tim Yeo, the committee chairman, told the BBC. "The problem with green taxes is they tend to bear most heavily on poor households. This way poor households will be able to make cash rewards for their decisions."

The United Kingdom is a member of the European Union's Emission Trading Scheme (EU-ETS), and the country's Parliament is currently debating a Climate Change Bill that would require significant emissions cuts nationwide. The committee said these policies would not be enough to meet the country's goal of reducing emissions 60 percent by 2050. "Reductions in carbon emissions from business and industry will be meaningless unless accompanied by significant and equal reductions from households and individuals," the report says.

The committee's proposed personal carbon market follows a cap-and-trade framework similar to that outlined in the current Climate Change Bill. Citizens would begin each year with the same carbon quota. Some individuals, such as people with disabilities, larger families, or older citizens, may be granted larger allowances. To avoid overlapping with EU-ETS carbon credits, a personal carbon market would establish its own currency, the report says.

The carbon credits would be monitored using an identification card, similar to the plastic cards used by customers each time they patronize a grocery store, the committee said. The biggest challenge, the committee says, would be developing the bureaucracy needed to monitor each person's carbon footprint.

The U.K.'s Department for Environment, Food, and Rural Affairs published its own study of personal carbon trading earlier this year. After concluding that such a system would be "ahead of its time" and too costly, the department abandoned its work on the subject. The estimated cost of implementing the system is between 700 million and 2 billion pounds (US$1.4-3.9 billion), and it would cost between 1 and 2 billion pounds ($2.0-3.9 billion) to run the program each year, the department said.

A personal carbon-trading scheme would likely be welcomed by the growing number of U.K. residents who are voluntarily reducing their carbon footprints or purchasing carbon credits to offset their emissions. Individuals traded 5 percent of the $258 million in carbon credits exchanged outside official carbon markets in 2007, according to a joint study by Ecosystem Marketplace and New Carbon Finance.

On the other hand, a system of personal accountability would place many individuals at an instant disadvantage. As shown in a Brookings Institution study released last week, urban residents have smaller carbon footprints than rural residents. The average footprint of metropolitan residents in the United States in 2005 was 2.24 tons, compared to 2.60 tons for the average American, due largely to access to public transportation, the study said.

But a personal carbon system might also encourage these disadvantaged individuals to reduce the energy costs of their home or commute, and inspire them to lobby their local governments to support renewable energy or greater public transit, said Georgia Institute of Technology professor Marilyn Brown, an author of the Brookings study.

Students at the Massachusetts Institute of Technology, in collaboration with engineering professor Timothy Gutowski, have surveyed a range of U.S. residents to calculate their carbon footprints. Some survey respondents said they would reduce their carbon emissions by 30 percent, but none were willing to cut their footprints by as much as half, Gutowski says. If people must reduce carbon emissions as part of a community effort, he says, such opposition may change. "Lots of people don't want to be martyrs," he said.

The U.K.'s Environmental Audit Committee said that in order to gain public support, a personal carbon-trading plan would have to be equitable and not disadvantage individuals already suffering from "fuel poverty."

Ben Block is a staff writer with the Worldwatch Institute. He can be reached at bblock@worldwatch.org.