Pay as you pollute

Neasa MacErlean
Tuesday January 24, 2006

In a few years from now you will have another plastic card in your wallet - your carbon card. You will start the year with 1,000 points on it and each time you fill up your car, you put the card in a slot on the pump and it will deduct a few points.
Each time you buy an airline ticket, it will cost you a minimum of 100 points. If you fly regularly, you may have to buy more points through the carbon market - but since it is all in the cause of reducing greenhouse gas emissions you do not mind so much.

An environmentalist's pipe dream? Not at all, but a scheme put before parliament 18 months ago in a private member's bill sponsored by Colin Challen, the Labour MP for Morley & Rothwell.
Mr Challen hopes that a national scheme will be in place by 2009, and along with 44 other MPs he is working to reduce his own carbon emissions by 25% by 2010 as an example of how individuals need to start doing their bit on climate change.

"The idea is picking up speed but it is a radical one and needs to be widely debated,' he said.

The Royal Society of Arts, meanwhile, has just begun a three-year project on personal carbon allowances. It plans to produce schools packs and run a lecture series later this year leading to the production of concrete proposals by the end of 2007.

The government - through the Department for Environment, Food and Rural Affairs - describes the subject as "a very interesting idea", but that is as far as it will go. Defra minister Elliott Morley has talked of a timetable of at least 10 years.

Politicians are wary of public reaction, and statements such as: "One has to be looking at the end of cheap air flights" from the creator of the idea, David Fleming, terrify them. But Fleming - an independent writer - is pressing for his scheme of tradable energy quotas to be rolled out within a couple of years.

"Practically all the infrastructure exists," he said.

Richard Starkey of The Tyndall Centre - a leading academic in the field - agrees.

"You would not be pushing the technology envelope. It would rely on well-established credit card technologies," he said.

Starkey has probably looked in more detail than anyone else at how the scheme could work.

Each of us would get the same allowance at the start of the year. "If people weren't particularly interested in messing about with carbon units, they could sell them back straightaway and buy them again when they needed them," he said.

The carbon market would work similarly to the foreign currency markets. You could walk into a high street bank or the Post Office and buy or sell your units there. Just as they do now with foreign currencies, the financial institutions would offer carbon units at their own prices and the die-hards amongst us would shop around for the best deals.

Many in the poorest 30% of households would stand to gain from trading. Those who do not want or cannot afford to go for holidays in the sun could sell their allowances on the market to be snapped up by frequent flyers.

Price volatility could be a problem, and this would be an area of concern for politicians. A similar scheme introduced a year ago for businesses in the EU saw prices quadruple within weeks, and a personal carbon market could be just as unpredictable.

While politicians keep a safe distance away from the RSA's research, other experts will follow it closely. Dr Brenda Boardman of the Environmental Change Unit at Oxford University points to the surprising fact that domestic UK electricity consumption rose 6% between July and September last year.

"We are going in absolutely the wrong direction now," she said.

Boardman is "deeply disappointed" that the government has done so little to encourage households - responsible for 40% of greenhouse gas emissions - to go in the right direction, and believes personal carbon allowances could be the way.

Personal carbon trading raises complicated issues. What would happen to the Kenyan economy, for instance, if the UK stopped importing mangetout - as it could well do as a domino effect of a personal carbon trading scheme? There are many such awkward questions to confront, but that should not deter the development of a promising idea.

Source: The Guardian