Tradable Energy Quotas
In 1996, David Fleming first brought the idea for personal carbon trading into the world with a pamphlet about Domestic Tradable Quotas( DTQs) – a policy mechanism designed to guarantee equal access to energy during a shortage. It was later, when the Tyndall Centre and others saw its potential as an instrument of policy to curb carbon emissions, that he rightly renamed DTQs as TEQs – Tradable Energy Quotas. This move seemed odd at the time. It added a layer of confusion to a concept already challenging to communicate and seemed in some ways to counter the surge of interest in climate change mitigation, but it may well have set it up for a crucial future role. With the focus of climate change policymakers rapidly switching from mitigation to adaptation and with a public no longer much interested in‘ carbon’, the focus of TEQs on energy gives it a far better chance of being understood, especially by those communities already searching for a tangible, communal and effective way to tackle resource shortages. Energy, alongside water and food, is a more potent currency than carbon can ever be. Access to it may one day come in the form of a Tradable Energy Quota or some variant of it.
Why not just tax carbon?
The argument for stronger carbon taxation is clear and logical: It’ s easy; governments are good at tax; they know how to do it; and the all-powerful Treasury likes it. However, set the tax too low and no-one notices it, set it too high and people get angry with it or can’ t pay it. So there’ s a problem with carbon taxation – it’ s far too blunt an instrument. The problem with carbon emissions is that they are a classic tragedy of the Commons. The cost to each individual of safeguarding these atmospheric commons feels too high for any obvious benefit which accrues to the individual from doing so. This makes it difficult to price properly. And if your neighbour doesn’ t pull their weight, then your pain will result in no gain. Why curb emissions in the UK when Brazil, India and China are increasing emissions at such a phenomenal rate? Why switch your lights off when your view of Teeside, Docklands or Birmingham City Centre is one of an illuminated night time courtesy of business and industry? A personal carbon tax can’ t answer these questions, but what greater incentive to change your lifestyle than when you contribute to the collective achievement of a group or community of others like you? It’ s the group-effort element of personal carbon trading that is its greatest attraction, as well as its greatest hurdle.
Where next?
In work I led looking into personal carbon trading at the RSA, we concluded that personal carbon trading needed to become much more localised before it could be considered as a viable instrument of policy in the near-term. It also needed to be deconstructed into realistic and achievable component parts. In so doing, its essence was of course essentially lost – what use is the scheme unless it guarantees a whole-economy limit to emissions? However, if it’ s the group effort element we are seeking to build – visibility and participation through day to day interaction with the scheme – then we need not worry about starting with a low price for carbon credits, because it’ s not the economics that will drive change at the outset anyway, it’ s the social impact. In trying to work out how to parcel up the idea and develop it in stages, we may have unwittingly been evolving precisely the right kind of policy intervention – locally based incentives to tackle local resource scarcity in a fair, inclusive and citizen-centred way. This would support the now crucial adaptation agenda and need not ultimately be about carbon emissions. More likely it would be about energy – subtly different. David Fleming was always one step ahead. revolutionise. it 59