Personal carbon trading – an option worth considering

Personal carbon trading is an idea for climate change mitigation that has been gaining ground here in the UK. Although it is far from achieving mainstream acceptance, it has one particularly high-profile supporter in possible future prime minister David Miliband (see, for example, this speech in 2006).

I was recently turned on to the idea by this article by Polly Toynbee. She explains how it would work:

each year everyone gets equal carbon credits to spend on petrol, home heating or air travel. People exceeding their quota can buy more credits. People who use less can sell credits. It encourages home insulation, energy saving and less driving or flying. Since low earners use less – 20% have no car, 50% don’t fly – they can profit by selling to those with big houses, foreign holidays and gas-guzzling cars. It would be a powerful but voluntary agent for redistribution.

Personal carbon trading has all sorts of political and administrative obstacles to overcome, but there are some attractive elements. It’s fairer, more flexible and more progressive than either rationing or a carbon tax. For political reasons (according to Toynbee), the idea was squashed by the prime minister, and branded as being “ahead of its time”. But perhaps that time might come sooner than most people think.

For me, the administrative issues are the biggest concern, particularly if the system is implemented here in the UK. This country just doesn’t seem to be very good at managing these kinds of systems, with a habit of making them more painful than they should be. Here are a just a few examples I’ve noticed:

• transfers between two UK bank accounts usually take 3 working days. WHY? I just cannot fathom why a process that requires no human intervention should take so incredibly long
• the government regularly “loses” confidential personal data about its citizens
• credit cards are very hard to get – I know plenty of well-paid professionals with flawless credit histories who have been refused for no apparent reason.

My worry is that a personal carbon trading system here could be the administrative straw that breaks the camel’s back. It is projected to cost £700 million – £2 billion to set up and £1 billion – £2 billion every year in running costs. That’s an incredible amount of new bureaucracy in a country that, to my mind, already has too much.

Overall, I’m undecided, but it is certainly something that warrants further consideration.

For those who are interested in the technical details of the system, here is a diagram of how it would work:

Update: The more I think about it, the less sense it makes. As Glenn points out in the comments:

Simple solution to overcome most administrative problems – impose carbon tax/trading scheme on business and use the money to provide an equal increase in income to all citizens.

The price of goods/services will increase in line with their use of carbon, with costs then passed on to consumers. People who use less of these goods/services (whether low income or not), will gain a net benefit while there will be a net cost for those who are more carbon-intensive

As far as I can tell, the main difference I can see between Glenn’s idea and the personal carbon trading option is that PCT would make people more immediately aware of the climate change impact of their actions (or at least, some of their actions). But does that matter? The essential goals are carbon reduction and fairness, and PCT seems like a very convoluted and expensive way of achieving those goals.

Technology will save us. Won’t it? (2)

Following on from my previous post about simplistic technological fixes, dk.au at LP found a similar limitation in the debate about an Australian emissions trading system:

We also need to start discussing energy demands as social things, rather than simply a matter of correct pricing or installing a well timed deus ex machina [Ed: improbable solution to an intractable problem], if we’re going to make any real headway on climate change. As we point out, quoting Nicholas Stern and Cameron Hepburn, ‘[c]limate change policy … raises questions that are fundamentally and inescapably ethical’

He expands on this argument in a more academic article here.

Technology will save us. Won’t it?

The Economist is running an interesting debate about the energy crisis (by which they mean climate change, not energy security or peak oil), for those arguing for and against the proposition that:

We can solve our energy problems with existing technologies today, without the need for breakthrough innovations.

My first reaction was that this was a bit of an empty discussion, like arguing about which is more important – eating or breathing? Obviously we need both, and relying solely on one or the other is a recipe for failure. Why must we think one-dimensionally? Reality is rarely so simple.

The other limiting aspect of this debate is the embedded and unspoken assumption of purely technological solutions and innovations. This is a dangerous fantasy. The reality is that social and cultural factors must be part of any coherent solution to the energy crisis. Our attitudes to the way we consume energy, transport ourselves, organise our economies and arrange our cities are just as important as the technologies we use.

Fred Steward, one of my favorite academics, points out in this paper that we need a much broader concept of innovation than pure technological advancement. The challenges of environmental sustainability are vast and complex are we cannot make the complacent assumption that some entrepreneurial inventor or well-funded research lab will deliver us a quick fix. Steward argues for a more integrated approach:

Policy and research attention has traditionally been limited to profit-oriented science-based innovation with a consequent emphasis on generic technologies such as machine tools or microelectronics pushing change upon society. Sustainability policy has been divided into two camps: one promising a breakthrough technical solution that will allow us to continue to live as ever before; and another that suggests we all change our behaviour, boiling only half a kettle and cutting down on flights.

However a new model of ‘sociotechnical’ transition has emerged, giving greater weight to the interaction between many actors in achieving such large-scale changes. In this, technical developments and social change combine to displace the incumbent companies, principles and priorities with a new arrangement.

This kind of nuance is conspicuously absent from most debates about innovation and the future of energy.

Coal – when too much is never enough

Richard Heinberg posted an interesting article last week about the possibility of future declines in coal production, and the implications this might have for climate change.

Although it is by far the most abundant fossil fuel resource, our reserves of coal obviously will not last forever, and some estimates suggest that it may be only a decade or two before we start seeing the sort of supply restrictions we are seeing now with oil.

Whether you see this as a good or a bad thing depends on your perspective. Either way the results could be dramatic. Most climate activasts are coming to see coal as the main bad guy in the climate war. Prominent UK environmentalist George Monbiot, for example, recently declared that he “no longer cared” about being anti-nuclear, as the fight against new coal plants was more important. On the other hand, with oil and gas production on the decline and renewables disappointingly slow on the uptake, policy makers in all of the world’s largest economies are likely to see coal as vital to ensuring the lights stay on. Despite the rhetoric, when the policy objectives of energy security and climate change are in conflict, there is no doubt which will triumph.