Tory MP calls for personal carbon-trading scheme

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This article is part of our special report Products for a greener planet.

SPECIAL REPORT / The chair of the British Parliament’s energy and climate change committee has called for the launch of a pilot personal carbon allowance (PCA) trading scheme, which could be based in his own constituency, and funded by the private sector and possibly the EU. 

Tim Yeo, a former environment minister, told EURACTIV that with interest in emissions trading rising abroad, the time was right to try out the idea in practice. 

“I want to see personal carbon trading and I’d like Britain to be a pioneer in this,” he said.

“We’ve pioneered a number of solutions to climate change, and we’ve had an intellectual leadership role, so it would be good to push for a pilot project, here in the UK.”

“I have volunteered my own constituency as an area for a pilot scheme of this sort,” he added. “I believe it could be funded entirely by the private sector so there would be no taxpayers money involved.”

Yeo added that he envisaged funding from big retailers or financial institutions seeking to improve their public image, but that he had “no objection” to EU funding for the pilot scheme.

Earlier this year, Coca-Cola and the Carbon Trust launched their own studies into the feasibility of such a system.

PCAs are an extension of the cap-and-trade principle behind the EU’s Emissions Trading System (ETS) to consumer and household activities – from heating to holidays abroad. 

Citizens whose emissions fell beneath an agreed cap would receive a rebate while those living more carbon-profligate lifestyles would have to pay to offset their emissions. 

An idea whose time is yet to come

People would “find it easy to understand and they might even find it fun to operate,” Yeo said. But the idea has widely been viewed as ahead of its time.

In 2008, the UK’s Department for Environment, Food and Rural Affairs (DEFRA) rejected the idea on grounds of public acceptability and cost, despite support for it from the then-environment minister and current Labour Party leader, David Milliband.

But Tina Fawcett, an expert in personal carbon trading at Oxford University’s Environmental Change Institute (ECI), believes this may have been a blessing in disguise, as proponents were trying to do too much too soon.

“Personal carbon trading got too much political attention when there was very little in terms of a research or support base, so it was easy to critique,” she told EURACTIV.  “If we’d been five years down the line and a lot more research had been done, there would have been more information to base the debate around.”

She welcomed Yeo’s call for a pilot scheme, which she said would cost somewhere in the region of €620,000. “I don’t see why it shouldn’t be an EU-funded project,” she said.


But antagonism to the personal carbon allowance, or PCA, idea spans the political spectrum.

Climate sceptics and free market-advocates see it as a needless assault on personal liberty, while environmentalists and leftists argue that it will allow the rich to offset jet-set lifestyles, while doing little to address climate change.

“PCA’s are a distraction from where pollution is happening and where the responsibility lies for it,” said Tamra Gilbertson, a founder of the Carbon Trade Watch group, which opposes all emissions trading schemes.

“We should be taking action at the source by keeping petroleum, oil, and other fossil fuels in the ground, and holding polluters and governments [that do not] responsible,” she said

Social equity was also a “huge concern,” she said “because in theory people who have resources and money will buy more credits and pollute more [than] people who don’t.”

The social equity debate

Fawcett agreed that the scheme could be construed unfair, but added “that’s capitalism really. The rich are richer. It’s not a function of the policy.”

“The reality is that richer people have choices that are not available to poor people across the whole spectrum of life,” Yeo agreed. “Carbon trading comes into that category like everything else.”

But it would still be “progressive for poor people” he argued, as it offered cash benefits to those "who live in below-average homes and perhaps do not have air conditioning or swimming pools, are willing to keep their room temperatures at 19 or 20 rather than 22 or 23 degrees, and who may have one shower a day.”

Fawcett described personal carbon trading as a politically neutral attempt to address the climate change problem, even if vulnerable constituencies such as pensioners, the disabled and poor living in energy inefficient homes would need special consideration.

“It is using trading so you could say it’s a Market Based Mechanism, but it is also a regulatory mechanism because it imposes an absolute cap and says ‘this is how we’re going to share it out’. It is not really a policy of the left or right,” she said.

'Thousands of alternatives'

For activists like Gilbertson, there are “thousands of alternatives” to PCAs, based on “working towards real and sustainable change with communities in struggle against extractive industry projects”.

PCAs anyway present multiple technical and implementation issues she said, and these are formidable.

Proponents of the scheme have yet to decide, for instance, how to tax international travel, whether a scheme can be implemented in one country, what computing and administrative systems to use, and how and whether carbon allowances should be extended to children.   

Disinterest among policy-makers is another major obstacle to the idea’s development.

But a recent ECI research paper found that although press articles about PCAs had dropped dramatically since a high point in 2007, there had been an explosion in academic research papers, suggesting that the idea was still bubbling away beneath the surface.

Distraction or not, the PCA debate may still have some way to run.

Personal carbon trading is an umbrella term covering a variety of experimental ideas to reduce carbon emissions by giving individuals responsibility for managing their energy-related emissions. 

In theory, personal carbon allowances could be used for energy use in individual households and for personal travel, including air travel. Individuals would be given an equal number of free allowances which would be tradable and reduce year-on-year in line with national emissions reductions targets.

Tradable energy quotas are a related scheme in which individuals would get free tradable quotas to cover average household and surface travel-related energy use, while companies would pay for their tradable energy quotas by auction. 


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