Annex 5
PERSONAL CARBON
ALLOWANCES
1. In his speech to the Audit Commission
on 19 July, Defra Secretary of State David Miliband expressed
his interest in the idea of personal carbon allowances (PCAs),
which he described as a "compelling thought experiment."[49]
As the Secretary of State set out, PCAs have huge potential, encapsulating
principles of fairness, individual choice and personal responsibility
in a way that few, if any, other means of allocating carbon emissions
may be able to match. They could be an extremely useful tool in
raising awareness amongst people of their own impact on greenhouse
gas emissions and—depending on the level of the emissions
cap—have a significant impact on a nation's emissions.
2. However, as David Miliband recognised
in his speech, there a number of formidable administrative, cultural
and political barriers to implementation of PCAs. Issues such
as public acceptability, burden on citizens, and whether the benefits
of their introduction would be proportionate to the costs of administration,
would all need to be considered before coming to a conclusion
on the feasibility of PCAs as a policy approach. It is important
to explore these issues further, as well as the advantages and
disadvantages of PCAs as a means to influence individual behaviour
in comparison with other tools such as upstream trading, downstream
trading, taxation and regulation.
3. We also need to consider what we might
need to put in place over the next years in order to overcome
the practical and political difficulties, were we to want to introduce
such a scheme in, say, a decade's time. Further work is necessary
to examine: which issues would need further examination and hence
any prior research that would be necessary; what kinds of pilot
studies and/or trials might be necessary; what public information
and engagement strategies would be necessary; and what legislation
would be necessary.
4. It may also be that many of the advantages
of PCAs can be gained without implementing a full-blown cap-and-trade
system. We should therefore also explore other means of involving
individuals in carbon trading, for example, voluntary trading
systems built around either carbon allowances or positive points
systems where behaviour that results in reduced emissions is rewarded,
but there is no overall cap on individual emissions. A further
option worth exploring is the use of offsetting—including
at point of purchase—ie individuals take part in the upstream
cap and trade market by purchasing and retiring carbon credits
and/or purchasing products (such as energy tariffs or fuels) where
the price of carbon offsets is built-in.
5. More generally, we need to better understand
what key factors can drive behaviour change—in particular
the balance between measures aimed solely at individuals and those
aimed at changing individual action through collective community
action.
6. Research, such as that undertaken by
Futerra for Government in 2005, shows that engagement at a local
and community level is important: because attitudes to climate
change are more likely to be changed through individual interaction;
and because climate change messages need to have local relevance
to appeal to people. It is for this reason that Defra aimed its
Climate Change Communications Initiative in large part at local
and community level initiatives.
7. However, individuals identify with different
sorts of communities: local authorities, parish councils, neighbourhood
groups, clubs, societies, faith groups or other interest groups.
In the Energy Review, we therefore announced a study to look at
the role of different "community level" approaches to
mobilising individuals, and the role of local authorities in particular
in making them work effectively. The study will build on the 2005
work conducted by Futerra on climate change communications and
consolidate lessons from existing initiatives to examine the role
of different types of community in influencing individual action.
In the light of this information, the study will also examine
what new policy options, including PCAs, could be deployed to
stimulate local action and consider their relative pros and cons.
We expect it to report to Ministers in the first half of 2007.
Department for Environment, Food and Rural Affairs
September 2006
49 See speech at: http://defraweb/corporate/ministers/speeches/david-miliband/dm060719.htm Back
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