Select Committee on Environmental Audit Fifth Report


If the Government is to stand the slightest chance of meeting its 2050 carbon emissions target it cannot afford to neglect the domestic and personal sector. Reductions in carbon emissions from business and industry will be meaningless unless accompanied by significant and equal reductions from households and individuals.

Existing initiatives are unlikely to bring about behavioural change on the scale required, with many individuals choosing to disregard the connection between their own emissions and the larger challenge. Personal carbon trading might be the kind of radical measure needed to bring about behavioural change.

We believe that personal carbon trading has the potential to drive greater emissions reductions than green taxation. Personal carbon trading could guarantee a reduction in emissions because it places a ceiling on the carbon available for consumption, rather than seeking to reduce demand. Equally important, a carbon allowance could be more effective at incentivising behavioural change and engaging individuals in reducing their emissions than the price signals resulting from green taxation. There is also potential for a well explained personal carbon trading system to be better received and accepted than green taxation, because instead of all households being penalised, many would actually stand to benefit.

What is needed, urgently, is a shift in the debate away from ever-deeper and more detailed consideration of how personal carbon trading could operate towards the more decisive questions of how it could be made publicly and politically acceptable. It is these questions that will ultimately decide the viability of personal carbon trading.

Opposition to personal carbon trading could be reduced if the public could be convinced of three things. First, that it is absolutely essential to reduce emissions; second, that this can only be achieved if individuals take personal responsibility for reducing their own emissions; and third, that personal carbon trading is a fairer and more effective way of reducing personal emissions than alternatives such as higher taxes. The public must be persuaded of the first two parts of this argument as soon as possible if the Government is ever to convince them of the third. Persuading the public depends on perceptions of the Government's own commitment to reducing emissions, and of the priority given to climate change in its own decision making.

Personal carbon trading will inevitably highlight existing inequalities of income and opportunity. Any instrument designed to restrict and reduce domestic carbon emissions would raise the same concerns. As with any other policy, these inequalities will need to be identified, assessed and, where appropriate, compensated for.

Personal carbon trading could be essential in helping to reduce our national carbon footprint. Further work is needed before personal carbon trading can be a viable policy option and this must be started urgently, and in earnest. In the meantime there is no barrier to the Government developing and deploying the policies that will not only prepare the ground for personal carbon trading, but which will ensure its effectiveness and acceptance once implemented.

We regret that, following its pre-feasibility study into personal carbon trading, the Government has decided to wind down its work in this area on the grounds of high implementation costs and public resistance to the concept. We recognise the extent of these challenges, but we believe that work on personal carbon trading must be continued in earnest if these difficulties are ever to be overcome. Although we commend the Government for its intention to maintain engagement in academic work on the topic, we urge it to undertake a stronger role, leading and shaping debate and coordinating research. Without action of this kind it is unlikely that personal carbon trading could become a viable policy in the foreseeable future.

We acknowledge the many difficulties that will have to be overcome in the development and implementation of a personal carbon trading scheme, not least work to bring about acceptance of such a concept and considerable further research on many aspects of personal carbon trading. However, we believe that, through designing and implementing a sensitive and moderate scheme, these obstacles could be overcome.

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