Memorandum submitted by Defra
INTRODUCTION
1. The concept of a personal carbon allowance
is one of a number of potential long term ideas being explored
by Government that could help to make individuals better informed
about, and involved in, tackling climate change. David Miliband
(then Secretary of State for Environment, Food and Rural Affairs)
made a speech[20]
to the Audit Commission on 19 July 2006 outlining his interest
in considering personal carbon trading as a potential policy option,
building on the Energy Review's commitment to undertake a study
looking at the role of "community level" approaches
to mobilising individuals. The Government remains committed to
exploring the potential of personal carbon trading.
BACKGROUND
2. The UK has a target to reduce its CO2
emissions by 60% by 2050, and the new Climate Change Bill will
make this a statutory target. All sectors of the economy must
contribute to meeting this target, including the domestic sector,
which is responsible for 40% of CO2 emissions (from
domestic energy use and transport).
3. Following the Government's Energy Review
in 2006, Government commissioned a scoping study from the Centre
for Sustainable Energy[21]
(CSE) providing an initial analysis of the ideas and issues involved
in the concept of individual carbon trading. CSE's main findings
were that:
a. by having an overall cap on carbon, a
personal carbon allowance could guarantee a certain reduction
in domestic carbon emissions,
b. it is unlikely that such an allowance
could work in isolation,
c. such a scheme might have the potential
to achieve emissions savings in a fairer way than a carbon tax;
and
d. there is little evidence currently available
about key wider issues critical to the success of a personal carbon
allowance such as public and political feasibility, technical
feasibility, cost, and relative effectiveness.
4. The Government believes that the current
system of taxation strikes the right balance between protecting
the environment, protecting the most vulnerable in society and
maintaining sound public finances. There remain many high-level
questions about whether a personal carbon allowance scheme could
be a proportionate, effective, socially equitable and financially
viable policy option, particularly when compared or combined with
existing policies and other options for controlling carbon emissions;
whether it could be a practical and feasible option; how such
a scheme might work in practice; and whether it would avoid placing
undue burdens on individuals.
NEXT STEPS
5. Building on CSE's scoping study, Defra
has developed an initial work programme designed to look further
at personal carbon trading. The work programme is looking at similar
areas and issues as those being addressed by the EAC Inquiry,
and consists of four work strands focusing on:
a. the value of personal carbon trading—eg
its pros and cons when compared to other means of seeking to achieve
the same end; their interaction with the rest of the policy framework;
b. equity issues—eg the equity and
distributional impacts of a personal carbon trading system depending
on factors such as income, household type, and geographical location;
c. public acceptability—eg on what
basis would the public consider personal carbon trading acceptable,
whether they would actually interact with such a scheme, and whether
it would change behaviour;
d. technical and cost issues—eg how
a personal carbon trading system could be run, by which sector
and type of organisation, and how much it might cost.
6. The work programme is being run in a
way designed to complement the work being undertaken by researchers
and academics such as The Tyndall Centre for Climate Change, the
Environmental Change Institute and the Royal Society for the Encouragement
of Arts, Manufactures and Commerce. The work programme reports
to a project board made up of representatives from across a number
of government departments.
CONCLUSION
7. The Government welcomes the Environmental
Audit Committee's Inquiry into Personal Carbon Allowances, and
the additional analysis that the Inquiry will bring to this area.
The Government looks forward to seeing the Committee's conclusions
and recommendations and will use these to help inform its own
analysis.
July 2007
20 http://www.defra.gov.uk/corporate/ministers/speeches/david-miliband/dm060719.htm Back
21
http://www.defra.gov.uk/environment/climatechange/uk/individual/pca/pdf/pca-scopingstudy.pdf Back
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