Memorandum submitted by Dr Tina Fawcett,
Environmental Change Institute, University of Oxford and UK Energy
Research Centre
EXECUTIVE SUMMARY
PCA is a promising policy option which could
deliver carbon savings in an effective, equitable and certain
manner. However, at present there remain many unanswered questions
about the practicalities, consequences and social acceptability
of the policy. This evidence summarises recent PCA findings by
UKERC and others, and identifies key research gaps.
AUTHOR DETAILS
Dr Tina Fawcett is a Senior Researcher at the
Environmental Change Institute, University of Oxford and UK Energy
Research Centre (UKERC), and has been researching personal carbon
allowances (PCA) for the past five years. As part of the "Demand
Reduction" team at UKERC, she has run a number of PCA research
workshops, published academic and popular articles, and is involved
in ongoing team research on PCA. She is co-author with Mayer Hillman
of How we can save the planet, a book which brought PCA
to a wider audience. This book has been adapted for a US readership
and was recently published as The suicidal planet: how to prevent
global climate catastrophe.
THE LIKELY
IMPACT OF
A PERSONAL
CARBON TRADING
SCHEME
1. Despite the increasing public and political
interest in personal carbon allowances/trading, it is a subject
which is currently very much under-researched, with few active
individual researchers or groups. In 2006, UKERC held a workshop
with researchers and government civil servants from a variety
of departments in order to identify research priorities for PCA
and other "competitor" policy instruments (such as carbon
taxation) (Bottrill 2006a). A long list of research questions
was generated. Included amongst the key research tasks were:
— Assessing the relative benefits of
different policy instruments.
— Investigating the public acceptability
of different options.
— Gathering better data on personal
carbon profiles.
— Researching the wider strategic policy
fit of PCA.
— Understanding the economic rationale
for different options.
Since this time, the Centre for Sustainable
Energy (CSE) have published a "road map" for research
into personal carbon trading (Roberts and Thumim 2006) and DEFRA
is currently finalising its own research programme. The overall
message is clear: far more research is required into all aspects
of PCA. Without this, the policy cannot be properly assessed and
many of the key questions about public acceptability, practicality
and likely social and economic outcomes cannot be answered.
2. There has been some partial research
on the variations of carbon emissions within the UK population.
A key study demonstrated that emissions rise with income, but
that there is also huge variation of emissions within each income
decile (Ekins and Dresner 2004). They also looked at the distributional
impacts of PCA compared with various carbon taxation proposals,
and demonstrated that PCA would be more progressive than taxation,
ie fewer people in the lowest income groups would be worse off.
However, this analysis did not include people's carbon emissions
from aviation, and of necessity used proxy expenditure data to
estimate carbon emissions in different income deciles. Recent
work carried out by a UKERC researcher, calculated the carbon
emissions from all personal travel of several hundred Oxfordshire
households (Brand 2006), including travel by private vehicles,
public transport and domestic/international air. Emissions from
household energy use were not included in this study. Two key
results stood out, the first was that air travel dominated emissions
at 70% of the average individual's travel emissions. This is considerably
higher than shown in national statistics, and may be explained
by a combination of factors including accounting methods, calculation
methodologies, and the easy access of Oxfordshire residents to
international airports. Secondly, the data showed huge variations
in personal emissions. The top tenth of emitters were responsible
for 43% of total sample emissions, while the lowest tenth were
responsible for just 1%. The highest 10% of emitters were flying
five times more than the average person in the sample. There was
also a significant link of CO2 emissions levels with income, in
particular for travel by car, air and rail. Other significant
factors included age (or position in the family lifecycle), economic
activity, car availability and household size and structure (Brand,
2007). This indicates that PCA will have very different effects
on different people, depending on their current carbon emissions,
and of course their willingness and capacity to change. While
both these sets of research are very valuable, until a large-scale,
representative carbon audit of individuals, covering household
energy use, personal transport and aviation, has been undertaken
in the UK, many questions about who would be affected by PCA are
unanswerable.
3. If PCA were to be introduced, it would
not be a stand-alone policy. It would simply form the umbrella
mechanism within which a wide range of other policies would operate
(Hillman and Fawcett 2004). Product policy using the full range
of market transformation tools (regulations, incentives, information,
voluntary agreements etc.) would still be needed to encourage
more efficient lights and appliances into the market. New and
existing housing energy efficiency and carbon emissions standards
would continue to be tightened. Greater take-up of household-level
renewable technologies would be supported. Transport and planning
policy would need to find more effective ways of encouraging the
use of lower carbon modes and, eventually, lower mobility lifestyles.
Not only would these policies enable and encourage people to live
lower carbon lives, they could also be used more comprehensively
in advance of PCA to broaden the low carbon options available.
4. It is hard to know what circumstances
would make the introduction of PCA politically and socially possible.
They are likely to include the following: convincing evidence
on how PCA would work, who would be affected, what it would cost;
demonstrations that people can adapt to and live well under a
PCA scheme, via voluntary and research trials; understanding of
the benefits of PCA compared with the alternatives (eg taxation);
identification of the many "winners" under PCA (of which
there are certain to be more of than "losers"); even
greater public and political concern for and action on climate
change.
OPERATIONAL FEASIBILITY
5. The most detailed research on institutional
and operational systems, administration and the likely cost of
personal carbon trading schemes has been carried out by David
Fleming and the Tyndall Centre researchers (eg Anderson and Starkey
2004). UKERC researchers have not done substantial work on these
topics.
6. We are currently completing a study into
the feasibility of carrying out a PCA pilot—funded by the
Esmee Fairbairn Trust and UKERC. The study has sought to incorporate
a wide range of expert opinion, by having an advisory group which
includes members from the Tyndall Centre, CSE, DEFRA and two environmental
consultancies, running two consultative workshops and undertaking
individual meetings with many academics and other experts. The
final report is due to be published by the end of the summer.
During the course of the study we have identified difficulties
in replicating a real PCA scheme within a pilot. For example,
inclusion within a pilot could not be made mandatory for participants
and the infrastructure, information and trading systems that would
be in place in a real PCA would not be present in a pilot. For
these sorts of reasons, our research is now focussing on designing
PCA "trials", rather than a pilot, where as many key
aspects of PCA as possible are tested with participants over the
course of a year. There is no doubt that running worthwhile trials
of PCA is a complex and demanding research task. Nevertheless,
we believe well-designed trials can offer unique qualitative and
quantitative data on: social acceptability of PCA (based on peoples'
experience of living with the concept for a year); the effectiveness
of PCA in motivating attitudinal and behavioural change; testing
the detailed rules of PCA; discovering unexpected reactions to
PCA, and; better understanding the complex consequences of this
policy change. The final report will make the case for PCA trials
in detail and will provide guidance on how trials should be designed
and managed, and what they might cost.
VARIATIONS BETWEEN
DIFFERENT PROPOSED
MODELS
7. UKERC is researching a model of PCA which
would cover all the direct energy used by individuals within their
household and for personal travel. This would account for around
half of the carbon emissions from energy use in the UK (where
international air travel is included, and a multiplying factor
used to calculate carbon equivalent emissions). Every time a person
paid an energy bill, filled up the car with petrol or bought a
flight, they would have to surrender carbon "credits"
from their account, or pay the additional cost of buying carbon
credits at the market price. The PCA scheme does not include the
other half of emissions within the economy, which are generated
by organisations. Clearly there would need to be a parallel carbon
capping and reduction system for the other half of the economy.
8. PCA includes more emissions in the personal
allowance than DTQ (domestic tradable quotas, the other major
variation on personal carbon trading). In particular DTQ does
not propose to include air travel or public transport. Apart from
this difference in boundaries, the two schemes are very similar
in their principles and details of how individuals would be involved.
Air travel is included in PCA for the same reason as other personal
travel: individuals can choose whether, how often and how far
they fly, and they should bear the carbon responsibility of their
choices. In practice, because air travel is predominantly used
by richer people, including air travel within a PCA adds makes
the policy more progressive. By counting air travel, there is
a greater difference between poorer groups, with on average lower
emissions, and richer groups, with higher emissions (Fawcett 2005).
9. Although in principle PCA would include
emissions from public transport, there are practical reasons for
excluding public transport from the scheme, at least in the early
years of introduction. The key arguments for not including public
transport initially are:
— surface public transport comprises
only a small percentage of individuals' total emissions;
— inclusion of public transport could
easily double or treble the total number of carbon credit transactions
per year, while only affecting a small proportion of personal
emissions;
— it reduces the need for costly infrastructure
on public transport;
— it would provide additional motivation
for individuals to switch away from private to public transport;
— it could put more onus on transport
operators to reduce their fleet emissions (as the organisations
would be responsible for all their operational emissions); and
— it is difficult to accurately calculate
the emissions associated with an individual's travel on different
public transport modes due to fuel choices, occupancy and distance
travelled (Bottrill 2006b).
10. The PCA scheme is based on the principle
that all adults get an equal allowance of carbon. But what about
children? There are essentially three options: children get no
allowance, children get a partial allowance, or children get a
full allowance. While there may be some arguments in principle
about the rights of children, most of the concerns about children's
allowances are focussed on the social and distributional effects
of allowance allocation. Preliminary research by UKERC, which
has included a number of workshops with teenagers, suggests that
a partial allowance for children, which is allocated to their
parents (as in the case of child benefit), would be the most socially
acceptable option. However, much more research remains to be done
on this topic. Further research is planned later in 2007.
11. The key characteristic of PCA is that
it is a carbon capping and reduction policy mechanism which offers
equity and certainty. It enforces a carbon cap and reduces it
year-on-year. Voluntary initiatives would not do this and are
not comparable with PCA. The policy which is usually suggested
as an alternative to PCA would be increased carbon taxation on
household and transport fuels. This takes the alternative approach
of regulating by price instead of by quantity. UKERC has held
a major debate about taxation versus capping and trading systems,
both upstream and downstream (Keay-Bright and Fawcett 2005). Without
re-running all the arguments for different policy options, the
key arguments in favour of PCA include its effectiveness, equity,
distributional impacts and certainty of delivering savings. An
alternative cap and trading policy covering household energy use
would be a carbon cap at energy supplier level, based on their
number of customers. This is being discussed as the possible successor
to the current Energy Efficiency Commitment. Indeed, this idea
was proposed by the Environmental Change Institute several years
ago under the title "AUCH"—average utility carbon
per household (Fawcett, Lane et al 2000).
PUBLIC ACCEPTABILITY
AND INVOLVEMENT
12. There has been little research into
the public acceptability of PCA. A small number of focus groups
was run in 2005 in order to explore people's reactions to PCA
in comparison with carbon taxation (Low 2005). The aim was to
begin to determine whether, and in what circumstances, individual
members of the public find the proposal acceptable. The three
broad attitudes to PCA which emerged were a lack of enthusiasm
for either PCA or a carbon tax, a preference for a carbon tax
over PCA and enthusiasm for PCA. The key factors affecting participants'
attitudes to PCAs were their beliefs about the relative importance
of the role of the state and the rights of the individual, and
their opinions on the equity, practicality, environmental effectiveness
and negative aspects of the PCAs scheme. This research revealed
useful insights which should be further explored. However, public
acceptability is not something which remains fixed over time,
it is highly context specific. The way in which alternatives are
presented to people will influence their responses. Future research
needs to be sensitive to the complexities of the concept of "public
acceptability" and how it can be measured or judged.
13. There has been practical demonstration
of public support for the idea of PCA, in the form of a quickly
growing network of "CRAGs"—Carbon Rationing Action
Groups (www.carbonrationing.org.uk). The principles adopted by
CRAGs are identical to those that inform PCA. The network was
founded in early 2006, and now comprises 35 groups throughout
the UK and beyond. There is also an increasing number of other
community initiatives throughout the country which are promoting
low carbon living. While these communities may not specifically
support PCA as a mechanism, they demonstrate the broadening interest
in taking action at a personal and community level to reduce carbon
emissions.
14. As mentioned earlier, until much better
carbon emissions profile data allied with demographic and social
characteristics is available, it will be difficult to make substantial
progress into which groups would win and lose under PCA (beyond
the initial research already carried out).
REFERENCES
Anderson, K. and Starkey, R. (2004) Domestic
tradable quotas: A policy instrument for the reduction of greenhouse
gas emissions. Tyndall Centre for Climate Change Research, Norwich.
Bottrill, C. (Ed) (2006a) Personal carbon trading:
An exploratory research and policy workshop. Workshop summary
report. UK Energy Research Centre, London.
Bottrill, C. (2006b) Personal carbon trading:
the case for excluding ground public transport. Working paper.
UK Energy Research Centre, London.
Brand, C. (2006) Personal transport and climate
change: exploring climate change emissions from personal travel
activity of individuals and households. Unpublished PhD thesis.
University of Oxford.
Brand, C. (2007) "Personal Air and Car
Travel—just don't do it!", Proceedings of the eceee
2007 summer study, held near Nice, France, 4-9 June.
Ekins, P and Dresner, S. (2004) Green taxes
and charges: reducing their impact on low-income households. Joseph
Rowntree Foundation, York.
Fawcett, T. (2005) Investigating carbon rationing
as a policy for reducing carbon dioxide emissions from UK household
energy use. Unpublished PhD thesis. University College London.
Fawcett, T., Lane, K. et al (2000) Lower carbon
futures. ECI research report 23. Environmental Change Institute,
University of Oxford.
Hillman, M. and Fawcett, T. (2004) How we can
save the planet. Penguin, London.
Keay-Bright, S. and Fawcett, T. (Eds) (2005)
Taxing and trading: Debating options for carbon reduction. Meeting
report. UK Energy Research Centre, London.
Low, R. (2005) An investigation into the public
acceptability of the personal carbon allowances proposal for reducing
personal carbon emissions. Unpublished MSc thesis. University
of Edinburgh.
Roberts, S. and Thumim, J. (2006) A rough guide
to individual carbon trading: the ideas, the issues, the next
steps. DEFRA and Centre for Sustainable Energy, London and Bristol.
July 2007
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