Original URL: http://www.theregister.co.uk/2008/05/11/personal_carbon_trading_torpedoed/

UK.gov torpedoes personal carbon credit plans

'Not a universally desirable outcome' - no, really?

By Lewis Page

Posted in Government, 11th May 2008 08:02 GMT

The British government has come out firmly against plans for personal carbon trading, diplomatically saying the idea is "ahead of its time", would cost too much to implement, probably wouldn't see widespread participation, and anyway wouldn't deliver much in the way of benefits.

The decision comes with the release today of a Department for Environment, Food And Rural Affairs (DEFRA) "pre-feasibility" study into personal carbon trading. DEFRA's investigators have concluded that the time is not right for such a scheme, and will carry out no further research. However, the government will continue to monitor developments.

The idea of personal carbon trading would be to assign every individual a quota of carbon credits, which they would need in order to buy heating or vehicle fuel, electricity, or other things deemed under the scheme to cause carbon emissions. People whose lifestyle required little of these items could sell their surplus credits to others wishing to cook food at home, take regular showers, wash and iron their clothes frequently, or otherwise hoggishly damage the environment in pursuit of unnecessary personal pleasure.*

According to DEFRA:

Personal carbon trading could potentially be justified if it were effective at encouraging individuals to demand fewer energy services. However as this may, in part, involve living in a colder house ... some might argue that this is not a universally desirable outcome.

The cost of this not "universally desirable outcome" would be high.

Implementing personal carbon trading would involve significant costs. It would require IT and banking systems, payment infrastructure, and secondary markets... In addition to the implementation, there would be ongoing costs for administration, verification, auditing and enforcement... Initial set up costs would be between £700m and £2bn. Running costs would be between £1bn and £2bn a year.

The government analysts reckoned personal carbon trading might cost us all £40 pa per head - and consume enough of our time, in working out our carbon plans etc, to soak up a further billion-odd pounds of economic activity.

On the issue of time, they noted that there would need to be a way for people who didn't have carbon smartcards - foreigners, the forgetful, those unable to be arsed, etc - to buy petrol or whatever. They noted that personal-carbon-market advocates such as Richard Starkey had suggested that people who didn't fancy spending all their time working out the best carbon deals could just flog off their allowance right away, leave their carbo-smartcards at home, and go back to living normally. But, as the civil servants dryly commented:

If the market for allowances is working efficiently there would be only a very small incentive to hold onto allowances... The amount received from selling all allowances immediately would be almost the same as the expected net present value of surrendering them steadily throughout the year.

Most people probably wouldn't bother, and the billions spent on smartcards, readers, markets, etc, would be largely wasted.

Then, the few people who were interested and carried on doing the scheme would probably not be rational traders. For instance, a right-on environment lover would very probably be an obsessive carbo-smartcard user, trying as hard as possible to reduce his or her personal carbon burden and be the most virtuous kid on the block. Such a person might well reach the point at which they could only use less carbon by installing a rooftop wind turbine, which would reduce carbon emissions at a cost of £400 per tonne of CO2 not emitted.

A fanatic might go ahead and do that; but in fact this would not be helpful. In terms of the personal carbon market it would represent "irrational trading".

A far better thing to do, from the point of both the UK economy and the environment, would be to bribe one's neighbours not to drive to the shops but take the bus instead. This might cost £20 per tonne of CO2 saved, so the righteous green hardliner could either save a lot more carbon by bribing more neighbours, or save the same as the microgeneration kit would have and still have cash to spend - perhaps on something carbon-righteous like a new plasma TV (no, really*, plasma TVs are OK).

In this way the UK would still save carbon but wouldn't economically cripple itself buying fantastically inefficient rooftop windmills.

Of course, the truly carbo-virtuous might have trouble getting anyone to talk to them about taking the bus to the shops, having skipped so many baths and put unwashed clothes back on so many times*.

Another weakness of the carbon-trading scheme is that it would probably fail to penalise many of these supposedly "low-carbon" individuals for the high greenhouse burden associated with their probable diet of lentils, soybeans and similar pulses. (It is of course well known that methane, an inevitable byproduct of such culinary habits, is a far more potent greehouse gas than CO2 itself. And yes, we know that eating meat means cows farting all over the shop - no need to write in. Our own diet is largely composed of highly carbon efficient biofuel-like liquid food).

All in all, the gov seem to have got this one right. Read much more from DEFRA here, if you've a mind to. ®


*There is a perception at the moment that reducing carbon burden in the home might be a matter of switching tellies off standby or generally eschewing the use of evil "gadgets".

A nice big plasma TV on standby uses less than 1 watt of 'leccy. In use, this rises to 400-odd watts. A fairly ordinary steam iron often draws 2,400 watts; you'd save as much juice by not doing 20 minutes of ironing as by switching your TV off at the wall for a month. The washing machine probably runs at 3kW. Skip three loads of laundry, keep your telly on standby for a year and you've still used less electricity. Etc, etc.

The big power hogs in your home - and thus the big carbon squirters, unless you live in nuclear-powered France and don't use gas - are the bath or shower, the washing machine, the heating, the fridge, and the cooker. You can probably chill out about the gadgets.