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May 29, 2008

Tradable Personal Carbon Quotas and Privacy: Richard D. North explains why they would be an Oyster card on steroids

Posted by Richard D. North

Tradable personal carbon quotas have become a much discussed tool for reducing domestic and personal carbon emissions. Yet before contemplating such a move - argues Richard D. North - we should remember that personal carbon quotas would represent a massive erosion of privacy. They would be an Oyster card on steroids.

The House of Commons environmental audit committee says,

It is quite clear that if the Government is to stand the slightest chance of meeting its 2050 target [of 60 and maybe even 80 percent reductions in the national carbon footprint] it cannot afford to neglect the domestic and personal sector.
The MPs think the Government should seriously consider imposing tradable personal carbon quotas.

Actually, chaos in the world fuel markets may do much of the Government's work for it. In the meantime ministers have kicked the quota scheme into the long grass as "a concept which is currently ahead of its time". Our leaders can't be blamed for not doing much about climate. Theirs is a retail trade. When we want to move on climate change, so will they.

There's something to be said for quotas. Let's assume that carbon is bad for the planet. The rich have much larger personal carbon footprints than the poor, and there's no justification for it. Carbon isn't like money. Emitting lots of carbon does harm, having lots of money doesn't. For many people it follows that the rich have to have their carbon footprint taken away from them, and rationing is the only fair way.

Not quite. You might argue, rather, that one ought to tax carbon and simply work out how to cut the poor some slack so they can afford the new price of energy.

But taxation is a problematic instrument for inducing changes in behaviour. In the case of fuel, astronomic levels of taxation may be required to make a big dent in consumption. The social and economic effects of such a policy might be very peculiar.

Now for the argument against tradable personal carbon quotas. Cash and anonymity would have to be banished for most purchases of energy. This would be an Oyster card on steroids. It would also require a quite new sort of means-testing, as one ensured that the poor didn't sell too much quota to the rich.
In its own guarded report, the government implies that at any realistic level (that is, one that didn't reduce carbon emissions too much) quota schemes would impose more bureaucracy than would be worthwhile.

This line of argument matters, because gradualism matters. Policy-makers need to be able to say they are setting up a light-weight machinery through which they can send gentle but increasingly severe signals. This is the sort of case which favours the Kyoto protocol or the fuel tax escalator, or any other gradual increase in fossil fuel taxes (and subsidies for the poor).

The apparatus for tradable carbon quotas would be inherently cumbersome and would be so even when its benefits (carbon reduction) were very small. One might be wiser to start with other measures and see how things go. Some measures may make quotas easier to do. Maybe, for instance, identity cards may get introduced, and survive their teething problems, and go on to become a useful vehicle for tradable carbon.

Even now, the idea of carbon quotas is proving its value. It is a sharp reminder to people how little they care about climate change.

Richard D. North is the author of Rich is Beautiful: A Very Personal Defence of Mass Affluence and Scrap the BBC!: Ten Years to Set Broadcasters Free.

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