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.