Personal Carbon Allowances: Could They Work?.

Original Article
September 7th, 2023


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The UK has set forward ambitious targets to be completely net zero by 2050, with all sectors seeking ways to reduce their carbon footprints. It will therefore be imperative that on an individual level we all work together in reducing our carbon consumption and finding less carbon intensive ways of living. One such way that has been suggested is the idea of a Personal Carbon Allowance (PCA) scheme.

In a rapidly advancing technological era, it is intriguing to imagine a future where brain implants have become commonplace. This scenario holds the promise of recording our daily lives and providing comprehensive breakdowns of our activities without the need for manual entry into apps on our phones. Such a development would grant individuals unparalleled control over their consumption patterns, ranging from identifying nutritional deficiencies they may be prone to, to accurately tracking calorie intake. This future scenario could also open up the ability for individuals to carbon count everything they do on a day-to-day basis and allow for the implementation of schemes such as personal carbon allowance schemes to fully take effect. However, while this vision appears to be rooted in science fiction and distant future, can these schemes realistically be implemented in our present-day society to monitor individuals’ carbon consumption?

What is a personal carbon allowance?

Personal Carbon Allowance schemes are policies designed to address climate change by allocating a specific carbon emissions budget to individuals or households. Under such a scheme, each person is given a fixed amount of carbon credits that represent their allowable emissions within a defined period – usually a year. These credits can be traded, saved or used to offset emissions.

The goal of Personal Carbon Allowance schemes is to promote individual responsibility and encourage behavioural changes that reduce carbon emissions. By providing a tangible limit on carbon usage, these schemes aim to raise awareness about the environmental impact of personal choices and incentivise individuals to make greener decisions.

Personal Carbon Allowance schemes are not a new idea; a proposal was set forward in a UK government review in 2008, however, this was written off at the time after being marked as ‘ahead of its time’. Well, is now the time to implement the scheme?

The challenges of personal carbon allowances

The idea of personal carbon allowances is, in itself, a good idea. The aim is to increase awareness and attempt to pass the onus onto consumers in reducing carbon footprints on an individual level. However, in practice there could be many issues that arise from their use.

Cost of implementation

The first major problem that would arise from the implementation of a Personal Carbon Allowance scheme is the cost to implement the scheme in the first place. A scheme of this magnitude would require an extensive monitoring and reporting infrastructure to accurately measure and allocate carbon credits. This involves significant administrative and technological resources, which can be costly and complex to establish. It would also require specific policing to ensure no wrongdoing as inevitably people may try to evade allowances in fraudulent activities, such as underreporting emissions or engaging in black market trading, which could undermine the effectiveness and integrity of the scheme. The sheer cost of implementation and ongoing support of such a scheme is already a major barrier. In a time where there is a cost-of-living crisis this would seem a major expense which could be used elsewhere.

The need for means testing

The second major problem with Personal Carbon Allowance schemes is that personal carbon allowances may not consider differences in individuals’ circumstances and needs. It may disproportionately affect lower-income households who may not have the means to invest in carbon-saving technologies or alternative energy sources. This can create a sense of unfairness, as those who can afford to buy more credits or adopt low-carbon lifestyles would have greater flexibility. For example, the main ways the UK has looked to reduce carbon emissions is through the adoption of electrifying our transport and homes through electric vehicles and technology such as heat pumps. Both are quite expensive and those from lower socio-economic backgrounds would not necessarily be able to afford the expense. We should also note that inevitably this could have a knock-on effect on people who own homes that are listed or protected as they physically would not be able to reduce their emissions in the home due to legislative restraints. This could, in essence, lead to a cultural shift where the desire to own historic and listed homes dissipates over time. Overall, on a personal basis, if PCA schemes were to be implemented, a major hurdle would be to devise a strategy of means testing the allocation of carbon budgets.

Market for buying and selling credits

Another issue facing Personal Carbon Allowance schemes would be that their very existence would introduce a market for buying and selling credits. This can lead to price volatility and speculation, potentially favouring those with financial resources to purchase additional allowances rather than encouraging behavioural changes and emission reductions. Again, this could be seen as negatively impacting those on lower incomes, where they may not be able to reduce carbon emissions unless industry does so first. Those with more financial freedom can afford to simply meet their carbon budgets by purchasing excess credits; however, those without the financial resource to do so may find themselves exceeding their carbon budgets and being fined for doing so, pushing them into debt or financial stress.

Level of impact in real terms

Lastly, the actual impact that carbon budgets would have is up for debate. While Personal Carbon Allowance schemes can raise awareness and encourage individuals to reduce their emissions, their overall impact on global carbon emissions may be limited. Climate change is a global problem that requires collective action at a larger scale, including policies targeting industries and systemic changes. Industries emit the majority of carbon emissions, and it is their reduction in emissions which will inevitably pass on to consumers. Industries switching from using single use plastic, for example, have a direct impact on reducing the carbon footprint of consumers. Tackling the issue of climate change at the source may be the better way to go than implementing an expensive project that may fall short of its goals.

What does this mean for the future of Personal Carbon Allowance schemes?

Looking to the future though, it is important to note that limiting individuals’ carbon footprints will be vital. Setting a pathway in which a form of carbon credit scheme is implemented now could be the first step on a long road to ultimate net zero individual carbon consumption. A soft implementation could be the key to getting through the teething problems of such a scheme with implementation of environmental taxes being a possible solution in the intermediate term. Eventually, this futuristic scenario may come into play; however, we need some sort of accountability of our carbon impact on an individual level now if we are to meet our ambitious goals of being net zero by 2050.

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