Personal carbon trading refers to the act of equally allocating emissions credits to individuals on a per capita basis, within national carbon budgets. Individuals would then have to surrender these credits when buying fuel or electricity. Individuals wanting or needing more energy would be able to partake in emissions trading to secure more credits, just as companies do now within the EU ETS.
It is sometimes confused with carbon offsetting due to the similar notion of paying for emissions, but is a quite different concept designed to be mandatory and to guarantee that nations achieve their carbon emissions targets.
There are no working schemes currently in existence. Current proposals include:
Tradable Energy Quotas (TEQs) - devised by environmental writer, David Fleming, who first published the idea in 1996 under its former name Domestic Tradable Quotas (DTQs). The UK's Tyndall Centre for Climate Change Research has been researching this scheme since 2003, and more recently the Royal Society of Arts (RSA), through its UK-government sponsored project RSA CarbonLimited.
Personal Carbon Allowances (PCAs) - described in the book “How we can save the planet” by Mayer Hillman and Tina Fawcett. Work on PCAs is ongoing at the Environmental Change Institute, Oxford, UK. The title "PCAs" or "PCA scheme" is sometimes used generically to refer to any proposed form of personal carbon trading.
Tradable Personal Pollution Allowances - originally proposed in an article by Dr. Kirk Barrett in 1995  and applicable to any form of pollution, including carbon dioxide.
These proposals could be applied on a national, or multi-national (e.g. EU-wide) basis. Individuals would most likely hold their emissions credits in electronic accounts, and would surrender them when they make carbon-related purchases, such as electricity, heating fuel and petroleum. PCAs would also require individuals to use credits for public transport. Tradable Energy Quotas would bring other sectors of society (eg. Industry, Government) within the scope of the scheme.
Individuals who exceed their allocation (i.e. those who need more emissions credits than they have been given) would be able to purchase additional credits from the open market, and individuals that are under allocation can sell.
Proponents of personal carbon trading claim that it could increase ‘carbon literacy’, thereby allowing individuals to make a fair contribution to reducing carbon dioxide emissions. It could allow the burden of reducing emissions to be shared evenly throughout the economy, rather than focusing all the attention on business and governments, and encourage more localised economies.
Personal carbon trading has been criticized for its possible complexity and high transaction costs. As yet, there is minimal reliable data on these issues. There is also the fear that personal "rationing" of allowances and trading will be politically unacceptable and any stringent limits would be viewed as a form of additional taxation or poll tax, especially if those allowances are used to buy from industries who are already passing-on costs from their participation in carbon levy or trading schemes such as the EU ETS. Some have criticised trading systems because they would not be egalitarian, allowing the rich to buy extra carbon rations and so go on polluting while the poor have to cut back.
Most proposals envisage schemes that encourage wealth redistribution from the 'rich', as they needed to buy allowances from 'the poor'. Such personal carbon trading schemes are less regressive than a tax on carbon, as some low income people are likely to be better off, whereas with a direct tax all low income people are worse off, prior to revenue redistribution. This goal is complicated by practical difficulties in measurement, and because the elderly and poor may need to purchase extra allowances themselves, as they are very often the ones with older, inefficient appliances and households.
Current proposals are national in scope, and thus cannot take advantage of the current international frameworks such as the Kyoto ProtocolClean Development Mechanism which tries to find the most cost-effective way of reducing emissions on a global scale by chanelling development funds towards the Third World and developing countries.
Related emissions reduction proposals and initiatives
Sky Trust proposal - devised by Peter Barnes and described in his book Who Owns The Sky.
Cap and Share proposal - developed by The Foundation for the Economics of Sustainability (FEASTA) in Ireland
Carbon Rationing Action Groups - groups in the UK and US that voluntarily cap their greenhouse gas emissions
CarbonLimited - RSA Ltd report proposing a personal carbon trading scheme suggested as feasible by 2013
Tradable Energy Quotas (AKA Domestic Tradable Quotas)
David Fleming's website on Tradable Energy Quotas (including his free guide to TEQs, downloadable as a PDF)
Domestic Tradable Quotas (Climate Change) Bill - a Private Members Bill submitted to the UK Parliament in 2004
Tyndall Technical Report 39 - a detailed report on DTQs (December 2005)
David Boyle article looking back from 2021 to the introduction of TEQs in 2011 - All to gain on the carbon diet? (Feb 2006)
Tyndall Centre summary of DTQ research
Original DTQs website by David Fleming, now redirects visitors to the TEQs website
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