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Carbon Allowances

The logical conclusion of a focus on 'one planet living' is that we all need to curb our own carbon emissions - after all households constitute 44% of the total emissions (energy from houses is 27%).  Today I am using the Audit Commission Annual Lecture to sketch out a thought experiment of what it would be like to 'spend' carbon, save it and trade it in the same way we do with money.

The Tyndall Centre Report Domestic Tradable Quotas: A policy instrument for reducing greenhouse gas emissions from energy use set out some of the technical issues in December 2005.  The principle is simple: there would be a decision about the nation's annual level of carbon emissions, permits/quotas for that level would be issued on a per capital basis (probably for personal food, household energy and travel emissions), and those who spent under the wuota would be able to sell to those who spend above.

There are a huge range of imponderables and huge range of technical questions about feasibility.  But we need to test other policy answers against the most radical options if we are to make the most progress.  I would be interested in views.

PS.  Of course the high energy emitting business sectors, and following the Energy Review the medium public and private organisations, will be covered by their own versions of emissions trading.

posted on 19 July 2006 19:41 by David Miliband
[Post a Comment] ::


# 19 July 2006 23:16 Howard Meadows wrote:
re: Carbon Allowances

I simply don't understand how this scheme would be remotely fair or equitable. If you're rich you just buy as many carbon credits as you want and if you're poor its just tough.
Its the same logic that punishes me for having an old car that isn't quite as fuel efficient as a new one, despite the fact I'm reusing resources others would dismiss as scrap.

It seems to be enlarging the gap between rich and poor under the guise of public responsibility in a similar manner to the way common law is being eroded by mechanisms such as the current focus on police powers, summary justice and denial of trial by jury. All part of a bad trend... The cost of my electricity and gas is already heavily effected by market forces, including the effect of the power and utility companies having to buy in carbon credits, so why introduce personal credits if it isn't to limit my freedom and right to travel? If you fly on Easyjet or Ryanair you get what you pay for, bad service and cancelled flights, and a higher fare price will be inevitable anyway as aviation fuel costs and/or taxes are raised.

The government should be doing things such as building up a viable public transport infrastructure outside of London. The tram in Salford / Manchester is a good example and all the old train lines closed in the 1950 & 60s could serve as the basis of a new tram network. (I'm thinking in particular of the guided bus scheme to join Cambridge and Huntingdon which is a missed opportunity to enlarge the development of tram /light railway usage across the UK).


# 19 July 2006 23:38 Geoffrey Hollis wrote:
re: Carbon Allowances

I read the Tyndall Paper with increasing incredulity. This idea is completely impractical.

Who would administer the complicated scheme that is described?: The Home Office (when it is eventually fit for purpose)? Defra (when the Rural Payments Agency is working properly)? The Treasury (who have failed miserably to handle tax credits)?

The authors assume that it would be worked through the mechanism of debit or credit cards but do not apparently realise that a large chunk of the population do not own such cards.

Lastly, how is the average family likely to react to such a novel idea? A third of the families that were sent vouchers for £300 by the Treasury when they had a new baby did not bank them, apparently because they could not handle the paperwork. What chance is there that these families would be up to the challenge of carbon trading???

David, don't run with this one if you want to retain any credibility.


# 20 July 2006 02:23 Paul Joseph wrote:
re: Carbon Allowances

it's fair because the better off tend to use more carbon - they own cars (the less well off do not), and the cars they own tend to use more petrol; their houses are bigger and require more energy to heat; and they travel more, especially by plane. Under a personal carbon trading scheme, they'd only be able to do all these things if they purchased additional carbon credits. Who would they buy them from? The less well-off, who would typically need fewer credits and could sell any excess for profit.

So in effect, you would be rewarding some people for the environmental benefits of things they already do (or rather, don't do): not driving such fuel inefficient cars, using less energy, and not flying. And you'd be making people that do use more carbon pay the full social cost of doing so. What's unfair about that?


# 20 July 2006 09:32 Serena Parker wrote:
re: Carbon Allowances

I think the idea of personal carbon allowances is excellent. It is crucial that the allowance is set low enough to enable the necessary cuts of at least 60% in carbon emissions, and that a firm ceiling is set, to prevent the irresponsible wealthy from consuming vast excess.

In my household we don't have a car, a fridge, central heating /cooling etc., so we have really low fossil fuel bills, and hardly make any rubbish. We wash our clothes by hand and never go on foreign holidays or planes, so we're hoping that personalised carbon allowances are brought in as soon as possible.

Everyone has to take responsibility for conserving the environment.


# 20 July 2006 09:50 Robert Metcalfe wrote:
re: Carbon Allowances

Now while I agree on a system where individuals should be given incentives to make the correct decisions, it seems that this system places the environmental problem onto the consumer, while the firms are being somewhat ignored. If prices perfectly reflect externalities and the optimal management of resources, then there would be no need for these cards, since prices would be correct. Therefore, rather than make firms internalise their external costs, they will force consumers to try to incorporate this into their decision making. At an extreme, does this mean that pollution will not be fully internalized by industry in the future. I think most economists would agree that it is far better for firms to internalize the costs and let prices determine the outcomes, rather than place all this information on the consumer.
Indeed, you find that lower income groups have greater imperfect knowledge, especially of these environmental costs, so I would perceive this as somewhat regressive (also would this increase the black market since purchases made by money will not be carbon fined?).
Furthermore, total emissions might not be reduced since higher income groups will have the money to ignore these carbon fines and carry on in their consumer patterns. Indeed, firms would be willing to pay a large amount for these credits as to carry on polluting, and even increasing pollution, which means that the poor could be forced out of the market.
This is not an idea that will solve our rising emissions problem, and regulating businesses, such as the aviation industry, so as to internalize their external costs would be a much more efficient way or reducing emissions. At the end of the day, prices should reflect environmental costs.


# 20 July 2006 10:53 David wrote:
re: Carbon Allowances

All but the most extreme Luddites would agree that carbon use must be restricted and quotas imposed if we are to minimise the effects of increased atmospheric CO2. Indeed, a press release ( from the Tyndall Centre includes the following paragraph:
“The Government's target of a 60% cut in carbon dioxide by 2050 is based upon the amount of carbon dioxide in the atmosphere that scientists say is safe to avoid dangerous climate change. More recent research suggests that the global 60% target may have to be increased to 90%.”
However, what is the point of setting limits on the one hand, if the opportunity and necessity to increase carbon emissions is not also restricted? Is it not a frustrating irony the same taxpayers who fund energy-saving home insulation grants are also funding new road-building programmes that will encourage more car use and more carbon emissions?
A case in point is in South Dorset. A Government planning inspector concluded that a new road into the Weymouth cul-de-sac was unnecessary on socio-economic grounds, and because of the effect upon the environment in an AOB. The County and Borough Councils appear to know better, and have ignored the Inspector’s conclusions, using the (more irony) ‘green’ 2012 Olympics as an argument, suggesting that the road is essential for the influx of visitors to Weymouth and Portland. (Now, there is no end of wheeling and dealing under way to obtain government funding and planning permission)

David Milliband; you mention the need to test policy answers against the most radical options if we are to make progress. Diverting investment away from new roads and into encouraging the use of public transport is not exactly a radical argument.
It is demonstrable common sense, and demonstrations of intent are essential if the public is to be dissuaded from the “yes, but I’m a special case” mentality, and effectively become prepared to make small sacrifices in their use of carbon-based energy. Would that not in turn ease the introduction of carbon-credits? Indeed, you seem say as much as your fourth ‘argument’ in your speech to the Audit Commission, and in your comment that “the challenge is to translate awareness into action”.

There has been a lot of talk, but too little action upon a matter that – whilst it won’t affect me - will most certainly affect my grandchildren. Your speech to the Audit Office reinforces what environmental groups have been saying for years. The only difference is that you are perhaps in a position to make it happen.


# 20 July 2006 12:53 Colin Challen MP wrote:
re: Carbon Allowances

Howard raises questions of equity in relation to a possible carbon allowance, but of course those who need more carbon credits would have to go to those with spare to sell - and those are the people who use less energy. Thus the scheme would reward those who used energy wisely and penalise those who didn't. This is both equitable and fair, and would encourage the wider use of energy efficiency measures and new green technologies. Since the obvious alternative is to raise more carbon taxes, one has to question whether that would be fairer - I would suggest not, since such taxes, without a huge and no doubt complicated system of tax credits, would as most taxes are be regressive. With personal carbon allowances, everybody starts off with exactly the same allowance, regardless of wealth.


# 20 July 2006 13:08 David Thorpe wrote:
re: Carbon Allowances

This is an idea whose time has come. Much research has already been done into making it as fair as possible. You can't expect it to solve problems of inequity which already exist in the world - the rich will always be able to buy themselves a way out, and survive catastrophes better than the poor. But properly run, the scheme would protect the fuel poor, and allow low carbon consumers to make money from the rich people Meadows mentions.
Brenda Boardman, of the Environmental Change Institute at Oxford University, is running a feasibility study on the introduction of personal carbon allowances and trading, and would like to run a pilot scheme, perhaps on the Isle of Man. She proudly carries round a mock-up of a carbon credit card.
The success of such a scheme will ride on the amount of the overall, yearly decreasing, cap on emissions, which must be carefully fabricated and monitored. Directly linked to this is the price of the units. As we've seen with the European Carbon Trading Scheme, the wrong price results in failure to achieve the scheme's goals and discrediting of the whole scheme.


# 20 July 2006 14:22 Dr Morris Bradley wrote:
re: Carbon Allowances

Yes, as always, the rich can buy privilege on this scheme but the scheme is fair in giving the same allowance of carbon emissions to everyone. There would be strong motivation for everyone to reduce their carbon emissions in self-interest and knowing that everyone else is affected in the same way. There is no practical difficulty in working the scheme and it would help to persuade the public that carbon emissions must be reduced, and as public attitudes change that reduction can be increased substantially as our future and our children's future requires. This scheme could bring back to Labour the support that has been squandered so recklessly.


# 20 July 2006 14:35 Chris Wild wrote:
re: Carbon Allowances

You sir are an idiot.

How is your proposal any different than adding a tax to high carbon emitters - the outcome is exactly the same - I end up paying more money in order to 'do things' that burn more carbon, but your proposal adds complexity by the need to support a parallel currency infrastructure.


# 20 July 2006 14:49 Fleur Corfield wrote:
re: Carbon Allowances

I have to agree with Howard, being on a water meter and at the lower end of the economy I am careful with the water, my neighbours at a higher economy level happily user their water in anyway they wish (like constant lawn watering). This option is worse, I have no choice but use the carbon emissions I use, if we had other (reliable) transport or energy options we would use them. Surely this should be aimed a companies and then individuals once they have choice about their energy / transport uses? Perhaps this is viable in a city (?) but certainly not in the country. Again the car example by Howard is a good one, our car is W reg - just as economical as the X reg but they get better tax cuts.


# 20 July 2006 15:39 Kirsty Sparkes wrote:
re: Carbon Allowances

Well there's a surprise - the ID card scheme raising its head again. Don't try to impose Orwellian control systems on us under the guise of "Green Politics".

Why is the government so intent on making things complicated - want to tax carbon then why not put taxes up on things like gas, petrol etc. I suppose the reason you wont do that is that people will see if for what it is - another tax hike.


# 20 July 2006 16:51 James Tythe wrote:
re: Carbon Allowances


# 20 July 2006 17:32 Nathan matthew wrote:
re: Carbon Allowances

Im pretty excited at this idea and agree with the general principle.
Carbon trading seems the easiest way of presenting the true cost of activities to individuals and companies and having the market react accordingly - im unclear how companies etc would internalise costs that they dont pay (because some other sector of society deals with it).
It also encourages responsibility and interest.
For me its the trading element that makes this radical - why not make a profit from conserving rather than consuming ?.

I really hope you find some ways to introduce this as apart from the obvious environmental benefits, this could be one of the most egalitarian pieces of legislation since the formation of the welfare state


# 20 July 2006 17:33 Matthew Ledbury wrote:
re: Carbon Allowances

I’m pleased to see that a senior minister has at last had the nerve to stand up and advocate this policy. If we are to seriously tackle climate change, then there has to be an overall cap on carbon emissions that is then progressively brought down. Personal allowances are the only way we can sensibly reduce overall emissions in a way that is equitable, ensuring that every citizen plays their part.

The “If you're rich you just buy as many carbon credits as you want and if you're poor its just tough” argument is nonsensical – this is exactly how the purchasing of fuel, cars or whatever works with money at the moment. The advantage of personal carbon allowances is that you are giving free to every person the right to a supply of carbon that will at the very least be enough for their basic needs. If carbon junkies want more to get their fix to satisfy whatever carbon-intensive behaviour they indulge in, then they are free to buy more permits from those who choose not to use theirs up – meaning that those who are responsible in their use of carbon, whose general lifestyle is not particularly polluting, or who are just too poor to afford to consume much anyway can actually financially benefit from their responsible behaviour, unlike at the moment.


# 20 July 2006 19:08 Claire Hazelgrove wrote:
re: Carbon Allowances

How would such a policy become workable? Would we all have a card which we had to present when re fuelling our cars and then be told that we could not have any fuel etc if going over this limit? And what about those who commute and/or have to travel long distances, would individual situations such as these be taken into consideration all would we all be measured by the same ''joe bloggs'' standard? Would this scheme not discourage the ordinary citizen from travelling to other countries and possibly inhibit cultural knowledge etc? In principle, the idea of restricting carbon emissions is obviusly desirable and necessary but I'm just not sure whether this is the right way to go about it. Those who do not, for example, travel much now would be rewarded and their lifetyle would not be affected in the same way that a commuter's would be as if they do not work for a big business, as you noted earlier, then this may lead them to have to look for another job or home. Additionally, is it a good idea to allow people to be able to actually sell their carbon share if it is not being used as surely the legitimacy of the shares would be almost impossible to police and should some citizens be made to feel reliant upon others allowing them some of their quota in order to carry out their everyday routine? Surely finding ways of improving machinery/vehicles/housing resulting in heightened carbon efficiency would be both more practical and desirable in that some people's lifestyles would not be so strongly affected. Employing restrictive measures such as these should surely be a last straw when there are still steps to be taken in attempting corrective measures?


# 20 July 2006 19:20 Mark Johnston wrote:
re: Carbon Allowances

This is an excellent idea that I have supported for some time. I haven't the time to do a feasibility study of carbon allowances, but I do trust the Environmental Change Institute, and if they strongly support it - which they do - let's go for it.
My only concern is that the usual vested interests that lurk around the lobbies will find a way for Ministers to yet again dilute the strong action that is required, and come up with something half-baked that will sound as good, but achieve nothing (who me, cynical?).


# 20 July 2006 19:57 Sam wrote:
re: Carbon Allowances


How does your personal carbon quota scheme improve on a scheme where those same fixed tradeable carbon permits are instead sold to the producers of petrol, heating fuel and electricity?

In both cases, the effect is for the effective price of fuel and electricity to rise due to the limited supply (in your case, the price is shared between the price of the petrol and the value of the carbon permit that you have to use), but your scheme seems to require several orders of magnitude more bureacracy, a nationwide carbon-Visa network and a large sum of taxpayer's money.

Where is the advantage in your scheme?


# 20 July 2006 20:14 Devil's Kitchen wrote:
re: Carbon Allowances


Have you lost your mind? Impractical and, let's face it, redolent of police state control. We already tax emissions: if you want people to use less fuel, then you tax petrol. If you want people to fly less then you tax the fuel, etc.

Personally, I think that you have gone insane.



# 20 July 2006 21:38 Rahul Sinha wrote:
A wonderful idea!

Ok, first I'll undercut my credibility...

I'm an American. (I'm a Democrat/I didn't vote for Bush/I don't eat babies...)

That said, I wish we'd adopt this proposal. It is utterly brilliant and has many ancillary benefits that make it more compelling than any alternatives.

a) On Rich v Poor and the inequality of the system
This would be compelling except that any carbon tax is equally inequal, except the poor who are not over-using don't have the option for another revenue stream. The solution is increasing the minimum wage, the UK equivalent of EITC (a negative income tax, where you'd have a negative sum due in your taxes, and thus have a working wage support that is gov't financed. In combination w/ a minimum wage, this ensures each business _and_general_society_ share the cost of restoring economic dignity to the poor.), etc, rather than compromising environmental policy.

The response the the fellow w/ the old, polluting used car is that the rich fellow who bought the new car had to use carbon credits to defray the carbon released in:
* the mining of raw materials (power)
* the manufacture (power, lack of carbon sequestration by wood logged, pastureland for cows for leather, etc)
* the transport of components (land/sea)
etc etc

He will pay for having that new car, just not at the pump. You will benefit in having conserved by having an old car, in selling him those credits.

b) On Access
You all are getting a National ID card; it can swipe for carbon use... (why is it such a big deal over there (or over here)?)

c) On Businesses
They would be required to charge themselves negative carbon credits for all carbon use (including the carbon use that occurs overseas in their name) that have to be "paid" by charging the consumer that carbon cost (the way VAT or sales taxes are collected).

When one car is £10000 + 40 CC and one is £8000 + 120 CC, you'd really begin to see responsible engineering pay off.

d) On Awareness
People often want to do the right thing, but the environment only comes up when they read the newspaper (or hear RH Miliband speak). This system impacts each poor decision to them. The incentive created goes beyond the economic costs of those credits, people will want to use fewer of them to assuage their guilty consciences.

e) On balance of trade
The Indonesian-manufactured good that is build on coal power, transported by an old, dirty truck to the docks where a diesel ship carries it across two oceans would arrive in the UK with such a large CC cost that suddenly UK businesses could compete despite cost of labour.

This provides a morally (and legally) defensible trade barrier. All countries' goods are subject to the same policy but the very advantages low-cost manufacturing has overseas would condemn it when the carbon costs were tallied up. No discrimination and yet local industry is advantaged.


I truly hope this gets implemented, even though it will make me wish even more that I had been born in London rather than Washington DC (or that it was easier to get the UK "Right of Abode").

Ah well,

best of luck, all


# 21 July 2006 01:28 Howard Meadows wrote:
re: Carbon Allowances

How is not being able to get to work fair and equitable?
The supporters of this have an idealised view of the world. An argument about balance of trade assumes that the rest of the world will adopt the same system. This will be stealth tax venerable to abuse and evasion. Energy efficiency measures and new green technologies make economic sense without the need of a separate currency. There's no point in two currencies, normal money incorpotates all sorts of values systems through standard tax and pricing.

For it to work internationally and without abuse then the value of a carbon credit will be determined primarily by market forces which would mean no one can guarantee the real value of their carbon credits. You can't fix prices in a free market. The rich along with the not so ethical countries will no doubt invent dubious trading practices and drive up inequity and inflation.

For it to work in the UK only what you are really talking about is something like a ration book, or the modern equivalent, where people swap their coupons or credits. You would then need to markup the carbon cost of every imported good to the UK to not make it meaningless. Making it an administrative hell, an unnecessary limitation of freedom and a waste of taxpayers money, (sounds like the ID card), that could be going on low carbon emission public transport and commercial grants for research on green technologies.


# 21 July 2006 07:57 Harry Manuel wrote:
re: Carbon Allowances

Having read all 21 comments so far posted, there are clearly two strong opposing camps here.
My concerns are for the practical side of things - how on earth will it be controlled.
People already have a huge array of electrical equipment etc in their homes already, so without snooping inside everyone's home, how do you control this usage? Who will set the level of personal allowances, what will be taken into account when doing so? Will everyone get the same fixed amount, if so this is unfair on those with disability etc, who have a greater reliance on mechanical/electrical aids. Those, like myself, at the lower income scales will sell their quota to the highest bidder then continue, as they've always do, to purchase large items such as cooker, washers, motot vehicles etc, second hand from friends neighbours where proof of carbon allowance will be completely ignored. So the concept of carbon trading will go right out of the window.
In short this is a wonderful idea which is totally impractical in terms of administration.


# 21 July 2006 11:09 Paul Joseph wrote:
re: Carbon Allowances

Given the time lag in posting comments, this may be out of sequence by the time it goes up but I wanted to respond to some of the arguments against the scheme.

The first is that it is exactly the same as a tax, and has the disadvantage of being more complex. This is wrong. With a tax, you have to be confident that you can set it at the level that will affect people's behaviour. But it's actually quite difficult to work out what that level is. Tobacco taxes and fuel taxes are examples which have arguably been pitched too low to affect behaviour, and so have just raised revenue. A cap and trade scheme like this starts from the other way round: where are you trying to get to (a certain level of emissions) and then gives people much more freedom to decide for themselves how we're going to get there.

The second is its administrative complexity. Maybe it couldn't cover the carbon content of everything people consume. But if you just had to produce it when paying for petrol, boarding an aeroplane and paying your electricity and gas bill, that would cover most of the big ticket items. Administratively that seems perfectly straightforward to me.


# 21 July 2006 14:20 James Cartledge wrote:
re: Carbon Allowances

A carbon-trading scheme would probably be impractical or at the very least unpopular at an individual level.

But it could work well at a community or local level.

In transport, for example, you could reward local communities that use public transport more often by giving them carbon credits. Ultimately, if more people used public transport in a local area, the more they would be rewarded through lower ticket prices or investment in a more comfortable ride.

Of course, public transport would have to keep up with demand, and that is another thing entirely.

In terms of locally-produced foods, those communities that consume fewer "food miles" could be rewarded with carbon credits that could ultimately reduce the prices of locally-produced foods - and increase local demand.

The difficulty is always how you deal with those that don't change their behaviour in a trading scheme - they won't want to pay more. The only way to deal with them is to make it easier for them to improve their green credentials.


# 21 July 2006 14:53 Christine Moss wrote:
re: Low Carbon Technolgy

The Governement talk of the need to implement low-carbon technologies, yet have failed to acknowledge the GasSaver - a ~British invention that does exactly as its name suggests - halves Gas consumption and dramatically reduces emissions a major cause of climate change. A technology that costs a fraction of solar and delivers tangible energy and environmental savings. The GasSaver could in effect, eradicate the very real problems of fuel poverty and help the Governemnt reduce the ever increasing burden of Winter fuel payments, and stop the number of deaths caused as a direct result of cold, according to industry experts 2005 saw some 21,000 old and vulnerable people die - how on earth can we fail so many.
This groundbreaking technology is manufactured in the UK and could easily ensure ensure that we as a nation take the lead in the race to reduce the worlds greenhouse gas (GHG) emissions - for if we fail to act now, we will in effect fail our children.


# 21 July 2006 17:26 James wrote:
re: Carbon Allowances

Have you been overdosing on carbon emissions?!!

How much will this scheme cost to implement and administer? What impact will it have on the environment (energy necessary for the offices necessary to house the workforce required to administer it, energy for that workforce to get to work)?

Why not just raise road tax for gas guzzling vehicles to £2000 per anum? Why not subsidise schemes that encourage the public to insulate their homes to reduce central heating wastage? Why not subsidise schemes to allow individuals to install their own alternative energy supplies, i.e. solar panels. Why not reduce fuel duty on bio fuels for cars?

Your proposal makes ID Cards appear almost sane in comparison. More NuLabour lunacy!


# 21 July 2006 17:35 James wrote:
re: Carbon Allowances

"it's fair because the better off tend to use more carbon - they own cars (the less well off do not), and the cars they own tend to use more petrol; their houses are bigger and require more energy to heat; and they travel more, especially by plane."

Cannot agree with that. I can cite an example of a person who commits benefit fraud who runs three cars (a colleague has reported him, but social services are not attempting to investigate). My landlady is not well off and she runs a car. She also owns a badly-maintained 4 bedroom house that she cannot sell due to it being in an undesirable location. I have two brothers One earns £15K per anum and he runs a car. The other earns £13K per anum and he runs a car. Are only rich people flying on Easyjet, Ryanair or Zoom airlines?

Beware of stating absolutes and making generalisations. There will always be someone who can demonstrate exceptions; many of them in this case!

Also, how can it be fair, as the better off will be able to purchase a larger carbon allowance. The worse off will not, and will have their lives made even harder by NuLabour.


# 21 July 2006 18:30 Jonathan Bishop wrote:
re: Carbon Allowances

I think David Miliband’s suggestion of allocating each person a carbon allowance is a really good idea. It will not disadvantage the poor, as they are more likely to use less carbon. However, I think it needs to be worked so that those in shared houses share the amount of carbon produced by their place of residence rather than it just being deducted from the bill payer’s allowance.

My only concern with recording people's carbon usage is that the government may misuse the data collected. For example, people who visit a fuelling station where there is subsequently a crime committed may become suspects as the police gain access to the records of them using the fuelling station. This is my only major concern about any government record keeping scheme on its citizens, that the data it uses to track them will be used in fishing expeditions, something that could also happen with identity cards.

Full post:


# 21 July 2006 22:05 Howard Meadows wrote:
re: Carbon Allowances

There's no point incentivising people to use public transport if there isn't any where you live. The government needs to build the real thing.

Christine hits the nail on the head, why don't the government acknowledge, legislate for or give commercial grants to innovative green technology?
Its real and will help save the planet now, it has nothing to do with limiting public freedom and carries limited administrative overhead.

I suspect its not right-on enough for their loan-guzzling spin machine, too much like common sense. Otherwise we wouldn't be on the brink of WW3. Tony says to David, "I hope you're calculating the carbon credit cost per missile, otherwise it just wouldn't be right.", David replies "Don't worry PM, remember we got an overdraft on the carbon account approved seeing we had no oil to spare"...


# 21 July 2006 22:18 Sam wrote:
re: Carbon Allowances

<i>Why not just raise road tax for gas guzzling vehicles to £2000 per anum?</i>

Because that's taxing the wrong thing. It's not the existance of the gas guzzler which is bad for the environment - Ming Cambell's much loved Jag caused a grand total of no emissions whilst it was sitting in the garage. The thing that causes emissions is burning petrol, so the thing that you need to tax to provide an extra incentive to reduce emissions is petrol.


# 22 July 2006 03:46 Sam wrote:
re: Carbon Allowances

"Also, how can it be fair, as the better off will be able to purchase a larger carbon allowance. The worse off will not, and will have their lives made even harder by NuLabour."

Whether you introduce David's personal carbon credits, carbon credits for oil companies or just increase the tax on petrol, the effect is the same. The marginal cost of consuming a gallon of fuel goes up. Poorer people are in general more sensitive to changes in the marginal costs, so the effect will be to preferentially disincentivise poorer people from travelling. It doesn't matter what you do - this will always be the case. Even if you give your poor man a large number of carbon credits that he can sell for a net increase in his income, the marginal cost to him of a gallon of petrol is exactly the same as that to a rich Jag-owner like Mr. Prescott, but that amount of money has more value to him than it does to Prescott. The consequence of this scheme is that our poor man faces a strong incentive not to drive, whereas Mr. Prescott is gently penalised for keeping Mrs. Prescott's hairdo out of the wind.


# 22 July 2006 09:49 Andrew McLeod wrote:
re: Carbon Allowances

Fantastic! At last the govt are starting to take a seroius look at this excellent idea which has been around for a long time.

It isn't taxation, it's rationing. It isn't inequitable provided the number of carbon credits allocated is sufficient for a reasonable lifestyle. It will only hurt those who use more than their fair share of energy. People who heat their poorly-insulated houses above 20C, use their tumble drier on sunny days and leave the TV on 24/7 need a powerful incentive to behave more responsibly, and carbon rationing would be a fair way to provide that incentive. Simply increasing fuel taxes disproportionately hurts the poor and those who try to minimise fuel use.

However in order to work properly the system must ration embedded energy as well as direct energy usage. If you buy something that has travelled halfway round the world having been produced in an energy-inefficient sweatshop, its cost in carbon credits must be much higher than the equivalent item produced locally, albeit at greater cost in pounds.

Carbon allowances should also be used to encourage the purchase of energy efficient items - SUVs and incandescent bulbs should carry a very high CC price tag, fuel-efficient cars and low-energy bulbs should cost relatively little in carbon credits.

Go for it David, the sooner the better.


# 22 July 2006 15:15 Steve Marriott wrote:
re: Carbon Allowances

This is one of the many intellectual mind games bandied around the “green” networks for years. It is complex and so will penalise those in poverty and who are disengaged. They will fail to work out how they can maximise their benefits within the parameters of the scheme and will suffer accordingly. I thought Labour had a social justice agenda and this is one many policy initiatives and ideas of late that cannot be deemed to contribute to “social justice”.

What the Government can do now is force public agencies to stop prevaricating and take on carbon management policies. Why not:
 Make it a condition of every Local Area Agreement that carbon reducing indicator/targets are built in.
 Ensure every strategy has a carbon-reducing target built in. So, Local Transport Plans, Local Development Frameworks, etc. Ensure the process is done properly by insisting on the assessment to be done by an independent agency.
 Lets set statutory reduction targets for car travel in core cities, provide the resources so it can achieved. Include a penalty system for failure to deliver.
 Make conditions on capital and PFI projects, for example Schools for the Future programme (currently environmental technologies are the first design features to be dropped when budgets are over-run).
 Make sure all Government policies work in harmony. For example, do not go for the Barker recommendations of encouraging more large retail warehousing (which of necessity would be mainly on out of town sites and certainly would go against public transport policies) but continue your policies to support city, town and neighbourhood centres.

Adopting these measures would send out a clear message to the public sector, deliver or suffer the consequences and bring about a sea change in peoples day to day lives.

You have already done this in one area. Waste Authorities have had to rapidly change practice (within 4 years) with the mandatory recovery targets and the introduction of Landfill Allowance Trading Scheme. Use this knowledge and experience to bring carbon management to the fore throughout the public sector.


# 22 July 2006 19:43 Captain Bryn Wayt wrote:
re: Carbon Allowances

The proposed scheme is PATHETIC.

Why not TAX the air we breathe, and the colour of our clothes, then the number of teeth we have?

Some more idiot ideas from the asylum!
Environment Secretary David Miliband this evening will signal that the Government will look more radically at the option of tradeable personal carbon allowances in a bid to combat rising emissions from the domestic sector. Mr Miliband said he believed there was merit in providing people with a capped number of carbon allowances, which if they chose to reduce their emissions, could then make them money by selling surplus allowances.[carbon prostitutes]
Carbon allowances would cover people's direct use of energy through their electricity, gas, petrol and air travel – which makes up 44 per cent of the economy's total emissions. He said such a scheme would be more fair than tax increases because personal carbon allowances provide free entitlements and only offered financial penalties for those who go above their entitlement. [ jail next!]

Hypocrites abound in politics.

I wonder if Colin Challen has thought of a sequel to his books, The Price of Power: Secret Funding of the Tory Party (VISION Investigations) by Colin Challen, 1998, Vision Paperbacks / Satin Publications, with one about Peerages, loans/gifts by New Labour.
Perhaps he will wait till he is no longer a Labour MP getting a nice fat salary and £121,186 in allowances?

Maybe a second edition twist to, "In Defence of the Party: The Secret State, the Conservative Party and Dirty Tricks" by Colin Challen, Mike Hughes 1996.

Mr Challen will have more experience on which to draw upon for that sort of cheap dabble at earning a few bob from writing.
Tyndall's 10 Minute Rule Bill
A Ten Minute Parliamentary Rule Bill based upon Tyndall research was presented to the House of Commons calling for the establishment of Domestic Tradable Quotas, a novel scheme for reducing emissions from energy use.
The Bill was presented to the House of Commons in July by Colin Challen, MP for Morley and Rothwell. Domestic Tradable Quotas are a system to combat greenhouse gas emissions by giving each and every adult in the country an equal greenhouse gas allowance. Each adult is given a smart card that only allows them to use a certain amount of carbon units, buying additional units if they exceed their allowance or selling their excess units if unused.
See DTQ's project page.

Richard Starkey, Tyndall Centre, Manchester University


Norman Baker (Lewes, Liberal Democrat) Link to this | Hansard source
Undoubtedly, and I shall devote part of my speech to what we should do in that eventuality. The United States is the world's major polluter. It has 4 per cent. of the world's population, but produces 25 per cent. of its carbon emissions. However, President Bush still denies the basic science that everyone else in the world accepts. His spokesman, Harlan Watson, said a couple of months ago: "We are still not convinced of the need to move forward quite so quickly . . . There is general agreement that there is a lot known, but there is also a lot to be known."

I wonder how the USA views the carbon smart card for its voters?

Do another U-turn David - it is a really silly idea riding on the back of another TAX grab and another little empire of pen-pushers.


# 23 July 2006 12:07 Zbigniew Mazurak wrote:
No to carbon allowances

Honestly, I think this is a bad idea. Although it restricts CO2 emissions, it allows some people to emit carbon dioxide. Now other people will ask: "why are they allowed whilst we aren't?" I honestly think that no one should be allowed to contribute to global warming. Besides, why set a limit of _results_ when it is possible to actually counteract the _causes_ of the emissions? By "causes" I mean unelectrified railways and thermal electric plants. While private railways remain out of state control, there could be a donation from the state budget to the railways to fund electrification. Thermal electric plants could be replaced by power stations using alternative energy.

An additional solution could be re-forestation. In Poland, very many forests (which account for 28% of the country's territory) are under state protection, and they limit the results of CO2 emissions.


# 24 July 2006 00:20 rossi gazzaladra wrote:
re: Carbon Allowances

Using a mechanism of carbon allowances and trading would definitely be a step in the right direction, and would aid a move towards the aims of Contraction and Convergence. It could really drive carbon reduction, as consumers will become more aware of their emissions, and try to minimise them. Manufacturers and suppliers will change to meet those aspirations.

The concerns over complexity are overblown. Banks already run funds movement mechanisms so it wouldn't be too much of a leap in technological terms to manage the flow of carbon credits. The only real complexities depend on managing the cash price of the credits (which would follow market demand) and allocating the carbon emission costs of different energy sources.

As for the cost of the scheme, it could pay for itself if the companies running the scheme were paid a nominal commission on each carbon credit purchase transaction, much like in a credit card transaction.

To encourage the growth of domestic energy efficiency, a carbon credit purchase transaction tax could help fund grant schemes for those who want to install energy saving devices and home micro generation equipment.


# 24 July 2006 12:44 Brian Paget wrote:
re: Carbon Allowances

This idea and others like it will get nowhere unless there is a firm policy mechanism to support it.

This carbon allowance initiative would easily fit within the context of the Climate Change Bill, currently sitting under Early Day Motion 178. There is considerable demand for the Bill across the House as 380 MPs have signed up to the EDM. This cross party support and the recent emergence of carbon allowance and other new ideas (many considered here on your blog) make this the perfect opportunity to have the Bill added to the Queen's Speech, and help drive these aspirations into policy.


# 24 July 2006 13:45 John Ackers wrote:
re: Carbon Allowances

Howard Meadows says "I simply don't understand how this scheme would be remotely fair or equitable. If you're rich you just buy as many carbon credits as you want and if you're poor its just tough." While that's true, the difference is that there is only a limited supply of carbon credits. If someone buys more credits from someone else that's fine, the important point is that the someone else started with credits and chose to sell them. (I have just noticed that Colin Challen and others have said similar things.) This is more equitable than the way money is currently 'distributed'.

It is really important that individuals budget their carbon use the same way that they budget their money. At the moment, we have a society that thinks in terms of money but we need to be thinking primarily in terms of carbon. When you see a cheap return flight to New York for only 1.5 tonnes of carbon credits and £50 cash and you know that your total quota for the year is say 2 tonnes, it brings home the message and hopefully a sense of personal responsibility.

Howard Meadows says "The government should be doing things such as building up a viable public transport infrastructure outside of London. " True. But we have to take all these measures in parallel. We don't have the time to implement them serially. Howard does not seem to appreciate just how difficult it will be for us to achieve even the weak 60% target that the government has set. I went to a Royal Society two day lecture series earlier in the year about meeting our future energy needs and it struck home to me just how hard it was going to be to meet carbon targets and energy needs in the next 50 years with or without nuclear.

Robert Mecalfe argues 'rather than make firms internalise their external costs, they will force consumers to try to incorporate this into their decision making'. That's exactly what we want consumers to do.

Chris Wilde says 'How is your proposal any different than adding a tax to high carbon emitters - the outcome is exactly the same - I end up paying more money in order to 'do things' that burn more carbon'. The crucial difference is that the government sets the carbon emissions for say the following year and the market ensures that those emissions are not exceeded. As Andrew McLeod points out 'It isn't taxation, it's rationing'.

Fleur Corfield says "I have no choice but use the carbon emissions I use". So presumably you have already fitted a condensing boiler, brought your house insulation up at least to the current standards and fitted a wind turbine, P.V. panels and solar water heating. I envy people living in the country because options like wind are so much more practical.

Kirsty Sparkes says 'Well there's a surprise - the ID card scheme raising its head again'. This is not the closest analogy. If you receive a tax code notice from the Inland Revenue and you have a credit card you are already known to the government authorities and credit agencies who will be managing carbon credits.

Clare Hazelgrove says "And what about those who commute and/or have to travel long distances, would individual situations such as these be taken into consideration all would we all be measured by the same ''joe bloggs'' standard? Would this scheme not discourage the ordinary citizen from travelling to other countries and possibly inhibit cultural knowledge etc?" The answer is hopefully and regretfully yes. People that want to travel a lot can choose not to drive during the rest of the year or move into a smaller energy efficient home. She goes on to say "Surely finding ways of improving machinery/vehicles/housing resulting in heightened carbon efficiency would be both more practical and desirable in that some people's lifestyles would not be so strongly affected." People's lifestyles are going to be strongly influenced that's the key objective and it is the only way of hitting the emission targets already set by the UK government.

Sam wrote "How does your personal carbon quota scheme improve on a scheme where those same fixed tradeable carbon permits are instead sold to the producers of petrol, heating fuel and electricity?" It may well be that petrol is or could be sold with the cost of the carbon credits combined. However in monetary terms, the bulk of the cost will be the carbon credits not the petrol itself. It would make more sense to pay for petrol entirely in carbon credits as you would be less exposed to the volatility of price of carbon credits that day.

Devil's Kitchen says 'Have you lost your mind?'. And your solution to climate change is?

Howard Meadows says 'You would then need to markup the carbon cost of every imported good to the UK to not make it meaningless.' Even if carbon credits were used to cover just air travel, petrol, heating and electricity, this would be an enormous and worthwhile step forward and it could potentially transform our understanding and use of carbon based fuels.

Harry Manuel asks questions after 'Having read all 21 comments so far posted' but the answers are in the Tyndall report (link in Milliband's blog entry).

Howard Meadows wrote "why don't the government acknowledge, legislate for or give commercial grants to innovative green technology?" Investors are pouring money into any UK technology e.g. fuel cells that might be part of the solution. But you are running away from the basic problem: we all have use less energy.

Steven Marriott suggests many government policies such as "Ensure every strategy has a carbon-reducing target built in. So, Local Transport Plans, Local Development Frameworks, etc. Ensure the process is done properly by insisting on the assessment to be done by an independent agency. " The problem with all these suggestions is that they are very prescriptive and have an indirect and slow impact on emissions.

Parking, for example, is one of the best tools councils have for controlling commuter traffic but residents vote out councillors that introduce anything that is inconvenient for them. The public sector cannot alone deliver the necessary cuts, residents have to be directly involved, they need to demand radical changes from their local authorities not to just have mild changes imposed upon them which is what is happening at the moment.


# 24 July 2006 16:51 Jon Cape wrote:
re: Carbon Allowances

I believe that the scale of the challenge facing us is so large and urgent that big shifts in personal and business behaviours are needed. This proposal is worth taking seriously as one means of turning talk into real action. There is a case for pilots to iron out some of the teething troubles. I am not convinced that an island (Isle of Man and Ilse of Wight have been quoted by others) provides the solution for a pilot - it only helps (a bit) with petrol purchase which is only one part of et equation. In short, whilst the full scheme must be compulsory, I don't beleive that a pilot can easily be compulsory. I am deleloping proposals for a voluntary pilot, based on trust rather than enforcement, and built on existing trust, and environmental commitment within our faith communities. Others interested in pursuing this are welcome to contact me at


# 24 July 2006 17:53 Captain Bryn Wayt wrote:
re: Carbon Allowances

I have tried to get some heavy points across but the PC sensor will not allow it!

I will just say this: Why not TAX the air we breathe, and the colour of our clothes, then the number of teeth we have?
Having "Carbon Allowances is just another idiot idea from the asylum!


# 24 July 2006 22:26 Sam wrote:
re: Carbon Allowances

"Carbon allowances should also be used to encourage the purchase of energy efficient items - SUVs and incandescent bulbs should carry a very high CC price tag, fuel-efficient cars and low-energy bulbs should cost relatively little in carbon credits. "

No, you're wrong. SUVs and fuel-efficient cars should carry precisely the CC price tag of the CO2 that is produced in their production. Assuming the thing that you want to deter is CO2 production rather than SUV ownership, of course. The purchase of energy-efficient items is encouraged by the fact that energy costs money (and as you charge for carbon and so on, that energy costs more money, so there's more incentive to conserve it).

Rossi Gazzaladra then comes out with the stunningly stupid contention:

"The concerns over complexity are overblown. Banks already run funds movement mechanisms so it wouldn't be too much of a leap in technological terms to manage the flow of carbon credits."
"As for the cost of the scheme, it could pay for itself if the companies running the scheme were paid a nominal commission on each carbon credit purchase transaction, much like in a credit card transaction."

Time for a small economics lessons. The scheme doesn't "pay for itself". The Visa credit/debit card network is paid for by the fees that Visa charges merchants to process payments. That is real money, and is a cost to the businesses that take credit cards. Most businesses chose to accept credit cards even with those costs, as they make extra sales that way.

It wouldn't be technologically difficult to produce carbon-Visa - it would be a direct copy of the existing system. It would, however, cost enormous amounts of money for no actual gain, The effects of this scheme are identical to the effects of the far simpler and cheaper scheme where you sell the carbon credits to the electricity generators and fuel refiners.

If, given two equivalent solutions, you chose the more expensive one, you must be a consultant.


# 25 July 2006 07:44 Captain Bryn Wayt wrote:
re: Carbon Allowances

At the risk of the big filter being in operation, can I add this as another reason why this dumb idea of everybody having a Carbon Allowance?

Read this:

Ministers like you David, Gold Plate every thing Brussels asks us to do.


# 25 July 2006 12:05 Sheryll Bonilla wrote:
re: Carbon Allowances

Dear Mr Miliband,

My American friends and I were amused that this one topic got so many responses. We like the concept, but have concerns about implementation. "Never in America" they said. David, we really like you, and as Mr Blair knows and enjoys personally on his visits here, Americans adore him. We'd be overjoyed to have him for our president. If only he could get around the natural born citizenship requirement...(is that why you adopted from America?)

President Carter, a little less than 30 years ago, gave the speech "The Moral Equivalent of War." He said Americans had a responsibility to preserve and care for the environment -- pollution, resources, energy, waste -- and that this change in behavior would require the same courage and sacrifice as going to war would.

When President Carter rationed petrol in the 1970s -- a similar concept to your personal carbon allotment --Americans who were not disciplined enough to even follow the odd-even day purchase scheme and cut their petrol use, booted him out of office. We want you to stay in office as long as possible, so I'm reminding you of that tidbit of history on this side of the Atlantic.

Carter was the president (a Democrat, the American equivalent of Labour) who used diplomacy in the Middle East to preserve peace, rather than military force. It took longer, but no lives were lost and no billions were spent. He started Habitat for Humanity and personally hammer-and-nailed homes with others to house the homeless. He finally won the Nobel Peace Prize in 2002. He was a very good man, like Mr Blair, and you, too. But Americans voted him out of office and put Reagan in his place (around the time Thatcher came in office). So, in your efforts, you join President Carter in trying to save the environment. Let's hope the British are infinitely wiser than the Americans and keep Mr Blair and you in office.

I know when I lived in London that I got around fine by foot, bus, underground and bicycle. I could get around to most places when I lived in Glasgow, but had to catch a ride to get to church in Greenock. Edinburgh was convenient transportation-wise. But I'm not sure everywhere in Britain has the public transportation needed to carry this out equitably.

For example, we said "Never in America" because farmers like my friends Ronetta and Chris in Montana supplement their farm income with jobs in the city, 60 miles away one-way with no public transportation to get there. Being farmers, they drive a truck. If they had children, would their children's school bus rides be taken into the allotment? My job as a hospital worker is 33 miles away one-way without adequate public transportation, and I'm only a 16,000 pound (equivalent) worker. Another farmer I know in Findlay, Ohio, supplements his farm income by a job in Columbus, which is a two hour drive one-way. So we are not in the upper echelons of pay, but we would all be penalized for not living close enough to our jobs and for lack of adequate public transportation, factors outside of our control. If this allotment were in America, that is.

Isobel still lives in Glasgow, and as an NHS nurse, she has to drive very far to get to her hospital in a neighboring village. I would think not all of Britain is as well developed transportation wise as London is, so my guess is that people without higher paying jobs have to rely on their cars to get to work,.and would be penalized.

Would it be feasible to phase in a hybrid car conversion deadline with tax credits so that as many as possible can buy a hybrid car within a couple of years before a stiff petrol tax is imposed, or until public transportation is better developed? Or phase out wasteful lighting and inefficient insulation, and install solar and wind turbines by deadline before the allotment is imposed?

Given how small our council house was in Glasgow, I don't know how much power solar panels on our roof or a wind turbine in our small garden could generate. We used the radiators to heat our home. But we'd try, sure, if we could get some financial help to do so. Unfunded mandates in the US make people unhappy -- maybe in the UK, too.

And please remember to investigate and include in your plans clean, renewable alternative energy sources: ocean current, geothermal, natural and reclaimed hydroelectric power, fuel cells, in addition to your wind turbines and solar.

It's great that you're so open-minded and cerebral, and are up to the task before you. We know you'll be fair and come up with very well thought out plans.


# 25 July 2006 22:13 James Miller wrote:
re: Carbon Allowances

Carbon allowances are a charter for cheats, bureaucrat job creation etc. What we need is very much higher taxes on energy, with corresponding reductions in income tax, so that the average man would actually pay less, but the man with a large BMW 4x4, a seven bedroom house and a swimming pool would pay much more. Unless of course, he used his nous and got the house properly insulated, heated by a CHP and the pool heated by say wind-power.


# 26 July 2006 10:48 James Miller wrote:
re: Carbon Allowances

As a computer programmer who has created several very complex systems on his own, I would agree that it is possible as the supermarkets have shown.

But government seems incapable of getting a complex system to work. Hence my view that taxation is a better route.

What would happen if say a Motorists Party got elected and scrapped it all? At least with taxation, there would not be the creation and dismantling of a complex system.


# 26 July 2006 14:05 Simon West wrote:
re: Carbon Allowances

I can't say whether I agree or disagree with the introduction of a personal carbon allowance scheme without seeing details but the principles are sound if they part of a wider programme. The comments posted in response to David's blog demonstrate diversity of opinion within the most environment orientated central department.

This, in conjuction with the one living planet 'mission' and David's initial surprise at the enormous science base in Defra, leads me to believe that Defra needs a much a greater understanding of the values English (British) people have towards water, energy and other ecosystem goods and services (not just consumption). I believe an increased social science evidence base will help Defra direct a 'programme of measures' including the proposed carbon allowances scheme and further efforts to change people's behaviour to consume just the one planet's worth of resource.


# 26 July 2006 17:03 Sam wrote:
re: Carbon Allowances


I'm not sure you've really thought this through. The point (at least my point) is not so much that your personal allowance scheme is complicated per se, but that you can achieve exactly the same outcome with a much simpler scheme where the electricity generators and oil refiners have to buy the carbon credits. Of course it wouldn't be impossible to create a personal allowance scheme - it's perfectly possible, it's just more complicated and more expensive than another way of producing the same outcome. [And we haven't even started to discuss things like fraud. It is, in general, easier to defraud government rationing schemes than it is to commit the equivalent fraud with actual money.]

In my book, that makes it a bad idea.

You then claim that "your hunch" is that the scheme is likely to be progressive rather than regressive if an allowance is handed out for free.

I think this is confused. These carbon credits will have a market value (which will depend on the number that are issued). Giving carbon credits to everybody is equivalent to giving everybody a fixed amount of cash which will come from the general taxation stream. This is indeed strongly progressive (but rather more complicated than just giving out the cash). The effect that has more interest, though, is the increase in the marginal cost of consuming an extra gallon of petrol that this scheme will introduce. Even though our hypothetical poor man will probably be better off having been given a pile of free credits, it is the marginal costs that provide incentives. This scheme will act to greatly disincentivise driving by the poor, and only mildly disincentivise driving by the rich. That's not necessarily a bad thing, given that the aim of the whole shebang is to reduce emissions, but the effects of reducing the mobility of the low-paid end of the labour pool are likely to be difficult to predict.


# 27 July 2006 00:00 James wrote:
re: Carbon Allowances

"Would it be feasible to phase in a hybrid car conversion deadline with tax credits so that as many as possible can buy a hybrid car within a couple of years before a stiff petrol tax is imposed"

You can spot this was written by somebody outside of the UK a mile off, although the tax credits on hybrid cars is not a bad idea. However, if you do your research my American cousin (meant as a figure of speech, obviously not literally), you will find that in the UK we're already taxed at over 70% on fuel. If that is not a stiff petrol tax, then I don't know what is. Do you know something else? It hasn't reduced the traffic on the roads. En contraire, it has increased over the last decade. What does that tell you about taxing essentials such as fuel?

In the UK our public transport is so utterly lousy when it comes to commuting anything more than a few miles, that people very often have no choice but to drive. Our trains are notoriously unreliable and expensive. How about channelling some funding into the railways and letting the people on the ground decide what it's spent on, as opposed to some clueless (in my opinion) cabinet minister?

Also, a quick response to Sam, re. his reponses to me. How can carbon rationing be fair? You said yourself that it's not going to make the lives of Britain's poorer people any easier, especially the working poor as opposed to our benefit cheats. Has carbon sharing worked as a solution to climate change on the World stage? Stop me if I'm wrong, but I was under the impression high carbon producing countries could purchase the allowance of low carbon producing countries. I appreciate this assists meeting carbon quotas on a global scale, but how in the name of all that is intelligent does this reduce the carbon emissions of individual countries? The reality is that rich countries are continuing to pollute, and poor countries are continuing not to pollute. It changes nothing!

So please can you explain to me just how carbon rationing on an individual scale is going to be any different in its outcome?

Personally, I see it as another government scheme to burn our taxed money that most of us have worked hard for on chasing a PR-led solution that will actually accomplish nothing. I do not wish to see my taxes urinated away on such complete and utter tripe. Could we not do something about the apalling state of our rail network with this money instead?

BTW, Mr Miliband, I am a regular reader of the Devil's Kitchen Blog, and whilst I don't agree with quite everything he has to say, I fully support the opinions he's recently stated in relation to yourself.

I am not insane as you've already implied him to be. I am merely a floating voter who once upon a time would have voted for New Labour. You can be assured I will not be voting that way at the next election. You and your totalitarian friends within the cabinet are not only annoying people like me with your hare-brained schemes, but are causing some concern aswell; namely over the future well-being of the liberties that the majority of the populace currently take for granted.

Please can you do us all a favour and just go away?


# 27 July 2006 09:08 Sheryll Bonilla wrote:
re: Carbon Allowances

For all the anxiety being expressed, I am confident, based on his past performance and success in other departments, that Mr Miliband will think his plans through carefully and come up with a fair allotment scheme, and that it will be equitable and progressive, and serve as a successful, replicable model for other governments. And I think that my kin still there in the UK will be able to live with it.

Capt. Bryn Wayt asked how the Americans would feel about the proposal.

I'm in the minority; I have a remarkably low electric bill compared to everyone I know, but that's just Scots nature. I know Britain is wiser than America on this issue, and I hope that Mr Miliband gets the support and cooperation for his energy reduction plans.

I had for some time attributed President Bush and Vice President Cheney's refusal to do anything about carbon emissions to their oil interests. Remember the Bush family fortune is in oil, and however wealthy they are, on this year's tax returns, the newspapers here have reported that the Vice President's oil-related wealth is four times that of President Bush. So, realistically, don't expect anything environmentally concerned to come out of the current presidential administration.

A Texan (both the President & Vice President are Texans) last week, when I asked him about global warming, said, no, remember the Dust Bowl and the Great Drought -- this global warming is all phony, it's a naturally recurring phenomenon and it'll subside. So, that's the Texan explanation.

But there's also this explanation: that the end of the world is near, so why bother, and that has been very much attributed to why President Bush won't do anything about American contribution to the problem: no point in making the effort.

Fourth, the Republicans are for big business, including the automobile industry. And, for some odd reason, they have been cranking out bigger cars / SUVs every year and Americans have been buying them despite the doubling of petrol prices over the last five years. I don't understand it myself, but that's the way it is. And utility companies are big business, too. So the Bush Administration is not going to buck big business by pushing reduction of carbon emissions.

Combine all four, because humans can have multiple reasons for their course of action or inaction, and you see why the U.S. government won't cooperate until the next president is elected -- providing, of course, that it's a Democrat who gets in the White House and on the Democrats retaking control of Congress.

I personally think the idea of carbon allowances will be an effective way to bring about change in behavior since it will force people to think about things they don't normally think about and examine their usage. (Again, the Scots already do this because of natural cost-consciousness, thank you, so you don't need to push there.) But I'm a life-long environmentalist.

I think the high consumption mindset of Americans would make them revolt if it were proposed here. People are simply careless about energy use here -- leaving all their lights and appliances on needlessly -- giving every teenager in the household their own car instead of making them catch the bus or walk or ride a bike -- buying huge petrol guzzling vehicles -- buying massive freezers instead of simply buying food as they need it -- washing clothes at half load -- using dryers instead of line drying -- leaving appliances on standby instead of turning them off -- having a television and/or computer and/or radio/stereo in every room and leaving them on in every room -- getting either centralized air conditioning in huge homes rather than using fans or having an air conditioner in most rooms -- and on and on. Americans are simply beyond belief when it comes to consumption. Americans would never go for the carbon allotment plan.

Does that answer your question, Capt. Wayt?

(Pres. Bush's brother Marvin, who plans to run for president in 2008 -- his two main business interests were the Kuwait-backed investment and providing security for the World Trade Center (which disintegrated on 9/11 -- let's see does that look like Iraq is personal?)


# 27 July 2006 15:28 David Miliband wrote:
re: Carbon Allowances

Thanks to all the contributions about the idea of personal carbon allowances, and thanks to Any Questions on BBC Radio 4 last Friday for giving the issue an airing too. There seem to be two concerns.

The first is equity. We do need to look at the details, but my hunch is that if a set level of allowance is given out free, then a scheme is likely to be progressive not regressive.

The second is administrative complexity. Again a good point. But the supermarkets run loyalty cards that have millions of users and lots of transactions. Any local authority fancy running a pilot?


# 27 July 2006 16:55 Sam wrote:
re: Carbon Allowances

"Stop me if I'm wrong, but I was under the impression high carbon producing countries could purchase the allowance of low carbon producing countries. I appreciate this assists meeting carbon quotas on a global scale, but how in the name of all that is intelligent does this reduce the carbon emissions of individual countries?"

Why do you care about carbon emissions of an individual country? So far as I am aware, there is no difference in environmental outcome whether you emit all your CO2 at one point, or distribute it equally over the Earth's surface. The thing that actually matters is global emissions, so if you decide you want to do something about CO2 emissions, the thing you need to change is global emissions. The most efficient way to reduce global emissions is probably not for each country to reduce his emissions by the same amount. A global carbon trading market is a tool that will find the most efficient way to reduce global emissions for you.


# 27 July 2006 17:06 Sam wrote:
re: Carbon Allowances

Brian Paget writes:

"It may well be that petrol is or could be sold with the cost of the carbon credits combined. However in monetary terms, the bulk of the cost will be the carbon credits not the petrol itself. "

I suspect you vastly overestimate the value of the carbon credits. I strongly suspect that reducing our fuel needs by a moderate amount will turn out to be rather easy, and so carbon credits will have a small value.

"It would make more sense to pay for petrol entirely in carbon credits as you would be less exposed to the volatility of price of carbon credits that day."

1. The price of carbon credits will not be very volatile on a daily basis.

2. You won't be exposed to that volatility anyway - in my scheme, the carbon credits are purchased by the oil refiner. Daily volatility will be smoothed by the stocks of fuel that are held in the supply chain.


# 27 July 2006 20:27 rossi gazzaladra wrote:
re: Carbon Allowances

It's unfortunate that Sam got so upset that he felt like giving a patronising 'economics lesson'. Perhaps I should clarify. A system like VISA doesn't require external public subsidy, a concern of many posters on here. The only people who pay are those who use it. His suggestion that merchants pay the transaction costs naively ignores that most merchants pass the interchange fees onto their customers through higher prices, or in some cases by specific transaction or 'card handling' fees.

However, a credit card type system is just one example of a possible instrument to manage carbon allowances, as David has suggested.

The argument that a carbon allowance scheme would be a 'license for fraud' can similarly be applied to any system - PayPal, phone top-up cards, VISA. Security concerns are not a valid excuse not to adopt carbon allowances, just
reason to exert caution and implement adequate controls.

It seems that many are so obsessed with the minor niggles or the challenges to the holy cows of economics that they feel we shouldn't explore carbon rationing, rather than consider the major benefits of this mechanism - it's currently the most comprehensive and most equitable method on the table to challenge society's approach to carbon emissions.

27 July 2006 17:06 Sam wrote: re: Carbon Allowances Brian Paget writes:

"It may well be that petrol..."

I don't mean to hoist Sam by his/her own obviously high intellectual rigour but wasn't it 'John Ackers' who made that statement?


# 28 July 2006 00:35 ian Duff wrote:
re: Carbon Allowances

Some additional things we should discuss:

This systems provides every adult citizen with an equal right to emit CO2. Equality to emit, or rather equality in accessing resources, sounds great but this won't necessarily result in equality of welfare. Some individuals or groups will have to, out of no fault of their own, emit more. Take for instance Jack and Gill. Jack is disabled and must use a wheel chair, whilst Gill is perfectly fit. Jack must use his carbon credits for the purchase of the wheel chair and has no choice but to use the car/taxi. Jack, because of the cards that nature dealt him and out of no fault of his own, is likely to spend his credits just to get to the position where fit Gill will start. Meanwhile Gill will be able to use her credit to pursue the her life goals to a greater degree than Jack.

The fact is, that some people will require a greater allocation than others simply because they were born into a situation than requires above average carbon consumption.

I am thinking rural folk, people living in colder regions, pregnant women (need to use car), elderly, disabled etc.

So how do we overcome this? Allocating carbon in a specific way, rather than per capita, sounds very difficult. Would we not have to develop a system of subsides/tax breaks/carbon benefits. This is workable but we must recognise that it is necessary.

Any other ideas?????????

I support the DTQ system (tyndale report) where companies would also have to purchase credits from the central market (44% = adult citizens for free and 56% of remaining emission are put on the market for industry)

This way the cost of carbon will now be internalised and reflected in the price of goods and services. This will provide a huge incentive for industry to become energy efficient The question now is what do we do with the money generated from selling the credits?

Redistribute to citizens to help them adjust to the carbon inflation?
Invest in public transport and carbon neutral technology?
Provide subsidies for making energy efficiency changes in the home, hybrid cars etc.

Any other ideas????

Another idea would be to allocate 100% to citizens who could then sell their credits to industry. This would mean that citizens could be directly involved in deciding what is produced in society. I for instance might sell my credits to a broker who has a policy of not supplying them to cluster bomb manufacturers. This would create a consumer democracy and a society where we decide collectively what is produced!

Is that desirable????


# 28 July 2006 16:29 Zbigniew Mazurak wrote:
re: Carbon Allowances

Secretary Miliband wrote:

"But the supermarkets run loyalty cards that have millions of users and lots of transactions. Any local authority fancy running a pilot?"

But anyway, wouldn't it be simpler to legally eliminate the _sources_ of emissions? If PM Blair wants to keep using nuclear power, why not even _broadening_ the use of atomic electric plants? France not only doesn't want to hear about closing its current power stations, but it's also going to be the country where the ITER is going to be located. Then there is tidal power and solar energy.

Diesel locomotives also emit CO2, yet electrification is a simple way to stop these carbon dioxide emissions.


# 29 July 2006 09:07 Andrew McLeod wrote:
re: Carbon Allowances

Zbigniew Mazurak wrote:
"Diesel locomotives also emit CO2, yet electrification is a simple way to stop these carbon dioxide emissions."

Where do you think the electricity comes from? Fossil fuelled power stations of course! Electrifying the railways doesn't stop CO2 emissions, it just displaces them to another source. Replacing coal with biomass and diesel and petrol with biofuels will help, as will all the other renewable energy and energy efficiency technologies which we have available right here right now. Add to the mix strong incentives such as personal carbon credits to reduce wasteful energy use and we might actually make a significant impact on the problem, but we seem to lack the collective will and/or vision to implement any of this on anywhere near a large enough scale.

BTW can someone please explain how allocating the carbon credits to the electricity generators and refineries instead of to individuals would encourage people to take more personal responsiblity for their energy consumption? This has been suggested here as a simpler alternative to personal carbon credits, but it seems to me that it completely misses the point.


# 30 July 2006 00:47 Sheryll Bonilla wrote:
re: Carbon Allowances

Dear Mr Miliband,

You once responded to a reporter's criticism, when you were School Standards Minister, that ideas seem controversial at the time they are proposed, but once they're put into place, people realize it was the right thing to do. You spoke about how responsibility needed to be shared by those who benefitted from a system. You said the way to earn trust was not to back down off of what should be done just because the opinion polls were dictating so, but to take the flak and proceed with what needed to be done to improve the condition of people.

Here you are again, faced with another one of these situations.

People think it will be complicated, but really, we don't think about the math that went into the schedule of fares we pay for buses and trains based on the distance between starting and ending points. These are complex and on a massive scale, yet done for personal sized trips. Surely the kind of calculating that went into those fare schedules can also be performed on carbon allotments. So, the scheme can be done.

Years ago, when debit cards and point of service transactions were proposed by banks, there was a great deal of anxiety about it, with a whole range of reasons for not wanting to put it into place. Yet now that we use it, we enjoy the convenience of it. And, as you pointed out, we use loyalty cards and credit cards and bank cards without even thinking about how complex the invisible system is that allows it to occur. So the scheme can be done.

Recycling in America took three forms -- the voluntary where recycling bins and refund centers are out, and people who make the effort for altruistic or monetary reasons use it. The third is most effective, where the entire city or county, by government action, has those red recycle bins in each home where they deposit glass, plastic and newspaper, and these are taken away each week. When each home is doing it, the aggregate benefit is tremendous, and since all the neighbors are involved, people simply do it as a matter of lifestyle.

Some local governments even provide incentives by taking away recyclables for free, while the garbage pickup is a paid service, or limiting free garbage pickup to one or two of those big wheeled bins per week, so you have to use recycle bins to meet that limit. So again, behavior can change, and the biggest benefit is when all the community participates. And here's where the carbon allotment plan holds the biggest potential for beneficial change.

You've had your grassroots experience as Minister for Communities and Local Governments, and with reforms as School Standards Minister. I'm very confident that you'll handle these DEFRA issues and plans with the same thoughtfulness, big picture comprehension, and carefulness that you did in other posts. You will do it well, and it is good that these are in your hands.


# 30 July 2006 14:17 Ian Duff wrote:
re: Carbon Allowances

"BTW can someone please explain how allocating the carbon credits to the electricity generators and refineries instead of to individuals would encourage people to take more personal responsibility for their energy consumption?"

The way I see it credit trading at the industry level is the same as a tax. It internalises the cost of carbon, which is then reflected in the price. Consumers behaviour responds to price changes. However unlike a tax, with credit trading the government can set a cap on emissions (credits) so it can be certain of its annual emissions.

So just like a tax, trading at the industry level, and not at the individual level, will be regressive and the poor will become more vulnerable. With individuals carbon allocation we can be sure that every adult citizen will have at least a minimum right to emit regardless of their ability to pay. Its a bit like a minimum wage, or state benefits.

How then can we justify this 'minimum right' to emit? Because a minimum level of emissions are essential for the realisation of our most fundamental human rights (e.g right to an adequate standard of living (heating, hot water and refrigeration), right to (travel to) education. Without the minimum right, the realisation of these human rights will be based on ones ability to pay, which is completely at odds with the philosophical and legal basis of human rights. A minimum right reconciles the conflict between restricting consumption and maintaining human welfare.

Tax and industry credit schemes do not have these qualities.

respond to...


# 31 July 2006 18:40 James Bruges wrote:
re: Carbon Allowances

I have long been a supporter of DTQs and I am delighted that David Miliband is taking the scheme seriously. My concern is with its complexity and therefore the cost of introducing it – if it failed on these grounds it would take a long time for the principles to be revisited.

The DTQ has two aspects of primary importance. The first concerns CARBON ENTERING THE ECONOMY. This is of extreme importance for the survival of our species but, unfortunately, is not ranked sufficiently high by voters.

The second, FUEL POVERTY, is likely to become the most significant political issue as oil depletes and the price of carbon fuel escalates. Industrial farming is totally dependent on oil products for fertiliser, farm machinery and transport (not only air freight, 40% of lorries on our roads are transporting food). The rising price of fuel will therefore translate into a rising price for food. Rising fuel prices in the past have led to recession so the government will be less able to relieve those that are unable to heat their homes or buy adequate food.

The think tank Feasta suggests that the two key objectives, control of emissions and prevention of fuel poverty, can be achieved by simplifying the process, with the government being involved in only two procedures:

1. Distribute monthly or annual fossil-fuel-emissions permits to everyone equally (as with DTQs). The number distributed would decrease each year (as with DTQs). The permits could be distributed by simple electronic means or even with low-tech tear-off booklets as with WW2 rationing.

2. Require those companies responsible for bringing fossil fuels into the economy (oil importers, natural gas producers, coal mines etc. – there are only about 200 of them) to acquire these permits through banks post offices or other brokers and surrender them to the authority in proportion to the emission-causing fuel they sell. The authority would then destroy them.

With this approach TOTAL (not 45%) emissions-causing carbon entering the economy could be controlled to scientifically acceptably levels. The permits would provide a basic income that would rise as fossil fuels became scarcer, thus introducing an economic mechanism to counter fuel/food poverty (as with DTQs). Existing trading arrangements of companies would not be affected. The scheme could therefore be introduced with minimum disruption to existing financial and tax arrangements.


# 31 July 2006 22:16 James Levy wrote:
Redeemable home heating tax-free allowances

Dear David Miliband,

As others have stated, DTQs are potentially unwieldy and an extra layer of the state, compared with a Carbon Tax. However, a rising Carbon Tax applied to home energy will cause difficulties for some people even if there are compensations elsewhere in taxes/benefits.

One 'hybrid' solution is redeemable home heating tax-free allowances, within a Carbon Tax. That is, every individual has a home heating tax-free allowance which by default is applied monthly to their household heating utility bill BY THE UTILITY (parent or guardian's bill for children). Any unused allowance could be redeemed for a tax refund/credit. In this way, poor families are much less affected by higher home energy bills, but the incentive is preserved for everyone to minimise their home energy CO2 emissions.


# 01 August 2006 10:13 John Ackers wrote:
re: Carbon Allowances

Ian Duff says "Some individuals or groups will have to, out of no fault of their own, emit more." What does no fault of their own mean?

I think the biggest inequality is going to be the different number of carbon credits required to heat our homes. D Milliband points out that 27% of emissions comes from use of energy in the home. But some people living in large poorly insulated houses might have to use most of their annual allowance of carbon credits to keep the place warm, while others might live in a well designed, well constructed home and have enough spare credits for a flight to Florida once a year.

Is that fair? It might be if we could all choose to move into better housing. But most of Britain's housing is sub standard compared to houses in other Northern European countries. We built our houses over the last 100 years on the basis that energy is cheap and that the Gulf Stream will continue to provide the UK with an 8 degrees Centigrade lift in the winter. Neither are expected to continue!

Even our new build is inadequate. Last week, Liz Reason of the AECB asked an audience of planning officers and developers in London why they were bothering with microgeneration when the energy performance of most new homes is rarely tested and never meets the performance it says on the tin. Monbiot points out that building inspectors do not concern themselves with energy efficiency. And why should they? Most new home buyers don't give it a second thought. But they might if they know that they are going to use 50% of their annual carbon credits to heat it.


# 01 August 2006 16:34 ian duff wrote:
not fault of their own

'no fault of their own' refers to those people who because of a specific situation, out of their control, MUST emit more. For example

the lottery of life - some people are born with a disability and will need to emit simply to arrive at the ‘healthy person’ starting position. For instance a wheel chair user relies on cars to get around. Should they be allocated more? Likewise pregnant women have private transport needs?

Where you are born - everybody is born in a different place and some places might have good public transport and others poor transport links. Should people born into poor transport areas be allocated more? Would we expect/want all people living in rural areas to move to urban? Of course we could argue that they have the freedom of choice and should face the consequences of a high emitting location, but society demands farmers and custodians of the countryside. From this point of view there is no choice (of course we may decide that these people emit less in other ways than urban dwellers and so it balances out, or that they have a greater capacity to generate their own carbon neutral energy e.g. turbines on farms).

My feeling is that equal share will always leave some members of society worse off, but on balance the impacts would be less than a Carbon Tax. Those who are disabled, pregnant, or live in the North West Scotland, should be compensated through our current benefit system, using the cash generated from selling the other 56% of credits to industry.


# 01 August 2006 20:56 Bez wrote:
re: Carbon Allowances

I think personal carbon allowances are potentially the best tool to change behaviour and you are right to look at this as a long term solution.

44 per cent of carbon emmissions come from individual citizens' gas, electricity, petrol and aviation consumption. What you didnt say was that these are sectors with growing emmissions - in part because unlike other parts of the economy, they are not subject to any cap on emmissions.

If we are serious about chaning behaviour and reducing emmission, we simply cannot do this by information alone - this is too weak.

Nor can you change behaviour by regulating products and services out of existence (we can ban the most polluting products but you cannot ban air travel as this wd be an unacceptable limit on freedom).

So we have to look at incentives. The question is carbon tax versus personal carbon allowances. Carbon taxes are clearly simpler but weaker on the grounds of equity, empowerment, effectiveness, and, if we can have a more informed debate, political acceptability.

1) equity - unlike carbon taxes which increase prices for all, personal carbon allowances will be highly re-distributive. remember, 60 per cent of people in the bottom quintile dont have a car and are far less likely to go on as many long haul flights (and are likely to live in much smaller homes). Some say ' what about the rural poor'. Fair point, but they will be hit just the same by carbon taxes such as petrol taxes. And anyway, no one is forcing people to live in rural areas - they can do what millions have done before and move to a city and get a better job.

2) empowerment - by giving people an allowance, people can choose which products and services to use their allowance on rather than slapping a tax on a particular service or banning it altogether.

3) effectiveness: the problem with green taxes are that they are often set at a rate that is too low to change behaviour, but high enough to raise money for the treasury. It is hard to raise taxes to a high enough level to change behaviour as taxes are simply associated with raising revenue for the treasury. The other technical issue is how do you know what price rise is needed to change behaviour - it relies on economists and central planners understanding of price elasticities. The great thing about a personal carbon allowance is that government sets the outcome - a reduction in carbon - and the 'price' rises and falls depending on whether consumers change their behaviour. So the more people simply stick to their lifestyle and buy their way out, the price rises until people think it is better to reduce their carbon use.

4) Political acceptability: although it feels pretty far fetched now, potential PCAs could be acceptable (in the same way road pricing is become more acceptable). Green taxes can feel like stealth taxes designed by the treasury. Personal carbon allowances at least have some moral purpose. PCAs focus on the outcome to be achieved - whereas taxes focus on the means of achieving it.

Just one final point. The tindall centre report shows how PCAs could work in a way that is similar to a carbon tax. People could simply decide to cash in their carbon allowance and pay as they go (in the same way as taxes are built into petrol prices). The only difference is that the level of the tax would change depending on the scarcity of carbon allowances. I think this point illustrates that milibands scheme could work in different ways for different people - some wd carry a carbon card, others wouldnt bother. The good thing about the carbon card however is that it makes our choices much more explicity - it provides constant feedback and is therefore more likely to change behaviour that stealth taxes.


# 01 August 2006 22:28 Sam wrote:
re: Carbon Allowances

"The argument that a carbon allowance scheme would be a 'license for fraud' can similarly be applied to any system - PayPal, phone top-up cards, VISA. "

No, there's a difference. When I buy something from you, each of us has an interest in ensuring that the money/goods on offer are genuine. When you bring a third party (the government) into the transaction, you create the opportunity for two parties to collude and defraud the third. A personal carbon allowance scheme will occupy a similar economic niche to VAT, and we all know that VAT fraud is unheard of.

"They feel we shouldn't explore carbon rationing, rather than consider the major benefits of this mechanism"

That's not my claim. My claim is that this method is equivalent to selling carbon permits to the producers, but more expensive and harder to audit. My claim is that if you want to introduce a tradeable carbon permit scheme (which is probably the best way to reduce the country's carbon emissions), the suggested personal scheme is not the best way to do that.

Please also note that I would support a tradeable permit scheme for producers over a tax, for reasons that have been outlined by other posters.


# 02 August 2006 13:43 Gerry Wolff wrote:
re: Carbon Allowances

This is a brilliant idea that cuts through much of the complexity of grants, tax breaks and special schemes that would otherwise be needed (see
brilliant_ideas/brilliant_ideas.htm .

Apart from the fact that carbon rations would be traded, DTQs are similar to the rationing schemes that operated in the UK during WW2. If rationing can be made to work with the low-tec methods that were available then, it can certainly be done today.


# 02 August 2006 22:09 sarah wrote:
re: Carbon Allowances

What worries me is not inequity or tax ideas - they are both wrong in my view for reasons well aired by others. No my worry is that this idea will simply be too late in making the cuts we need to stop climate chaos.

The Government's target for a 60% cut by 2050 completely misses the point on the need for targets. When we emit a tonne of carbon dioxide, it sits in the atmosphere warming the planet for over 100 years, So frankly it doesn't matter much how much carbon we emit in 2050 - what matters is the total amount we have emitted by then.

And the problem with this idea is that it could easily take 10 years to implement. If during those 10 years emissions stay much as they are now, we will have just 5-8 years worth of carbon emissions left before the UK has run out of its "fair share" of global emissions.

In other words once this system came in it might have to make 5 years worth of fossil fuel last for 34 years.

I am sure David will reassure us that he has no intention of doing nothing but this for 10 years - but the cumulative problem means the most important cuts we can make are the fastest ones. It is exactly like other long-term investments or loans - if you can pay more into your pension or off your mortgage in the early days, you gain the most in the end. And while ultimately this policy may help with medium to long term cuts - its the quick, rapid and dramatic ones that are the most important now.

So please be as brave with getting some short term cuts as you have been with this idea...and lets get going.


# 03 August 2006 12:45 James wrote:
re: Carbon Allowances

Its a Super idea, David- go for it!

When drought occurs, the benefits of water conservation can be easily shown to people: See for a tour of empty dams in Queensland, Australia.

Public identification and understanding of pressing issues backed up with policies to direct good behaviour (such as water restrictions) can lead to the appropriate response. Such as water conservation in a drought.

But the issue of communicating the need for carbon conservation to everybody such that each person in each country contributes fairly to climate change mitigation is far less visible.

Personal carbon credits will be a brilliant climate change educational tool and encourage industry to meet the needs of carbon conscious consumers.

There are many small actions we can all take to significantly cut domestic carbon consumption. We dont do these things now because the impacts are not visible. My bet is that even with a stringent quota, the market will be flooded with unused credits from people who've made small changes to their lives and drastically cut their emissions.

I recommend having a look at Yarra Valley Water's water bills which show customers their metered historical water usage and the average usage for a similiar household- the same could be applied for carbon.


# 03 August 2006 16:16 bez wrote:
re: Carbon Allowances

Sam makes two interesting points:

1) that this will encourage fraud because both the buyer of petrol/electricity and the seller have a shared interest in cheating the system (rather like VAT).

2) can you achieve the same benefits of personal carbon trading without the problems by having more upstream trading mechanisms like the EUETS.

On 1), fraud is a potential issue. But I think this depends on how the system is created. As you say if neither party has any interest in keeping the system honest it will fail. But what if the seller of electricity/petrol etc had to show that they had enough permits to cover the fuel they had sold (which is exactly how upstream trading wd work). They would then have a vested interest in getting the carbon allowances off the consumer - this is how some have argued the scheme wd work.

2) Upstream trading is defnitely the way to go for now. People are right to say we cannot wait for 5-10 yrs. But lets be clear about what problems it will solve and what it wont.

The supplier obligation will create an incentive for the electricity suppliers to reduce carbon emmissions. They will do a combination of a) help consumers reduce demand/increase efficiency plus b) increase energy prices.
If surface transport is included in EUETS, it wil simply involve higher prices at the pump.

The problem is that this cd easily become politically unacceptable (e.g. fuel price escalator) because it is achieving outcomes stealthily - pricing people out of the market, rather than being transparent and enabling people to make trade offs within a set of entitlements (which is surely more equitable and just). I also think that upstream trading relies purely on pricing and incentives to change behaviour whereas with a personal carbon allowance, you get the incentives plus a clearer feedback mechanism and set of expectations and norms for citizens, so you are less reliant on high prices to ration carbon.

So in essence PCAs cd be more empowering, more just, more effective, but i agree that in the next ten years, the supplier obligation and taking surface transport into EUETS are the best bet (though i worry about the inequities produced by the price impacts and the resultant political fallout)


# 04 August 2006 13:32 Andrew McLeod wrote:
re: Carbon Allowances

Sarah wrote:
"So please be as brave with getting some short term cuts as you have been with this idea...and lets get going."

Hear hear.

And a good place to start would be to tell the Rural Development Service (part of DEFRA) to stop using trivial landscape issues to prevent the planting of energy crops. Burning biomass instead of coal in power stations is a quick and painless way make significant cuts in CO2 emissions, but farmers need DEFRA approval to plant these crops. Nowhere near enough land is being planted with energy crops to satisfy the power stations' demand for biomass, and the NIMBY attitude of the RDS is just making matters worse.


# 07 August 2006 12:02 Laura Thompson wrote:
re: Carbon Allowances

A Brillient idea, those who oppose the scheme obviously have not read the paper properly. the scheme will simply deduct credits when paying fuel bills and at the pump. The crazy man who said we would need to go into every house to see how much people consume should look at his Fuel Bills / meeter readings more oftern if he think electricity and gas are not already metered.

Also extensive reserch has already been carried out into the way people use energy. It is well documented that those in lower income brackets and the fuel poor use less energy than their richer neighbours. This may be what we need to lift the 5million british homes out of fuel poverty.

well done an excellent policy that will bring about real change.


# 07 August 2006 12:35 Pete Norton wrote:
re: Carbon Allowances

While increasing numbers of us are choosing to reduce our emissions on a personal level, through individual and collective action (such as local Carbon Reduction Action Groups) there is urgent need for policy to back this up. If this government are serious about carbon reduction, why am i still paying 27p in tax per litre of bio fuel made purely from re-cycled vegetable oil? This is little incentive for me to go out of my way to use it in place of fossil fuel. In Germany there is no tax on bio fuel.
Why is Aviation effectively subsidised at every stage, from airports to kerosene, and why isn't every new planning application obliged to have the highest possible BREEAM specification, and include micro generation capacity? So while i agree that taxing individuals related to the actual amount of carbon used could be an effective tool by hitting people in the pocket, (the stick) - I'd like to see more 'carrots' to encourage changes in behaviour, and more real commitment to implementing policies which favour more sustainable activity. Lets face it, you can't breathe, eat or drink money, so lets put the future of the planet ahead of economic consideration. You pollute, you pay, whether you are a business, an individual, or a public body.


# 07 August 2006 18:07 David Hirst wrote:
re: Carbon Allowances

I have two suggestions about what you have called Carbon Allowances, AKA DTQs and Personal Carbon Allowances:

First, the name. Can we call them Carbon Shares? They are our share of the Carbon that we collectively agree can be emitted. Quota does not have the same implications for fairness, and who is really “allowing” them?

And, secondly, are they “personal”? They seem more associated with our duties as citizens. Giving at least some of them to empowered communities may offer the most effective emissions reductions. Many of the most effective ways of improving emissions efficiency are inherently community scale, not family or individual. For example, heat distribution networks, by which we share the heat from community scale electricity generation, works best if everybody in a street of an apartment block joins in. The shared heat avoids the need for smaller individual heat systems altogether, making overall savings in emissions greater than can ever be achieved by large scale central generation. While more efficient conversion of fuel to electricity is a worthy goal, even the best of current generator technologies cannot convert more than about 60% of the released heat into electricity. Putting the other 40% (or more) to good use immediately gives us very dramatic improvements.

Can we identify and encourage local groups who can achieve greater benefits with their Carbon Shares than we can achieve individually?


# 10 August 2006 01:39 paul wrote:
re: Carbon Allowances

I'm searching for a news report about energy efficiancy colour code law enforcement. I jumped for joy when I thought I heard that each property will be coded so that a tenant or house buyer will know how much the property will cost to keep warm. Yes, I can dream, of bent landlords being fined or imprisoned for deliberately failing to insulate because they make more money with gas and electricity meters. I have a radiator outside my flat with no control to switch it off, we all do here. Millions of bent landlords across Britain have been doing it for hundreds of years. I am mentally ill. I have been rotting in this expensive hellhole for over twenty years. All I have had from my landlords is complaints, especially when they are trying to cover up their own corruption. I was hoping that 'energy police' would stick these greedy irresponsible selfish low lives somewhere dark and cold, to remind them of the hell they have caused their tennants. If you decide to found "The Energy Police", I would be proud to wear the uniform for you and the planet. I know I'm dreaming; high tax payers and property owners are worshipped by government.; it seems that money comes before people and the planet. What is the point in paying tax if the people do not have a say in what the money is spent on. Do you think we would really vote to have 20 billion per year spent on class 'A' drug user rehabilitation or to have childrens schools and hospital wards closed down? Let me wear the uniform and I will fight for you.
thankyou for listening, Paul


# 10 August 2006 02:30 Sam wrote:
re: Carbon Allowances

bez says:

"The problem is that this cd easily become politically unacceptable (e.g. fuel price escalator) because it is achieving outcomes stealthily - pricing people out of the market, rather than being transparent and enabling people to make trade offs within a set of entitlements (which is surely more equitable and just). I also think that upstream trading relies purely on pricing and incentives to change behaviour whereas with a personal carbon allowance, you get the incentives plus a clearer feedback mechanism and set of expectations and norms for citizens, so you are less reliant on high prices to ration carbon. "

I'd hardly call increasing prices "stealthy" when the price is displayed in foot-high numbers outside the petrol station. Let us also be clear that with a system of tradeable carbon permits, the price to the end-user of a gallon of fuel is the same whether he buys it entirely with money or partly with money and partly with carbon credits.

You may be right that there is value in separating the carbon price and the money price, rather like out American cousins separate the sales tax from the price of goods in shops, so it is clear to the consumer how much Uncle Sam is raking off the transaction. It might provide a clearer psychological link between the cost of fuel and the emissions created, and so direct more of the consumer's energies towards conserving fuel and less towards grumbling. I'm not convinced that there's really much of an effect, though.

Perhaps a better idea would be to begin the scheme with a strict guarantee of revenue neutrality. Sell the credits to the oil refiners etc., ring-fence the money generated, and push it back out to the public as a tax credit (eg. by increasing the threshold for the starting rate of income tax). Ensure that this increase is clearly listed as the carbon credit bounty to avoid the goverment of the day claiming it as their own generosity. This scheme would actually be pretty much identical in financial effect to the scheme where you give every individual a wad of personal credits.


# 10 August 2006 12:15 Mark Roodhouse wrote:
The Return of Petrol and Fuel Rationing

David, this is an interesting idea with historical parallels to the schemes for petrol rationing and fuel rationing during the 1940s. These schemes were successfully implemented using paper and ink so opponents of personal carbon trading should differentiate between the technological issues raised by swipe cards and the economic and administrative issues raise by such a scheme. The swipe card would be the contemporary version of the ration book.

Selling such a scheme to a sceptical, if not hostile, public will be hard as several of these postings demonstrate. The redistributive effect of giving everyone a tradable entitlement should be emphasised. The illegal barter of ration coupons and rations during the 1940s and 1950s increased working-class incomes and strengthened social bonds between working-class consumers and middle-class consumers. Interestingly, the post-war Labour Government failed to recognise the socially progressive aspects of this illegal trade.

Countering the belief that individuals have a right to motor, as opposed to a right to freedom of movement, will be incredibly tricky. Even Hugh Gaitskell failed to shift opinion on this when faced with a very small number of private motorists in the late 1940s and it had a negative impact on the Labour Party's electoral performance in 1950.

If you are seriously considering this policy, you could avoid reinventing the wheel by revisiting the economic debates about points rationing schemes and rediscovering the principles that informed the successful rationing schemes of the the 40s and 50s.


# 10 August 2006 16:06 Lindsey Newton wrote:
re: Carbon Allowances

The reduction of speed limits has been hailed as the new 'wonder-cure' for the spiralling amount of C02 emissions in the UK this week, but unless there is a speed camera on every street corner, how will this policy be enforced? Even if motorists are caught on camera and fined, that money isn't going to repair a hole in the ozone layer or reverse climate change. I agree with many of the other readers that money talks, and if you, or your company for that matter are rich, then C02 emissions and climate change are easily hurdled.
The focus definitely needs to be placed upon industry and their contribution to global warming. Water companies lose vast quantities of the water they process everyday through leaks, and yet customer charges increase, the leaks continue and profits continue to grow for the bosses. Time, money and energy go into producing clean water and yet many water companies resemble proverbial 'leaking barrels', allowing precious resources to be poured in, never to reach fruition.


# 10 August 2006 16:56 Jeremy Heighway wrote:
re: Carbon Allowances

The problem: 'damaging' energy needs to be made more expensive to stop people wasting it, but people in general, and poor people especially, shouldn't be penalised for an amount of energy use that is reasonable.

Fairness of the system: If the price of energy is higher in the future, something needs to give people a boost to offset this burden up to a fair level. Thus, introduce a personal carbon quota/share/allowance. There is then a difference between having an incentive to save on wasted energy and being forced to save on essential energy because you can't afford it. Everyone can afford a certain amount just as before (i.e. a certain amount per person isn't more expensive). This is also why the credits MUST be at a personal level.

We already have one system in place which is anonymous - called cash - and several which are traceable - credit cards, cheques etc.

It would actually be far simpler to implement a system of increasing fuel taxes, while giving everybody in the country a lump sum ration per week/month/year to cover the extra cost of essentials, but there are potentially many advantages to having a second 'energy' currency in circulation in addition to 'raw' money.

(while we're on systems, can we have a system where entries have to be 'regularly' clicked on by satisfied readers to stay on the 'front' page, whilst 'junk' gets sidelined, please? A working, fair system may take a bit of doing, but the time it takes to sort out good comments these days is enormous - have people even read this? - is it even half good?- I dunno!)


# 19 September 2006 09:19 Andrew Jackson wrote:
re: Carbon Allowances

I read an interesting book on this area not too long ago: Mayer Hillman's "How We Can Save The Planet" (2004, Penguin Books), which was called "A small classic on a big topic" by the New Scientist. Proposes a radical carbon rationing system.

Andrew Jackson


# 22 September 2006 09:38 John Doe wrote:
re: Carbon Allowances

I love the way that you've made a scheme to ensure that the wealthy can continue to despoil as much as they can afford.

Way to save the planet with decisive action.


# 04 October 2006 14:12 Trevor Hopper wrote:
re: Carbon Allowances

As a member of the national federation of Bus Users I am trying to find out what were the new govt proposals mentioned by David at conference. I could not find anything that week in papers. Can you help?


# 17 October 2006 18:34 m. normanton wrote:
re: Carbon Allowances

The limited impact of 300% motor fuel taxes shows that taxes alone will not significantly cut carbon emissions.
So the only alternative is carbon rations.Both more effective and more equitable (low users able to sell quota).
We had rations in the War, and they worked adequately; with today's IT they would be a lot easier to administer.
During the war (before my time) I understand that rations were traded or given informally between family and friends. However proper market trading is much more desirable, and with modern IT easily done.


# 31 October 2006 14:36 Mike Kendrick wrote:
re: Carbon Allowances

It seems to me that the only thing Britain will lead in the Emission Control scenario is that on TAX !!!!
Can you also ask the question in your interviews with MP's etc why no on ever mentions shipping as their contribution emissions must be huge, or pleasure craft? as mentioned below, what about their emissions

To : ****
Can some one tell me why Luxury cruisers are still able to buy cheap fuel. They are allowed to buy red diesel cheaply for there use and can use vast amounts of fuel. I work on one 83 foot motor yacht that carries 2500 gallons of fuel. This boat also consumes up to 100 gallons an hour, does not have to comply with any fuel emission requirements or noise levels and is not required to have any form of government regulation to comply at all. I believe that if you want to help cut emissions try another route and challenge the government to control boat and ship emissions as they are not controlled as far as I can see.
Isn't it about time these owners are made to pay the real price for their fuel, after all if you can afford to spend a Million on a boat shouldn't you pay the current fuel price as all the motorists are forced to do?.
And more to the point why aren't the papers and the petrol manufactures taking the opportunity when on television to say Petrol is NOT nearly a pound a litre its the tax that makes it this price. Also find attached what government don't want you to know about global warming.

Mike Kendrick
4 Esgid Mair
CF63 1FD
01446 747352


# 03 November 2006 12:14 Keith Thompson wrote:
re: Carbon Allowances

Change the planning laws (as has happened in Scotland) so that households can install renewable source energy.

A B & Q wind generator costs £900 (after grants etc) and potentially generates 9000 kw or a realistic 3000 kw per annum saving about £300 a year to the family but you cannot install one without full planning permission which (if it went to appeal) would double the cost.


# 07 November 2006 16:35 Rachel Howell wrote:
re: Carbon Allowances

We MUST drastically limit greenhouse gas emissions - soon.
The only ways propsed to do this are carbon taxes or carbon allowances.
BUT: carbon taxes DON'T set an upper limit to emissions. In other words, they DON'T do what we need.
So, that leaves carbon allowances. OK, it's not a perfect idea. But it's the best. Therefore the only reason not to adopt it would be if you don't agree that we need to do something. Any other objections are dwarfed by the scale of the problem - we will just have to work them out as we go.
David, the idea is right, the time is NOW. I'm pushing for it where I can; please make sure you do the same.


# 11 December 2006 16:22 Paul Smith wrote:
re: Carbon Allowances

It is a shame that the proposed scheme only covers direct energy use - travel and domestic energy as recycling and re-use also have energy/carbon benefits. Should this scheme not also be used to encourage sustainable consumption? Especially since waste comes under DEFRA!!

Paul Smith
Chief Executive
Furniture Re-use Network


# 11 December 2006 18:55 Nick Stanley wrote:
re: Carbon Allowances

Oh dear David, someone in your Dept has found a draft script from the unfilmed 2nd series of 'The Thick of It' and you've gone and proposed it as policy!!! Oh - can we have a brand new IT system to support this initiative as well - preferably costing several billions please .........


# 12 December 2006 11:16 Stephen Laurenson wrote:
re: Carbon Allowances

Oh dear !!!
It may sound good, but the implementation would be another bureaucratic expensive disaster. This is another DEFRA "what idiotic plan can we think of to make sure that we still have jobs". If you want proof just look at the RPA.
Instead of spending all the money on the bureaucracy, and us inevitably having to pay money so that big brother has still more information on us.
If you really want to make a difference use thev money directly to reduce the cost of domestic power generation, ie photo-voltaic, solar, wind etc. This way the funds will make a real difference.
Lets cut out all the nonsense.


# 12 December 2006 15:22 paul wrote:
re: Carbon Allowances

Andrew McLeod is misguided when he states that SUV's should carry a very high CC price tag. The SUV should not be singled out. I own an SUV, which actually emits the same CO2/km as a 2004 Ford Mondeo Estate and LESS than a new Mini Cooper S, or 1.8 litre Vauxhall Zafira. Numerous "family" and estate cars actual emit more CO2/km . It returns similar mpg figures to the above.
I assume then that Mr Mcleod will view the above cars with the same disdain as he views all SUV's. Is it CO2/km levels that McLeod objects to or the SUV specifically?


# 13 December 2006 12:26 Green Admiral wrote:
re: Carbon Allowances

Is this another idea thats not quite thought through? Where do those who use less get the spare allowances from? How do those who use more get them from those who use less? Whose going to check that they need more anyway? and that their not abusing the system. Because as we all know there will be those who find the wrinkle or loophole and exploit it their benefit. So which organisation is going to use lots of carbon credits to make sure that (I/we/us) save some?


# 14 December 2006 14:46 James Davies wrote:
re: Carbon Allowances

Dear David:
I am please you are making on "Carbon Allowances"
but your criticism of the "Tories" view about the free market in your article in the Independent newspaper.
Because the government which you member of to reduced greenhouse gas emossion to me not working.
But I hope not hot air and stop talking about this problem because the future next generation young children have got to live with the policy of this government?
Yours sincerely
James Davies, Port Talbot, South Wales,


# 15 December 2006 15:49 Gage Williams wrote:
re: Carbon Allowances

This could work provided it were restricted to purchases of fossil fuel when the card would be required for buying, for example, petrol at a filling station or heating oil or domestic gas and domestic electricity. once a citizen/household had used up their carbon credits, they would start to pay a carbon tax on their purchases. It could also be used for air flights. Any widening of the scheme beyond domestic heat, electricity and travel would become increasingly hard to administer.

I live in Cornwall where we are successfully growing miscanthus (elephant grass) which is planted as rhizomes just once and remains producing an annual crop for at least 25 years. The crop produces 16 to 20 oven dried tonnes/hectare per year which is 48% pure carbon. Compact power Ltd, a British company based at Avonmouth, is building a small plant to convert 12,800 tonnes (grown on just 750 ha) of harvested miscanthus (and wood waste in general) into 1.2 MWe, 2 MWthermal and 3,600 tonnes per annum of charcoal. When pelletised, 1.5 tonnes of charcoal replaces a tonne of heating oil thereby saving 3.15 tonnes of CO2e emissions (Lord Whitty HofL reply). The miscanthus requires just cutting and baling in Mar/Apr unlike biofuels that require at least eight tractor passes per year, fertiliser, pesticide and insecticide. The net return of energy on oil seed rape and wheat is about 15% whereas the net return on miscanthus is >85% My question is Why is Defra spending so much on biofuels rather than far more energy efficient C4 crops such as miscanthus?


# 05 January 2007 13:51 Ian Harris wrote:
re: Carbon Allowances

"Change the planning laws (as has happened in Scotland) so that households can install renewable source energy.

A B & Q wind generator costs £900 (after grants etc) and potentially generates 9000 kw or a realistic 3000 kw per annum saving about £300 a year to the family but you cannot install one without full planning permission which (if it went to appeal) would double the cost."
I want to make a personal contribution to reducing CO2 by installing a wind turbine and solar panels. You (the Government) want me to do this. My Local Council Planning restrictions do not want me to do this. Help me!
I commute to work by car as there is no bus service to my destination. You are not improving the bus/train services and you have curtailed the proposed tram scheme for my area `to save costs'. I want to travel by affordable public transport, David. Help me!
I would like to reduce my `food miles' by buying affordable UK goods but foreign imports flood my shops and thanks to my salary I have to buy within my means. CO2-based import restrictions would encourage my shops to supply more UK goods which I want to buy, David. Help me!
Instead of spending gross amounts on punative taxation schemes, why don't you invest in schemes to support others like me who want help to reduce their CO2 footprint, David?
Who are you helping, David? Why do you only seem focussed on making money from Carbon Credits, David? Do you take any notice of the people's comments, David?


# 25 January 2007 19:23 Trevor Moriarty wrote:
re: Carbon Allowances/Shares

What a wonderful piece of multi billion pound non-sense, why not call carbon units by their proper name 'carbon shares' which will be traded on a carbon stock exchange by market traders to the highest bidders once they have scooped up as many units as possible, off loaded by the poor.Who would then have to buy them back to heat their homes, so making them incredible vulnerable especially in the winter by the way will the elderly be eligible for a constant supply of free units? I doubt it. Yet another expense on top of already escalating council tax bills.Where do the government think all this extra money will materialise from to pay for this.

Be honest about it, this would be yet another tax heaped on an already over taxed and over burdened British public.

Could/does any one trust this goverment to manage any scheme involving such huge cost and on yet another piece of untried technology given their appalling track record on such projects, wasting billions of our money on failed IT.
Just for starters who would pick up the cost of changing just one piece of the pie, petrol station pump debit card terminals, to incorporate your spent carbon tax when purchasing fuel. A huge undertaking that no doubt we would have to pay for, not to mention the fraud implications.What if your debit card was stolen ( I am sure there would be a thriving trade in stolen carbon taxes) how would you claim them back? A whole new branch of the police will have to be put in place to deal with it (more cost).

The whole proposal is a non-starter (what did it cost?) which will inflict huge misery on sectors of the population already suffering under massive fuel bill increases imposed on us from foreign owned utilities holding the goverment to ransom from the safety of europe.So much for european 'partners'.

Something has to be done, but this ain't it!


# 27 January 2007 22:38 Nasrin Azadeh wrote:
re: Carbon Allowances

Environment was proud of its Minister's performance in BBCWorld today at Davos meeting. Very impressive, persuasive, and rational.


# 29 January 2007 10:10 neil cockburn wrote:
re Comments on Prince Charles visit to USA

Your reported comments re Prince Charle's vist to the USA suggesting he could have stayed at home and accepted the award by video link would be more valid if all Government departments applied the same rules. The fact that he flew on a scheduled BA Flight seems to have escaped your thinking. Are you going to lead by example and not undertake any non essential foreign trips. Your colleague. Geof Hoon could also do his bit in his capacity as Minister for Europe and pressure the EU to stop the farcical monthly move of the European Parliament from Brussels to Strasbourg.


# 30 January 2007 12:03 Carol Hughes wrote:
re: Carbon Allowances

A thought on joining up Government policy.

Bizarrely, the government only gives grants to insulate the loft. I live in a ground floor flat so my “loft” is the flat above. I am wasting energy and paying to provide underfloor heating for the people upstairs. My carbon footprint is bigger than it would be if my flat was well insulated. I would use more than my fair share of carbon credit.

I have no idea how many people live in flats without proper insulation above their ceiling. Wouldn’t it be a great idea if we could all get grants to insulate our ceilings and stop wasting energy.