Personal Carbon Trading

Stephen Elderkin, DEFRA

The role of personal carbon trading (PCT) is discussed in relation to emissions from leisure, aviation, personal car use, electricity, and domestic primary fuel. The case for PCT links to the relationships between emissions and energy demand, with demand being a function of the energy used across a range of energy services. Despite energy efficiency policy delivering savings, energy service demand is growing by around 0.5% per annum and PCT is seen as a possible route to help reduce this. The types of PCT vary, but generally: they require individuals to surrender allowances when purchasing energy; the total allowances are allocated free on a per capita basis; and they are tradable between individuals. It is suggested that the visibility and price signal provided by PCT would begin to influence behaviour, but in terms of cost-effectiveness, linking to marginal abatement options, international credits and resource costs of additional abatement, analysis suggests that the costs of PCT could be 15 times the benefit. A number of PCT myths are also discussed.