Personal Carbon Allowances were first proposed by David Miliband, DEFRA and the Sustainable Roundtable in 2007, but it was an idea ahead of its time. We didn’t yet have the carbon foot-printing software in place and perhaps we weren’t yet scared enough! The global financial crisis pushed it off the agenda, but now the climate crisis is becoming more urgent and we can better measure the carbon footprint of products, services and activities, they make a lot of sense.
Personal Carbon Allowances: how they work
Just like managing a financial budget, with the personal carbon allowance (or PCA) we’d be expected to live within a carbon budget. See https://www.theguardian.com/sustainable-business/personal-carbon-allowances-budgets. This 3-minute video below gives a good summary:
Transactions, journeys and purchases would use up the carbon allowance. This benefits green behaviour and would drive innovation into sustainable products and business models. Individuals would choose products and services with a lower carbon footprint, or prefer to borrow, repair or re-use rather than new. Companies would then be incentivised to provide greener products and services, for example by sourcing their energy from renewable sources, designing green products, making it easier to borrow rather than buy or providing easy repair options.
This idea is an alternative to green taxation. Although green taxes allow more individual freedom, they make environmentally harmful behaviour the privilege of the rich. A personal carbon allowance is more equitable – like a kind of rationing as everyone has the same carbon allowance which is fairer, but there is still room to manoeuvre if you allow unspent carbon to be sold to those who need more than they have. Hence when others have run out of carbon, they can buy some of the leftover carbon from those who aren’t using as much.
Currently, carbon trading, pricing and offsetting exist but mostly at the company/country level as opposed to individuals, however, extending these ideas to individuals to create a kind of carbon-based currency would be transformational. Personal Carbon Allowances didn’t catch on when they were first proposed around 2007, but now the climate crisis is becoming more urgent and we can better measure the carbon footprint of products, services and activities, they make a lot of sense. This Guardian article from 2012 looks at the historical context of PCAs in the UK.
2021 Academic Article
Fuso Nerini, F., Fawcett, T., Parag, Y., & Ekins, P. (2021). Personal carbon allowances revisited. Nature Sustainability, 4 (12), 1025-1031.
Abstract: Here we discuss how personal carbon allowances (PCAs) could play a role in achieving ambitious climate mitigation targets. We argue that recent advances in AI for sustainable development, together with the need for a low-carbon recovery from the COVID-19 crisis, open a new window of opportunity for PCAs. Furthermore, we present design principles based on the Sustainable Development Goals for the future adoption of PCAs. We conclude that PCAs could be trialled in selected climate-conscious technologically advanced countries, mindful of potential issues around integration into the current policy mix, privacy concerns and distributional impacts.
This solution was covered most fully in The Assassin. There was apprehension around the idea of personal carbon allowances from the characters in The Assassin, but you may also remember it was the most effective solution to our climate crisis. Similar alternatives such as carbon rationing also appear in Climate Gamers and Saving the Titanics. It is also covered in the play ‘Murder in the Citizens’ Jury’.
‘Let me recap.’ Sarah nodded at Andrew, who stood up and wrote PCA on the whiteboard. ‘We need to limit global temperature rise to 1.5 degrees Celsius, and this requires immediate and extensive reductions in greenhouse gas emissions. There are several versions of this idea, but the key aspect is that Government sets a personal and equal cap on emissions so everyone would receive the same carbon allowance.’
The click-clack of knitting seemed to echo each statement. Steve tapped his fingers on the table impatiently.
‘Once your allowance runs out, consumption would become much more expensive. Those who don’t use up their allowance can sell their remainder on the personal carbon market. This benefits less well off or greener people and encourages people to reduce their carbon footprint. For example, by insulating their homes or using more energy-efficient transportation.’
Barry put his hand up. ‘How would it affect medium to low-income households?’
‘Good question. It’s been calculated that 71% of low-income households would be better off under PCAs,’ said Sarah.
extract from The Assassin
Our experts have classed this solution as a gamechanger.
How does this solution rate on:
Read More
Dr Tina Fawcett (University of Oxford), who co-authored the paper, also helped to contribute to The Assassin by advising D.A. Baden during the writing process.
Typical options for design of PCA scheme.
The details of the scheme design will determine its distributional effects. There isn’t a ‘right’ answer – but there is a balance between administrative simplicity and adjusting for factors which trap people into higher carbon lifestyles (like where they live, whether they can afford to invest in energy efficiency / renewable energy, disability etc.). There are also trade-offs to be made between equality/social justice and liberty. A rationing model is more equitable but may be less politically palatable in western democracies with liberal values.
Carbon Savings
These will vary by region. UK carbon emissions (not including imported materials) were 342 million tonnes in 2021, all GHG were 425 MtCO2e. This is the whole economy – and on a ‘territorial’ basis.
The number is bigger if you include imported goods and exclude exports.
If PCAs were applied to personal transport and household energy use, it would cover about 40% of the national total (territorial) (about 137 million tonnes), but considerably more if material goods were included in the scheme.
Dr Francesco Fuso Nerini, an expert on PCAs also said “in the story it sounds like PCAs will substantially damage the economy. I would argue that, even if it is difficult to say as this was never tried at scale, it could also create many thriving businesses for ideas that provide alternatives to services with low carbon emissions. This could include renewables and energy efficiency (which create more jobs per unit of investment compared to fossil fuel industry), completely new technologies for low-carbon services, and schemes for sharing etc.”
Read Less
