Government cans personal carbon trading

Defra report says scheme would be too unpopular and set-up costs would outweigh financial gains

The UK government has backed away from a carbon-trading scheme for all citizens.

The Personal Carbon Trading Initiative, floated by David Milliband in November 2006 when he was environment secretary, would have seen every UK citizen issued with a carbon credit allowance card which contained their annual carbon emission allocation.

Every time a citizen consumed non-renewable energy, the card would be debited. Those who didn’t use all their allocation would be able to sell back carbon credits to a central bank. Those who required more would have to buy them on top of the price for the fuels they bought.

But a report published by the Department for Environment, Food and Rural Affairs (Defra) has mothballed the scheme, saying that while it is a good idea, it is ahead of its time and not yet viable.

Defra’s report says the implementation costs of the scheme would outweigh its cost benefits and would cost between £1bn and £2bn to run, but that there were no significant technical hurdles to overcome and would achieve the aim of engaging all citizens in reducing their carbon footprint. The report also warns that such a scheme would be deeply unpopular.

“There is scepticism that such a scheme would be fair, that government could be trusted to manage it or that it would deliver emissions reductions. In addition there was little evidence that people would be likely to trade – a crucial element of the scheme,” says the report.

However the idea has not gone away entirely and may be resurrected in the future should the economics and public-acceptability issues change.

“The government remains interested in the concept of personal carbon trading and, although it will not be continuing its research programme at this stage, it will monitor the wealth of research focusing on this area and may introduce personal carbon trading if the value of carbon savings and cost implications change,” says the report.