Emissions trading schemes (also known as ‘cap and trade’ schemes) are one of the policy instruments available for reducing carbon dioxide (CO2) and other greenhouse gases. Personal carbon trading is the term commonly used to describe those proposed greenhouse gas emissions trading schemes that directly involve individuals in trading.

The proposals that fall within this category include:

• Domestic Tradable Quotas (DTQs) were devised by environmental writer, David Fleming, who first published the idea in 1996. The UK's Tyndall Centre for Climate Change Research has been researching DTQs since 2003.

• Personal Carbon Alowances (PCAs) – described in the book “How we can save the planet” by Mayer Hillman and Tina Fawcett, work ongoing at the Environmental Change Institute, Oxford, UK

• Tradable Energy Quotas (TEQs) – devised by David Fleming as an alternative name to DTQs

All of the above proposals rely on the allocation of emissions credits to individuals on a per capita basis. This could be done on a national, or international (e.g. EU) basis. Individuals would most likely hold their emissions credits in electronic accounts, and would surrender them when they make carbon-related purchases, such as electricity, heating fuel and petroleum – PCAs would also require individuals to use credits for public transport and air flights.

As the name implies, personal carbon trading schemes are flexible. Individuals that are over-allocation (i.e. need more emissions credits than they have been given) are able to purchase additional credits from the open market, and individuals that are under-allocation can sell. This means that personal carbon trading schemes are less regressive than a carbon tax, as some low income people are likely to be better off, whereas with a tax all low income people are worse off, prior to revenue redistribution.

Proponents of personal carbon trading claim that it helps increase ‘carbon literacy’, thereby allowing individuals to make a fair contribution to reducing carbon dioxide emissions. It also allows the burden of reducing emissions to be shared evenly throughout the economy, rather than focusing all the attention on business and governments.

Personal carbon trading has also been criticised for possible complexity and high transaction costs. As yet, there is no reliable data on these issues. There is also the criticism that personal carbon trading will be publicly unacceptable.

Renewable Energy Credits, or Green Tags

An alternative type of carbon trading is called green tags. Conceptually, green tags function as a subsidy on pollution-free energy producers, rather than a tax on pollution-causing industries. Rather than paying for the right to emit, say, 1 metric tonne of greenhouse gas, one can buy a green tag and pay for an equivalent amount of energy to be produced, pollution free. The end result is similar to buying carbon credits. Green tags can be purchased in small or large quantities from many organizations, such as Native Energy ^*. A renewable energy provider is issued one green tag for each 1000KWh of energy it produces. The green tag can then be sold on the open market.

See also

• Sky Trust proposal - devised by Robert Ayres, also described in the book "Who Owns The Sky" by Peter Barnes

• Feasta proposal - developed by The Foundation for the Economics of Sustainability (FEASTA) in Ireland

• Green tags

External links

• Article entitled "Carbon Trading for Individuals?" with online forum on the website of the UK Sustainable Development Commission
• RSA project on personal carbon trading
• RSA Journal article - "What we must do to save the planet"
• Tyndall Technical Report 39 - a detailed report on Domestic Tradable Quotas (DTQs)
• David Fleming's website on Tradable Energy Quotas