Day trading on carbon

Gas pumpThe carbon dioxide spewing industry has used an emission trading system for years. A company that exceeds its CO2 emission quota can buy the right to pollute more from another company that has pollution credits left. Britain is now proposing to extend this system to individuals.

British climate researchers want to create a system of "Domestic Tradable Quotas" for measuring, buying and selling of carbon emission credits. "Under the plan, every Brit would be issued a sort of debit card charged with an equal number of personal carbon credits at the beginning of the year. If you pollute more than your share, you could then buy more credits from someone more Earth-friendly." Mike Wendling of Grist magazine has the story on this ambitious plan.

A plan of this magnitude has considerable information management and usability hurdles to overcome. Let's examine some of them.
  • Convenience. Would you hand over an ID card every time you filled up your gas tank (petrol, British readers)? Each time you make a purchase that results in carbon emissions your environmental account needs to be charged. How do you record those purchases in a convenient manner? Are all gas stations expected to install readers for the new ID cards? A wide majority of adult consumers already have a debit or credit card that uniquely identifies the owner. Why not identify the consumer by their Visa card and handle the carbon charge behind the scenes transparently? Is it really necessary to introduce yet another card?
  • Scope. How do you calculate a carbon credit for a head of lettuce bought at the grocery store? Storing vegetables at the store requires cooling, which in turn uses electricity. Simple enough; distribute daily power consumption among the items sold and convert it into emission credits. But it gets more complicated. The lettuce was trucked to the store from a wholeseller. Do you include carbon emissions from the delivery truck in the price of the lettuce? And before that, it was trucked to the wholeseller from a farm. Do you include that trip? Do you charge fewer credits for lettuces trucked in from local producers than those flown in from Spain?
  • Privacy. Would you let the government track each time you turned on your washing machine or computer? As much as we would like to think that such information is nobody else's business, it is already out there. Electricity and natural gas consumption is tracked in detail by utility companies. Accessing those figures and charging our carbon accounts correspondingly is just a matter of pulling the information into one big database and crunching the numbers.
  • Fairness. "According to research by Tina Fawcett of the Environmental Change Institute at Oxford University, personal emissions among Britons currently vary by a factor of up to 12 -- so capping everyone's energy use at the same level might be a recipe for all sorts of trouble, in the nation that brought us soccer hooligans. But low-carbon users who don't drive or fly much would be able to sell their excess units to Hummer owners, jet-setters, and others who refuse to get on the energy-reduction bandwagon." It seems like the market-based system would reward and punish everyone duly. But like any system, Domestic Tradeable Quotas is likely to have loopholes. The rich don't pay taxes progressively so why would they dish out for the Hummer emissions either? The bill's sponsor, Member of Parliament Colin Challen says that "a voluntary approach will only get through to about 20 percent of the population." Even in the new system, this 20% will pay their carbon credits dutifully while the remaining 80% of us will try to wiggle our way out of it.
British policy makers acknowledge that "personal carbon allowances are a very attractive intellectual idea. The implementation would potentially be very expensive, but that shouldn't stop us from looking at the arguments."

While the information management and usability problems are solvable — create a nationwide database, produce and distribute the carbon cards, and make sure the whole system runs smoothly — the biggest job likely is to convince citizens to support the idea.

Resources:
BBC News "Personal carbon quotas considered"
Mike Wendling's story "In the Cards"

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