Environmental Audit Committee Press Notice

Government must not abandon work on personal carbon trading

Personal carbon trading has the potential to be a more effective means of cutting carbon emissions in the household sector than green taxes, says the Environmental Audit Committee.

The Committee's report: Personal Carbon Trading published today (May 26), which looks at the concept of allocating individuals an allowance of marketable carbon credits, urges the Government to lead and coordinate further research into personal carbon trading.

MPs are disappointed with the Government's decision, following its pre-feasibility study into personal carbon trading,1 to wind down its work on developing and assessing the practicality of such a scheme.

The Committee says radical measures must be considered if the personal and household sector is ever to make a meaningful contribution to UK targets. It finds that personal carbon trading has the potential to be more engaging, more effective and more progressive than green taxation, provided it is carefully developed and sensitively implemented. Personal carbon trading could be essential if the UK is to meet its emissions targets.

Personal carbon trading would allow individuals to surrender their credits as they made certain purchases that resulted in emissions, such as electricity and fuel. Those who needed or wanted to emit more than their allowance would have to buy extra credits from those who could emit less than their allowance, thus rewarding low-emitters.

The Committee acknowledges the obstacles facing the successful development of personal carbon trading, not least the cost of implementation, the issue of dealing with vulnerable groups, and the extent of public resistance to the concept. However, these challenges must be met head on. It is crucial for the Government to take an active role in coordinating research into personal carbon trading if the concept is ever to make the leap from the academic realm to a truly viable policy option. The Committee wants to see significant further work and development.

Any personal carbon trading scheme would need to be accompanied by a range of policies, educating and assisting individuals in making the necessary changes to their lifestyle. It is also imperative that any personal carbon trading scheme includes a detailed and determined strategy for assisting disadvantaged groups and the financially excluded.

The Chairman of the Committee, Tim Yeo MP, said:

"We found that personal carbon trading has real potential to engage the population in the fight against climate change and to achieve significant emissions reductions in a progressive way.

"The idea is a radical one. As such it inevitably faces some significant challenges in its development. It is important to meet these challenges. What we are asking the Government to do is to seize the reins on this, leading the debate and coordinating research. The potential of personal carbon trading demands that we continue to pursue its development as a viable policy option."

1 Defra, Synthesis report on the findings from Defra's pre-feasibility study into personal carbon trading, April 2008.

Notes for Editors:

The report published today by the Environmental Audit Committee (EAC) is its Fifth Report of Session 2007-08, Personal Carbon Trading, HC 565. Details of all the Committee's press releases together with its Reports, oral evidence and other publications, are available on the Committee's website at: www.parliament.uk/eacom/

Personal carbon trading is a concept that aims to provide emissions reductions from individuals and households. Under a personal carbon trading scheme, individuals would be allocated an allowance of carbon from within an overall national cap on the quantity of carbon emissions produced by individuals within the jurisdiction. Individuals would then surrender their credits as they made certain purchases that resulted in emissions, such as electricity and fuel. Those who needed or wanted to emit more than their allowance would have to buy extra credits from those who could emit less than their allowance, thus rewarding low-emitters. In theory, the market effect would encourage people to pursue energy efficiency in the home and to reduce carbon emissions in other areas, such as transport. Over time, the overall emissions cap (and therefore individual allocations) could be reduced in line with international or national agreements.

Copies of the EAC report will be available in hard copy from 11am on 26 May 2008; and can be obtained from TSO outlets and from the Parliamentary Bookshop, 12 Bridge Street, Parliament Square, London SW1A 2JX (020 7219 3890) by quoting House of Commons No 565. The text of the Report will also be available from approximately 3.30pm onwards on its publication date, on the Committee's Internet homepage: www.parliament.uk/eacom/

For further information on the report, or to bid to interview the Chairman, journalists may phone the Committee's press officer, Laura Kibby, on 020 7219 0718.

FURTHER INFORMATION:

Membership:

Chairman: Mr Tim Yeo, MP

Mr Gregory Barker MP Mr Nick Hurd MP Mrs Linda Riordan MP
Mr Martin Caton MP Mr Mark Lazarowicz MP Mr Graham Stuart MP
Mr Colin Challen MP Ian Liddell-Grainger MP Jo Swinson MP
Mr David Chaytor MP Shahid Malik MP Dr Desmond Turner MP
Martin Horwood MP Phil Woolas* Joan Walley MP

* The Minister for the Environment has ex-officio membership of the Committee in like manner to the Financial Secretary's membership of the Committee of Public Accounts.