Environmental Audit Committee

24 April 2007 NEW INQUIRY

24 April 2007 NEW INQUIRY

Personal Carbon Allowances

The Environmental Audit Committee (EAC) is today launching an inquiry focussing on personal carbon allowances and the feasibility of implementing a carbon trading scheme between individuals. Recent inquiries of the Committee have examined several aspects of carbon trading and credits, such as the European Union Emissions Trading Scheme and the voluntary carbon offset market; personal carbon trading represents a potential further addition to the basket of measures intended to reduce carbon emissions through trading, and therefore merits scrutiny by the Committee.

Personal carbon allowances have emerged as a potentially effective measure which could guarantee a clear reduction in that portion of UK emissions caused directly by homes and individuals. The idea is attractive for many reasons, not least because it could reduce emissions at the point of lowest cost, and would enforce and incentivise individual responsibility. However, while the idea of personal carbon allowances has on occasion been elevated to the position of a panacea, it has rarely been evaluated in detail and there are many questions which remain to be answered. The Committee is interested in two principal lines of inquiry:

Is a scheme of personal carbon allowances desirable, and could such a scheme be practical?

More specific points of interest include:

€ The likely impact of a personal carbon trading scheme. The Committee would like to investigate the likely impact of a scheme of this nature, not only on carbon emissions, but also on the economy, different markets, existing 'green' policies, and the public themselves. The Committee would also welcome opinions on whether favourable conditions currently exist for the introduction of such a scheme and, if not, what conditions would be required for such a scheme to be feasible, desirable, and palatable to the public and business community. In particular the Committee would be interested to identify any areas where further research and consideration would be required in order to fully assess the impact and feasibility of a personal carbon trading scheme.

€ Operational feasibility. The Committee would also like to investigate the operational feasibility of a personal carbon trading scheme, notably whether the institutional and operational systems to implement the scheme currently exist and, if not, what degree of system and institutional development would be required for the programme to operate effectively. The Committee also welcomes opinions on how the administration of a scheme should operate, and who should have responsibility for managing the scheme, setting the emissions caps and deciding the allocation of credits. The Committee is also interested in the likely cost of implementing and operating the system, and the feasibility of running an effective pilot scheme.

€ Variations between different proposed models. The Committee is interested in the various different proposals for personal carbon training schemes, and would like to investigate the distinctions between these ideas, such as:

- who should participate in such a scheme?

- how should permits be allocated?

- which carbon emissions should be included under the scheme?

The Committee would also welcome any opinions on alternatives to a compulsory system of personal carbon trading, such as a household-based system, a voluntary scheme, or a rewards-based system for saving carbon credits.

€ Public acceptability and involvement. Given that a personal carbon trading scheme requires the cooperation and engagement of the public, the Committee would welcome views on the likely response of the public to such a scheme, not only on the extent to which such a scheme would be acceptable, but also on the capacity of the public to adopt and benefit from the scheme, and the likely trading habits that would develop. The Committee would also like to examine the extent to which such a scheme would be just and equitable, and what possible measures would be required to ensure no groups were unfairly disadvantaged.

The Committee invites organisations and members of the public to submit memoranda setting out their views, both on those points listed above and on other relevant areas of interest.

Written evidence should be sent to the Committee in Word format by Friday 8th June 2007, by e-mail to eacom@parliament.uk A brief guidance note on the preparation and submission of evidence is available on the Committee's web pages. Following the submission of evidence, the Committee intend to take oral evidence from a limited number of organisations in June, and subsequently to publish a report. For further information on this inquiry, please telephone 020-7219-0715.

Notes for Editors

1. Details of all the Committee's press releases and inquiries, together with its Reports, oral evidence and other publications, are available on the Committee's Internet home page, which can be found at: www.parliament.uk/eacom