In this diary, I will try to outline an idea for how to reduce CO2 emissions which I call "Personal Carbon Quotas".
The basic idea behind PCQ's is quite simple: A country sets a maximum for how much CO2 may be emitted in a year. The total "allowed emission" is divided equally among all citizens. No-one is allowed to burn fossil fuels without owning a corresponding quota. Since companies do not get any quotas, they have to buy quotas from citizens. Since only a fixed amount of quotas are available, only the fixed amount of CO2 will be emitted.
Personal Carbon Quotas are also known as "Domestic Tradable Quotas" (DTQs) and "Tradable Energy Quotas" (TEQs). I have chosen to use PCQ because it both tells you which kind of quota this is (it's a carbon-quota) and what differentiates it from other carbon quotas (it is allocated to persons).
George Monbiot mentions a similar concept which he calls a "personal carbon ration" as a part of his larger plan to lower emissions - the main difference being that only 40% of the quota is given to citizens, the rest is sold on government auctions.
The main benefit of the system is that it is "obviously" fair. This is especially important when comparing to quota systems like the one currently being implemented in most EU countries, which in generally work by giving the quotas directly to the big polluters like power companies and heavy industries.
The system also gives people the option of not using their quotas - thus further reducing emissions.
The system as described would be implemented at a national level. The basic idea - allocating an equal carbon quota for each citizen - could be used internationally as well. Like the national system, it would be a great improvement over the current system. In stead of bragging about their reductions, first world countries would have to face the fact that they are emitting far more than their fair share.
(I may elaborate on this in a future diary)
The national system would be easiest to implement in countries which have a central registration system for all citizens. In Denmark (where I live) it would probably be quite easy to incorporate it into either the tax system (which covers virtually all households) or one of the universal pension schemes (which is already doing accounting similar to what would be necessary).
A few differences to the TEQ system:
When you buy energy, such as petrol for your car or electricity for your household, units corresponding to the amount of energy you have bought are deducted from your TEQs account, in addition to your money payment. TEQs transactions are automatic, using credit-card or (more usually) direct-debit technology.
Monbiot's proposal is similar. I would suggest that this is handled by requiring the sellers of fossil fuels to acquire the quotas for their fuel prior to selling it. This will greatly reduce the day-to-day bureaucracy of the system.
Every adult is given an equal free Entitlement of TEQs units. Industry and Government bid for their units at a weekly Tender.
I would suggest that children are given quotas as well - possibly a bit lower than for adults.
Question (or counter-arguments) and answers.
How would I find a buyer for my quota?
i would suggest that by default, your quota will be sold at regular intervals at the current market price by the government agency handling the distribution, and the resulting income either sent to you on a check, transfer directly to your bank account or incorporated into your income tax. Only if you request it will you get a voucher (paper or electronic) which you can sell yourself, save for selling later etc. Note: This does take away one of the benefits of the system - having people consciously decide what to do with their quota. However I think that protecting people from unnecessary bureaucracy is more important.
If companies have to pay for their quotas, they will not be able to compete with foreign companies who don't have to.
Giving quotas to companies is in reality equal to giving them financial subsidies. The same goes for countries not imposing any restrictions on their industry. Giving the subsidies in cash makes things a lot clearer. Alternatively, give export subsidies, or impose tariffs on imports. An additional benefit of not giving the quotas to existing companies is that it removes barriers to market entry
But subsidies/tariffs are illegal according to EU/WTO/GATT/whatever regulation!
Then change the rules of those institutions!
(I will try to go into detail on this in a later diary)
Making power companies pay for their quotas will increase the price of electricity/fuel. This will increase the burden of low-income citizens
Each citizen will have an additional income as well from selling their quotas. In fact this will have an overall equalizing effect on available income (it is similar to a "negative flat tax")
But people living in sparsely populated or cold areas use a lot more gas/energy than the average. These people will be the victims of such a policy!
If the price of energy is changed to reflect the "true costs", no matter the mechanism, these people will be less well off. This reflects that their life style is less sustainable than that of people living in temperate climates and able to use public transportation. If we change this, for instance by giving subsidies to rural areas, we are in fact removing the necessary incentives which would hopefully drive a long-term change in living patterns.
A lot more can (and will!) be written about this. I decided to publish now to get some feedback.