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Personal carbon trading: A policy ahead of its time?

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  • Fawcett, Tina

Abstract

In 2008, the UK government undertook a review of personal carbon trading (PCT) and declared that it was 'an idea currently ahead of its time'. PCT is a radical policy proposal which would entail all adults receiving an equal, tradable carbon allowance to cover emissions from household energy and/or personal travel. The allowance would reduce over time, in line with national emissions reduction goals. The government's key concerns about PCT were its social unacceptability and high cost. This paper reviews the literature and identifies knowledge gaps, and then discusses whether these concerns are justified. Contrary to the government's conclusions, most research shows PCT to be at least as socially acceptable as an alternative taxation policy. People think it could be both fair and effective. Set-up and running costs for PCT will undoubtedly be higher than for alternative taxation policies. However, PCT could deliver benefits from individual and social change motivated by non-economic aspects of the policy. These potential benefits are outlined here. The conclusion is that PCT is a promising and timely policy idea.

Suggested Citation

  • Fawcett, Tina, 2010. "Personal carbon trading: A policy ahead of its time?," Energy Policy, Elsevier, vol. 38(11), pages 6868-6876, November.
  • Handle: RePEc:eee:enepol:v:38:y:2010:i:11:p:6868-6876
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    Cited by:

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    3. Li, Yao & Fan, Jin & Zhao, Dingtao & Wu, Yanrui & Li, Jun, 2016. "Tiered gasoline pricing: A personal carbon trading perspective," Energy Policy, Elsevier, vol. 89(C), pages 194-201.
    4. Dogterom, Nico & Ettema, Dick & Dijst, Martin, 2018. "Behavioural effects of a tradable driving credit scheme: Results of an online stated adaptation experiment in the Netherlands," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 52-64.
    5. Burgess, Martin, 2016. "Personal carbon allowances: A revised model to alleviate distributional issues," Ecological Economics, Elsevier, vol. 130(C), pages 316-327.
    6. Balint, T. & Lamperti, F. & Mandel, A. & Napoletano, M. & Roventini, A. & Sapio, A., 2017. "Complexity and the Economics of Climate Change: A Survey and a Look Forward," Ecological Economics, Elsevier, vol. 138(C), pages 252-265.
    7. Li, Wenbo & Long, Ruyin & Chen, Hong & Yang, Tong & Geng, Jichao & Yang, Muyi, 2018. "Effects of personal carbon trading on the decision to adopt battery electric vehicles: Analysis based on a choice experiment in Jiangsu, China," Applied Energy, Elsevier, vol. 209(C), pages 478-488.
    8. Fan, Jin & Wang, Shanyong & Wu, Yanrui & Li, Jun & Zhao, Dingtao, 2015. "Buffer effect and price effect of a personal carbon trading scheme," Energy, Elsevier, vol. 82(C), pages 601-610.
    9. Balint, T. & Lamperti, F. & Mandel, A. & Napoletano, M. & Roventini, A. & Sapio, A., 2017. "Complexity and the Economics of Climate Change: A Survey and a Look Forward," Ecological Economics, Elsevier, vol. 138(C), pages 252-265.
    10. Fabio Bothner, 2021. "Personal Carbon Trading—Lost in the Policy Primeval Soup?," Sustainability, MDPI, vol. 13(8), pages 1-16, April.
    11. Howell, Rachel A., 2012. "Living with a carbon allowance: The experiences of Carbon Rationing Action Groups and implications for policy," Energy Policy, Elsevier, vol. 41(C), pages 250-258.
    12. Zuopeng Xiao & James H. Lenzer & Yanwei Chai, 2017. "Examining The Uneven Distribution Of Household Travel Carbon Emissions Within And Across Neighborhoods: The Case Of Beijing," Journal of Regional Science, Wiley Blackwell, vol. 57(3), pages 487-506, June.
    13. Tan, Xueping & Wang, Xinyu & Zaidi, Syed Haider Ali, 2019. "What drives public willingness to participate in the voluntary personal carbon-trading scheme? A case study of Guangzhou Pilot, China," Ecological Economics, Elsevier, vol. 165(C), pages 1-1.
    14. Siegmeier, Jan & Mattauch, Linus & Edenhofer, Ottmar, 2018. "Capital beats coal: How collecting the climate rent increases aggregate investment," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 366-378.
    15. Anna-Katharina Kothe & Alexander Kuptel & Roman Seidl, 2021. "Simulating Personal Carbon Trading (PCT) with an Agent-Based Model (ABM): Investigating Adaptive Reduction Rates and Path Dependence," Energies, MDPI, vol. 14(22), pages 1-15, November.
    16. Jeroen C.J.M. van den Bergh & Arild Angelsen & Andrea Baranzini & W.J. Wouter Botzen & Stefano Carattini & Stefan Drews & Tessa Dunlop & Eric Galbraith & Elisabeth Gsottbauer & Richard B. Howarth & Em, 2018. "Parallel tracks towards a global treaty on carbon pricing," Working Papers 2018/12, Institut d'Economia de Barcelona (IEB).
    17. Alberto M. Zanni & Abigail L. Bristow & Mark Wardman, 2013. "The potential behavioural effect of personal carbon trading: results from an experimental survey," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 2(2), pages 222-243, July.
    18. Starkey, Richard, 2012. "Personal carbon trading: A critical survey," Ecological Economics, Elsevier, vol. 73(C), pages 7-18.
    19. Wadud, Zia & Chintakayala, Phani Kumar, 2019. "Personal Carbon Trading: Trade-off and Complementarity Between In-home and Transport Related Emissions Reduction," Ecological Economics, Elsevier, vol. 156(C), pages 397-408.
    20. Kyle Kinler & Jeffrey Wagner, 2014. "Greenness versus safety in vehicle footprint selection," Letters in Spatial and Resource Sciences, Springer, vol. 7(1), pages 35-45, March.
    21. Fan, Jin & He, Haonan & Wu, Yanrui, 2016. "Personal carbon trading and subsidies for hybrid electric vehicles," Economic Modelling, Elsevier, vol. 59(C), pages 164-173.
    22. Joachain, Hélène & Klopfert, Frédéric, 2014. "Smarter than metering? Coupling smart meters and complementary currencies to reinforce the motivation of households for energy savings," Ecological Economics, Elsevier, vol. 105(C), pages 89-96.
    23. H. M. Abdul Aziz & Satish V. Ukkusuri & Xianyuan Zhan, 2017. "Determining the Impact of Personal Mobility Carbon Allowance Schemes in Transportation Networks," Networks and Spatial Economics, Springer, vol. 17(2), pages 505-545, June.

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