IDEAS home Printed from
   My bibliography  Save this article

Personal carbon trading: A policy ahead of its time?


  • Fawcett, Tina


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

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Callan, Tim & Lyons, Sean & Scott, Susan & Tol, Richard S.J. & Verde, Stefano, 2009. "The distributional implications of a carbon tax in Ireland," Energy Policy, Elsevier, vol. 37(2), pages 407-412, February.
    2. Niemeier, D. & Gould, Gregory & Karner, Alex & Hixson, Mark & Bachmann, Brooke & Okma, Carrie & Lang, Ziv & Heres Del Valle, David, 2008. "Rethinking downstream regulation: California's opportunity to engage households in reducing greenhouse gases," Energy Policy, Elsevier, vol. 36(9), pages 3436-3447, September.
    3. Burgess, Jacquelin & Nye, Michael, 2008. "Re-materialising energy use through transparent monitoring systems," Energy Policy, Elsevier, vol. 36(12), pages 4454-4459, December.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Leonardo Becchetti & Massimo Cermelli, 2018. "Civil economy: definition and strategies for sustainable well-living," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 65(3), pages 329-357, September.
    2. An, Kangxin & Zhang, Shihui & Huang, Hai & Liu, Yuan & Cai, Wenjia & Wang, Can, 2021. "Socioeconomic impacts of household participation in emission trading scheme: A Computable General Equilibrium-based case study," Applied Energy, Elsevier, vol. 288(C).
    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bhardwaj, Chandan & Axsen, Jonn & Kern, Florian & McCollum, David, 2020. "Why have multiple climate policies for light-duty vehicles? Policy mix rationales, interactions and research gaps," Transportation Research Part A: Policy and Practice, Elsevier, vol. 135(C), pages 309-326.
    2. Labandeira, Xavier & Labeaga, José M. & Rodríguez, Miguel, 2009. "An integrated economic and distributional analysis of energy policies," Energy Policy, Elsevier, vol. 37(12), pages 5776-5786, December.
    3. Hege Westskog & Tanja Winther & Hanne Sæle, 2015. "The Effects of In-Home Displays—Revisiting the Context," Sustainability, MDPI, vol. 7(5), pages 1-21, May.
    4. Peter Grösche & Carsten Schröder, 2014. "On the redistributive effects of Germany’s feed-in tariff," Empirical Economics, Springer, vol. 46(4), pages 1339-1383, June.
    5. McNamara, David & Caulfield, Brian, 2011. "Measuring the potential implications of introducing a cap and share scheme in Ireland to reduce green house gas emissions," Transport Policy, Elsevier, vol. 18(4), pages 579-586, August.
    6. Benedict Belobo Ateba & Johannes Jurgens Prinsloo, 2018. "The Electricity Security in South Africa: Analysing Significant Determinants to the Grid Reliability," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 70-79.
    7. Venmans, Frank, 2012. "A literature-based multi-criteria evaluation of the EU ETS," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(8), pages 5493-5510.
    8. Robert W. Hahn & Robert D. Metcalfe, 2021. "Efficiency and Equity Impacts of Energy Subsidies," American Economic Review, American Economic Association, vol. 111(5), pages 1658-1688, May.
    9. Chen, Anping & Groenewold, Nicolaas, 2015. "Emission reduction policy: A regional economic analysis for China," Economic Modelling, Elsevier, vol. 51(C), pages 136-152.
    10. Soria-Lara, Julio A. & Banister, David, 2017. "Dynamic participation processes for policy packaging in transport backcasting studies," Transport Policy, Elsevier, vol. 58(C), pages 19-30.
    11. Aubert, Diane & Chiroleu-Assouline, Mireille, 2019. "Environmental tax reform and income distribution with imperfect heterogeneous labour markets," European Economic Review, Elsevier, vol. 116(C), pages 60-82.
    12. Rausch, Sebastian & Schwarz, Giacomo A., 2016. "Household heterogeneity, aggregation, and the distributional impacts of environmental taxes," Journal of Public Economics, Elsevier, vol. 138(C), pages 43-57.
    13. Martin Beznoska & Johanna Cludius & Viktor Steiner, 2012. "The Incidence of the European Union Emissions Trading System and the Role of Revenue Recycling: Empirical Evidence from Combined Industry- and Household-Level Data," Discussion Papers of DIW Berlin 1227, DIW Berlin, German Institute for Economic Research.
    14. Büchs, Milena & Bahaj, AbuBakr S. & Blunden, Luke & Bourikas, Leonidas & Falkingham, Jane & James, Patrick & Kamanda, Mamusu & Wu, Yue, 2018. "Promoting low carbon behaviours through personalised information? Long-term evaluation of a carbon calculator interview," Energy Policy, Elsevier, vol. 120(C), pages 284-293.
    15. Bourgeois, Cyril & Giraudet, Louis-Gaëtan & Quirion, Philippe, 2021. "Lump-sum vs. energy-efficiency subsidy recycling of carbon tax revenue in the residential sector: A French assessment," Ecological Economics, Elsevier, vol. 184(C).
    16. Pereira, Alfredo & Pereira, Rui, 2017. "The Role of Electricity for the Decarbonization of the Portuguese Economy - DGEP Technical Report," MPRA Paper 84782, University Library of Munich, Germany.
    17. Anan Wattanakuljarus, 2021. "Diverse effects of fossil fuel subsidy reform on industrial competitiveness in Thailand," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 489-517, September.
    18. Tchoffo, Rodrigue & Nkemgha, Guivis & Paul, Tadzong, 2019. "Anglophone Crisis in Cameroon: Can indirect tax play a crucial role?," MPRA Paper 96457, University Library of Munich, Germany, revised 10 Oct 2019.
    19. Campagnolo, Lorenza & Davide, Marinella, 2019. "Can the Paris deal boost SDGs achievement? An assessment of climate mitigation co-benefits or side-effects on poverty and inequality," World Development, Elsevier, vol. 122(C), pages 96-109.
    20. Carolina Grottera & Franck Nadaud & Carine Barbier & Emmanuel Combet, 2016. "Scale gains in household consumption and their modeling implications in poverty and distribution analyses," Post-Print hal-01694022, HAL.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:11:p:6868-6876. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.