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Three years to cut carbon emissions or rationing could be needed

09 September 2009

Seventy years after wartime rationing was introduced, the Government may need to look to rationing again – this time of carbon rather than food – in the fight against climate change, warns a new report published by the Institute for Public Policy Research (ippr).

The new ippr report Plan B? The prospects for personal carbon trading  argues that a trading scheme is not the best option for reducing carbon emissions (such as those from heating and lighting our homes, from driving our cars and from taking flights on holiday) as it is relatively expensive and would be difficult to implement. But it concludes that if at the end of the UK’s first carbon budget period in 2012, carbon emissions have not reduced,  the Government will need to face up to the prospect of introducing personal carbon trading as a ‘plan B’.

Proposals for personal carbon trading aim to cut emissions by giving every person in the country a quota of free ‘carbon credits’ which would be needed to buy electricity and gas for our homes, petrol and diesel for our cars and aeroplane tickets for our holidays. Unlike food rations during the war, carbon credits would be tradable, so people with small carbon footprints could sell their spare credits while people with gas guzzlers and houses full of energy-hungry gadgets would need to buy extra credits to cover their extra emissions. Over time the quotas would shrink, in line with the need to hit emissions reduction targets.

Matthew Lockwood, Associate Director at ippr said:
“Rationing was introduced in September 1939, to help win the Second World War.  Now the Government may need to think about rationing carbon if we are to win the fight against climate change.

"Personal carbon rationing and trading should not be a first option. But the Government should start preparing a ‘plan B’ in case current policies fail to deliver. We can lay the ground work now by giving people much better information about the carbon they are emitting, whether at home or at the petrol pump.”

ippr’s study estimates that personal carbon trading would be an expensive option, costing in the region of £1.4 billion a year to administer the millions of carbon accounts that would be needed.  It is also likely to be unpopular. However, while the Government has a raft of new policies in place aimed at bringing in a new low carbon economy, past efforts to cut carbon emissions have not been very successful. If current measures don’t work, then the Government will have to consider personal carbon trading more seriously.

ippr argues that the Government could start preparing for this eventuality, for example building up people’s ‘carbon literacy’ by making  information about carbon emissions available on gas and electricity bills, at the petrol pump and on aeroplane tickets.  Government should also run a ‘know your carbon limits’ campaign along the lines of alcohol awareness advertising.

Notes to editors

1. Plan B? The prospects for personal carbon trading by Jenny Bird and Matthew Lockwood is available to journalists from the ippr press office upon request.  This research project was made possible by support from our primary sponsor, Barclays Bank, and by the Esmée Fairbairn Foundation.
   
2. ippr’s assessment of personal carbon trading looked at four aspects: its effectiveness in reducing carbon, its potential popularity among members of the public, the cost of running a scheme and whether a scheme would be fair.  The study concluded that:
   
   
   • Personal carbon trading might not be as effective at reducing emissions as has previously been claimed because governments could come under pressure to give out extra credits if people found it too hard to reduce their emissions.
   • Members of the public prefer personal carbon trading to other options to reduce emissions (like carbon taxation) but it is still not a popular option.
   • Personal carbon trading would be an expensive option compared to other ways of cutting emissions (like carbon taxation) and would cost in the region of £1.4 billion to run a year.
   • It would be possible for the government to compensate most people on low incomes who would be made worse off under a personal carbon trading scheme, through the benefits system, but there would still be a small group that would be hard to reach.
     
3. ‘National Registration Day’ for rationing cards during the Second World War took place on the 29th September 1939.
   
4. The UK has legally binding targets to reduce emissions of greenhouse gases by at least 34% by 2020 and at least 80% by 2050 (compared to 1990 levels).  The first three ‘carbon budgets’ to put the UK on the path to meeting these targets were announced by the Chancellor of the Exchequer in his Budget in April 2009.  The budgets are as follows:

5. Emissions of carbon dioxide in UK in recent years are as follows:

Calculated from Defra, DECC and DFT sources

6. The Government already has a number of policies in place that aim to reduce personal carbon dioxide emissions from individuals.  These include:

• The EU Emissions Trading Scheme – this works to reduce emissions from electricity generators so that the electricity we use in our homes has fewer associated carbon emissions.
• The introduction of Smart meters to all homes by 2020 which can give information about how much energy is being used at any one moment.  They have been shown to help families avoid wasting energy.
• The Certified Emissions Reduction Target (CERT) – this is an obligation on energy companies to reduce emissions from the households they supply.  They meet the obligation by providing measures like loft insulation or energy saving light bulbs to their customers.
• Low Carbon Buildings Programme – this is a scheme that gives grants to home owners for things like solar panels and micro wind turbines to help reduce their carbon footprint.
• Vehicle Excise Duty (road tax) banding – the aim is to encourage people to buy more fuel efficient cars by charging higher levels of VED for gas guzzlers and lower levels for smaller and more efficient cars.
• Labelling on white goods – to provide information to consumers about how energy efficient appliances like washing machines and fridges are.
• Act on CO2 – an advertising campaign and online carbon calculator to encourage members of the public to change their behaviour and reduce emissions.

Contact

Kelly O’Sullivan, 020 7470 6125 / 07753 719 289 / k.osullivan@ippr.org

Tim Finch, 020 7470 6106 / 07595 920 899 / t.fiinch@ippr.org