A Great Idea: Carbon Trading for the People

by Rona Fried

Over the course of the past 20 years, the great mystery has been how to get individuals involved and committed to reducing their environmental footprint. Hundreds of websites, countless articles, reports, and books explain the problems, the solutions and the easy things we can – and must – do to become part of the web of life, rather than its enemy. Yet, individuals remain superficially informed and unconvinced that we are truly facing an emergency.

The Union of Concerned Scientists says the average American produces about 20 tons of carbon dioxide per year, about four times the rest of the world. 30-40% of total greenhouse emissions comes from homes and transportation. Therefore collective action on the part of individuals is essential in diverting disaster.

We recently posted an article, How to Create Change, which pointed to the power of positive feedback and peer influence. RecycleBank is benefiting from using this simple psychology and significantly ramping up recycing rates in towns across America by rewarding people the more they recycle.

Individuals often feel what they do doesn’t have much impact, so why bother? We have to give people back the power – they have to know their actions make a difference. They need to understand that when they choose to buy toxic products at the supermarket, or walk out the door with groceries stuffed in 20 plastic bags, or when they buy an SUV, that they become the problem.

Enter Personal Carbon Trading

Why not apply the same rules to people as we do to corporations and nations? What if we set a country-wide cap on total emissions and gave 40% of it to individuals? Like a co-op, every citizen would receive the same carbon allowance (another problem of illegal immigration). The total cap would be lowered every year to continue reducing emissions.

Each person would have a personal carbon account that works off credit and debit card technology. When you buy gas or pay utility bills, units would be deducted. You would then have clear choices to make – whether to use your shares up quickly by driving to the local store in an SUV or whether to use much less of them by riding a bike. You would weigh how often you fly and how far you would go. You might have to turn down your air conditioner to save up for a far-flung vacation.

People would quickly understand the impact of their everyday decisions, and before long, calculating carbon would be second nature.

It could even become an income stream – thrifty carbon users could sell their shares on the open market! They’d likely be selling to wealthy over-consumers who need extra share – the people that fly private jets and live in McMansions.

British policy analyst David Fleming, director of a UK research center, Lean Economy Connection, devised this idea in 1996. In 2006, the British government commissioned a study to explore its feasibility.

Fleming’s idea is that carbon trading should be applied to nations, corporations, and individuals. An independent committee would set a cap for a country’s total emissions. Individuals would all receive the same shares free of charge, but businesses and government would have to pay for their shares. The cap would be reduced each year.

Although a carbon tax would be simpler, it is difficult to pass politically. The concept of personal carbon trading might indeed be the secret sauce as the way for individuals to gain a deeply personal sense of rights and responsibilities.

This method would lead people quickly toward energy efficient appliances and renewable energy as the most efficacious way to use the least energy and save up credits. It would spur the innovation we are all desperate for.

Ireland’s Idea

Ireland is seriously considering a similar plan, which could be enacted as soon as December. Under the "cap and share" proposal, an independent trust would set a cap for gasoline and diesel consumption. The total allowable tons of CO2 would be divided equally among the adult population, giving each person one share. Companies that want to import fuel into Ireland would need shares to sell it there.

Many people would end up selling shares to companies, and brokers would spring up to help them. The ability to sell shares would compensate for the inevitable increase in gas prices.

Skeptics criticize the concept of personal carbon trading as "big brother" and an administrative nightmare, and would surely be difficult to get implemented in the U.S. But if the UK implements it and the perceived threat of global warming intensifies, it will have a better chance. The public has actually supported the idea in surveys conducted in the UK, where people know "something has to happen."

We pay to have our garbarge dumped in landfills, why not pay to have it dumped into the atmosphere?

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Rona Fried, Ph.D. is President of SustainableBusiness.com

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