Personal carbon trading: is now the right time?

Abstract

Personal carbon trading (PCT) aims to reduce carbon emissions from household energy use and/or personal transport by allocating to individuals equal, tradable allowances, which will reduce over time. This article summarizes the latest research into PCT and shows how it is being explored further via academic research, business and community initiatives. PCT had a moment in the UK political and policy limelight in 2007/2008. Data are presented, showing how media interest has waxed and waned over the years. During the same period, research interest has persisted and grown, despite the idea’s decline in public prominence. A comparison between relevant factors in 2006/2007, when the UK government was first interested in PCT, and 2011, indicates significant changes. The future prospects for PCT are assessed, together with ideas about how it could be seriously considered for implementation. Finally, there are reflections on whether now is the right time for PCT.

Figure 1.  Number of stories about personal carbon trading in UK broadsheet newspapers, 2004–2011 (to 17 November 2011).

Data from author’s analysis of LexisNexis database [108].

Figure 2.  Number of academic journal articles published about personal carbon trading, 2004–2011 (to 17 November 2011).

Data from author’s analysis of ‘SciVerse’ database [109], supplemented by a small number of additional papers identified through use of a general search engine, Google Scholar, using the search terms ‘personal carbon trading’ and synonyms [110].

Global carbon emissions are increasing rapidly and there is concern this trend will continue, with serious consequences. In 2010, global carbon emissions rose by 5.9% from 2009, taking the total to over 9 billion metric tonnes per annum for the first time [1]. The IEA, in its World Energy Outlook 2010, suggested that a “far-reaching transformation of the global energy system” would be necessary for global emissions cuts sufficient to remain within the 2°C temperature target thought necessary to avoid dangerous climate change. They warned that without a bold change of policy direction, the world will lock itself into an insecure, inefficient and high-carbon energy system [2]. Given this background, more effective policy ideas and actions to start reducing global and national carbon emissions are urgently needed.

One idea, which aims to provide sustained reductions in national energy-related carbon emissions, in an effective and equitable way, is personal carbon trading (PCT). A number of different policy proposals fit under the general description of PCT; however, the main features of most PCT schemes are as follows:

	▪ Personal transport and household energy use included;
	▪ Equal allowances for all adults;
	▪ Tradable allowances;
	▪ Year-on-year reduction of the annual allowance, signaled well in advance;
	▪ A mandatory (not voluntary) arrangement.

By including all personal transport and air travel, as well as household energy, PCT would cover 42% of the carbon emissions from energy use in the UK [3].

The two most well-developed PCT policy proposals are personal carbon allowances and tradable energy quotas (previously known as ‘domestic tradable quotas’). The major difference between personal carbon allowances and tradable energy quotas is that the first scheme covers household energy use and private travel, including air travel, whereas the second is an economy-wide scheme, which also includes emissions from the industrial and commercial sectors that are allocated via an auction [4,5]. From the householders’ point of view, however, the schemes are very similar; the only significant difference being that personal carbon allowances would include air travel in the personal allocation, and tradable energy quotas would not. For a more detailed description of these and other PCT proposals see Fawcett and Parag [6].

PCT would affect all transactions involving direct purchase of energy. Every time a person paid an energy bill, filled up the car with fuel or bought a flight (in the case of personal carbon allowances), they would have to surrender carbon units from their account or pay the additional cost of buying carbon units at the market price. By allowing trading, people who live low-carbon lives, invest in household efficiency and renewable energy, travel less and lead lives with a lower energy input, would have a surplus to sell. Those who travel a lot or live in large or inefficient homes would need to buy this surplus to permit them to continue with their accustomed lifestyle. A market price for carbon would emerge and higher carbon lifestyles would cost more than they currently do. The equal shares would not require that everyone emits equally – instead people would have choice and could adapt to a lower carbon society at a slower pace by buying additional allowances.

PCT is far from being the only radical idea around. There are many other proposed solutions that seem more revolutionary than evolutionary. Prominent among these are technological proposals, the most radical of which involve geoengineering – defined as the deliberate large-scale manipulation of the planetary environment to counteract anthropogenic climate change [7]. Other technologically ambitious visions include large-scale deployment of CCS at power stations, allied with rapid expansion of nuclear and/or renewable energy, to lead to a low-carbon electric future [8]. There are alternative future visions based on economic/political analyses that critique current systems and propose alternatives [9]. PCT is not economically or technologically radical, it is radical only in proposing a specific social and political settlement for sharing responsibility to reduce personal carbon emissions. Ideas that are radical in social and political dimensions require investigation as much as technologically and economically radical proposals, because energy use and subsequent carbon emissions are a result of the interplay of all these aspects of human life.

The urgent need for increased action to reduce carbon emissions from developed countries is unarguable. PCT has the potential to tackle a significant proportion of emissions in these countries. The question is, is now the right time for introducing PCT? This article will focus on answering this question for the UK, because this is the country that has had most policy interest in PCT, and where most research has taken place (a review of international evidence and the salience of PCT in different national contexts is presented elsewhere [10]). In order to answer this question, data on UK carbon emissions are presented, followed by the history of PCT, an assessment of the current status of PCT including the latest research, and concluding with a discussion on whether now is the right time for PCT.

Is new policy needed to reduce carbon emissions?

As mentioned in the introduction, global carbon emissions are increasing. But what is happening in the UK, in particular to emissions from those sectors that would be covered by PCT?

The UK has a legally binding target of an 80% reduction in national GHG emissions by 2050, and a reduction of 26% of CO₂ by 2020, compared with a 1990 baseline (Climate Change Act 2008). UK carbon emissions have been declining gradually over the past 20 years. Emissions in 2010 were 17% lower than in 1990 (based on preliminary figures for 2010 [11]). A significant part of this decline has come recently, with a particularly sharp drop in emissions during 2009 (driven by a 15% reduction in emissions from the business sector, clearly related to the economic downturn) followed by a small rise in 2010. Looking in more detail at the residential and transport sectors, these accounted for 30 and 29%, respectively, of national emissions in 2009. Residential emissions, including emissions from electricity used in homes, have fallen by 11% between 1990 and 2009, while transport emissions, including private, business and freight transport, are the same in both years [11]. Therefore, carbon reductions in these sectors are, respectively, lower than the national average or nonexistent. Clearly, more effective action is needed for these sectors to ensure they make their contribution towards the UK national targets.

The carbon figures in the previous paragraph do not include emissions from international aviation or shipping, or from embodied carbon in imported goods, both of which are increasing in significance. Figures for the carbon and GHG emissions from international aviation are less certain than for surface travel, as allocations of national responsibility and other definitions are disputed. However, it is estimated that international air travel contributed 6% towards UK carbon emissions and 11% towards UK GHG emissions in 2008 [12]. These emissions would be covered by a personal carbon allowances scheme – although whether the non-CO₂ GHGs from aviation could or should be included is uncertain.

The UK, like many developed economies, is a significant net importer of emissions embodied in trade. UK consumption emissions in 2004 were estimated to be 34% higher than production emissions [13]. This is a significant increase from 1992 when the UK imported an additional 7% emissions (net) embodied in trade. By 2025, net UK imports of emissions (embodied in goods) are projected to continue to grow to 73–96% of production emissions (the way that national emissions are currently measured). This could result in the UK potentially importing as much carbon, in embodied form, as it produces at home, from energy use, in just over a decade. At present, embodied carbon emissions are not included within national or international carbon reduction targets – these targets are being developed on a ‘production’ basis. However, there have been calls to switch emissions accounting to a ‘consumption’ basis [101] and GHG accounting protocols may change in the future. This would not directly affect PCT as currently conceived, but is an important perspective on sources of carbon emissions.

History of PCT in the UK

PCT has attracted political interest in the UK in recent years. Most significantly, it was highlighted as a promising idea by the then Secretary of State for the Environment, David Miliband, in 2006/2007, in the context of all parts of society needing to make a contribution to reducing carbon emissions: “Individuals can play an important part, too, and that is why I have led the debate about personal carbon allowances and so-called carbon credit cards, which could help individuals to see how they can make a contribution that will help the environment and themselves”[14].

Miliband’s promotion of the idea led to a program of research work being commissioned by the Department for Environment, Food and Rural Affairs (Defra). In 2008, both Defra and an influential committee of members of parliament published reports regarding PCT. In its synthesis report, based on the research it had commissioned, Defra concluded that PCT was ahead of its time [15]. Their key concerns were public acceptability and costs, with doubts regarding whether these issues could be resolved satisfactorily. Defra concluded that the government should remain engaged in the debate around PCT, but that further work should be taken forward by academics and research organizations and not the government itself. However, the House of Commons Environmental Audit Committee, which published its report a month later, was more supportive of PCT, and ‘regretted’ Defra’s decision to wind down further research work on PCT [16]. Their inquiry concluded that PCT could be ‘essential’ in helping to reduce national carbon emissions, and that further research was urgently required. Despite the Committee’s support, PCT has gone down the political agenda.

Data on UK newspaper coverage illustrates how the idea’s public profile has risen and then fallen between 2004 and 2011 (including articles published up until 17 November 2011), with 2007 being the high point for reporting (Figure 1). Before 2004, PCT was not mentioned. A wide range of synonyms for PCT were used as search terms, and all articles were checked to ensure they were of relevance.

Looking at how PCT was reported in 2007 (the year of most newspaper reporting) in more detail, several stories appeared in all of the UK broadsheet daily papers (i.e., Financial Times, The Daily Telegraph, The Guardian, The Independent and The Times), with the largest number of stories appearing in The Daily Telegraph, followed by The Times. Stories were located in various sections of the papers including news, features, business, comment, editorial and motoring. Many of the stories were linked to Miliband’s promotion of the idea, with others reporting the publication of reports by academics and think tanks, or including PCT in a general article about environmental issues. The vast majority of reporting was factual or balanced, offering either no opinion on the idea or views both for and against. There was a smaller number of both negative and positive opinion pieces on PCT, with, for example, The Times running three negative and two positive pieces during 2007.

While there are general trends in reporting of climate change-related stories [17], which may influence the salience of PCT stories to newspaper editors, Figure 1 nonetheless seems to well represent the rise and fall of political interest in PCT.

Current status of PCT

▪ Summary of academic research

The academic research landscape up to mid-2010 has been summarized previously [18]. Research topics included whether PCT would be equitable, the technology needed to introduce it, costs and integrating with existing policy. Briefly, evidence showed that PCT would be more equitable than simple carbon taxation, with lower income groups having lower carbon emissions than higher income groups and, therefore, having ‘spare’ allowances available to sell. However, there would be a minority of higher carbon emitting low-income households, and they would be worse off under PCT, which is of concern. The technology needed to introduce a PCT scheme is already available. Costs are disputed; for example, research from a think tank suggested costs could be half of those identified in an earlier study for government [19]. However, it is clear that costs would be considerably higher than for carbon taxation, consisting of an initial set-up cost as well as annual running costs. PCT would overlap with some existing energy and carbon policies – whether this is particularly problematic in a policy area that already includes many policy tools is a matter for debate. The topic that had attracted most research interest was the public acceptability of PCT, with seven studies being reported (joined by a further two since that time [20,21]). The research on social acceptability, using a wide range of methods, indicated that when PCT is compared with carbon taxation (or other policies) it is usually preferred. For those who prefer PCT, its key benefits are seen as fairness and effectiveness; for those against, their main concerns are about implementation and unfairness. Some of the research on PCT since mid-2010 has focused on issues of ethics, governance and historical experience [22–24], looking at PCT in a broader context and using different disciplinary perspectives. Detailed examination of the policy using empirical data has also continued [25], along with analysis grounded in philosophy and economics [26,27].

In contrast to declining media interest, academic interest in PCT is far from over. The academic database ‘Sciverse’ was used in November 2011 to search for ‘personal carbon trading’ and synonyms, in order to identify relevant papers published in academic journals. These searches identified 35 academic articles in total from 2004 to 2011, of which 27 were published in 2010 and 2011 (Figure 2). The articles were published in a range of social science, geographical, energy, transport, medical and environmental journals, the majority by authors based in the UK. Journal articles are just one type of academic output, and one which tends to appear late in the research process, given the time it takes to progress through peer review and publishing. There have been many more working papers, conference articles, research reports, book chapters and other publications about PCT during the same period. While, to the author’s knowledge, there are no significant research programs into PCT underway in the UK at present, individual researchers are continuing to investigate and critically reflect on this idea. This may diminish in future, in the absence of research funding.

It is clear that before PCT can be fully assessed, a great deal more research and evidence is required. PCT is still a concept, rather than a wholly worked out policy. Among the many design issues are: how to set and enforce the boundaries between personal and nonpersonal allowances; how to include children; whether allowances should be absolutely equal or vary and, if they should vary, on what grounds; managing international travel; and how to include visitors to the UK. Various elements of these design issues have been discussed in more detail by a number of researchers [26,28]. PCT’s costs and benefits, effectiveness, effects on equity, social and political acceptability will depend on detailed policy design. Therefore, a full exploration of policy details, with various options, will be necessary before its potential effects can be systematically assessed. Such detailed research on PCT is not currently being undertaken. However, research is underway on one of the vital building blocks needed for a better assessment of the distributional effects of PCT – the distribution of personal carbon emissions by income and other socioeconomic characteristics [29]. On completion, this research should allow much better analysis of the likely distributional impacts of PCT (which would vary with the detailed policy design) and identification of ‘winners’ and ‘losers’.

▪ Ongoing exploration in academic, business & community initiatives

A trial of PCT should provide good empirical evidence of the kind that is currently lacking. Unfortunately, PCT is a difficult idea to trial. A trial that closely mimicked ‘real’ PCT would involve mandatory enrolment in a scheme that would have real financial consequences for individuals. Each adult would need a carbon account and a system for buying or selling carbon allowances would be required. Businesses selling energy or travel services would have to be involved, and energy and travel services would need a carbon ‘price’. A research report suggested that the minimum cost for a research trial would be GB£500,000 [30]. No such trial or pilot study has taken place in the UK; however, aspects of PCT are being, and have been, trialed in community, research and private sector initiatives, in the UK and beyond. Three examples are described in the following paragraphs.

A number of community groups have experimented with various forms of PCT, under the heading of carbon rationing action groups (CRAGs). A CRAG is a group of people who have decided to act together to reduce their individual and collective carbon footprints. They do this in annual cycle. The general model is that first they set themselves an annual emissions target or ‘carbon ration’. They then keep track of their emissions over the year by recording their household energy use, private car and plane travel. Finally, at the end of the year, they take responsibility for any ‘carbon debt’ (i.e., emissions over and above their ration) that they have built up. All carbon debts are paid into the group’s ‘carbon fund’ at an agreed rate per kilo of CO₂ debt. The fund is then distributed as agreed by the members of the group. However, some groups do not have a fixed ration and many do not have a financial penalty for over-achievers [31]. At its most active, there have been tens of UK-based CRAGs and a handful elsewhere in the world involved in the CRAG website [102]. Currently, these groups are less numerous and active than was the case in earlier years. This may be linked to the strong rise in low-carbon community groups [32] – providing more ‘competition’ for members than when CRAGs first formed. In addition, the CRAG organizational structure of very small, independently operating, self-learning (rather than outward-focused) groups makes growth, and even maintenance, difficult. Based on personal experience, after 2 or 3 years membership in a CRAG most members feel they have learnt what they can, and the CRAG may close. No doubt the decline in wider societal interest in PCT has also influenced the CRAG movement. A study of the opinions and experiences of individuals involved in CRAGs reported that interviewees made significant behavioral changes and emissions reductions as a result of membership [31]. However, the author urged caution in applying these findings from small, self-selecting groups to the wider population.

Researchers in Australia are beginning work on a PCT-related trial, Norfolk Island Carbon/Health Evaluation. Norfolk Island is a self-governing protectorate 1600 km off the east coast of Australia with a resident population of 1750 people. One of the researchers behind the trial has explored the potential link between reducing carbon emissions and improving health [33], and this link is also being tested in the trial. The project is in its early stages, with research design still evolving. Its goals are to assess if a PCT system would have community support, would reduce carbon emissions and improve health, and how it may work best and be most acceptable to any population in which it is used [103,104].

In 2008 WSP, an international engineering and environmental consultancy company, launched a personal carbon allowance tracking scheme [105]. It began with WSP’s own staff, but is now a service sold to other organizations as well. When companies have signed up for the program, staff can then opt to take part in it. Members receive a ‘carbon allowance’ relevant for their region. Members track their carbon emissions from home energy and personal travel each quarter. Data are entered into a web-based tool. At the end of the year, if staff are under their allowance they receive a reward. Those over the allowance pay into the pot (although there is some flexibility around this aspect of the scheme [Symons D, Pers. Comm.]. WSP help staff reduce their emissions over the year through regular newsletters and a small ‘affinity’ scheme to promote green products. WSP report that most staff typically reduce their emissions by 10% in the first year. The scheme has approximately 1600 members, based in eight countries.

There is also increasing action on reducing carbon emissions at the community level. A report by the Low Carbon Communities Network identified over 600 such groups in the UK in 2011, an increase of more than 100 since their survey the previous year [32]. While few of these groups are engaged with PCT as an idea, many are working on reducing personal and community carbon emissions on a voluntary basis, and are likely to provide lessons for PCT and other carbon reduction policies.

Is now the right time?

Before reflecting on whether now is the right time for PCT, it is worth looking at why PCT was rejected by politicians and policymakers just a few years earlier. Table 1 lists some of the PCT-related factors in both 2006/2007 and 2011.

As explained earlier, based on its interpretation of commissioned research reports, the UK government ceased taking an active interest in PCT early in 2008. The political momentum behind PCT, such as it was, dissipated rather quickly once that decision was taken. As Table 1 shows, there was little support for the idea from either the business or NGO communities and very little in the way of an independent knowledge base (using academic journal articles as an indicator). The small research base meant there was neither sufficient evidence nor expertise to counter the government’s view of PCT, and neither were there many people, outside of the limited research community, interested in keeping the idea of PCT under active policy consideration. PCT probably got high-profile political attention too early in its development, before there was enough evidence to understand fully its pros and cons. As a radical idea, it may have been better for PCT to spend its early years in political obscurity, while being developed, critiqued and improved by researchers and other stakeholders.

Neither of the two most significant environmental British NGOs, Friends of the Earth (FoE) and Greenpeace, have been very active in the debate around PCT. In 2006, when Miliband was promoting the idea, a spokesman for FoE gave the idea a cautious welcome but was concerned about implementation issues and the length of time it could take to introduce the policy [106]. Two years later, FoE took a similar view, suggesting that “personal carbon allowances could have a role to play in tackling climate change”, but being concerned that the idea should not distract attention from the need to act urgently [34]. Both organizations have sponsored research that proposed the introduction of PCT within wider housing and energy policy recommendations [35,36], but have not (as yet) used that message in their campaigning. As Parag and Eyre wrote, “PCT is a radical and innovative policy with no experience or evidence base, and therefore is surrounded by debate, uncertainty and doubt”[37]. For campaigning organizations, with limited resources, these characteristics do not make PCT an easy or attractive issue to promote.

The situation in 2011 is different from that in 2006/2007 in some important respects. There is a considerably bigger research base, there is more community activity related to reducing personal carbon emissions (although not necessarily linked to PCT as an idea), there is some private sector activity exploring the idea and a research trial is beginning in Australia. On the other hand, there is much less political interest in the idea than previously, and still no NGO interest or support. In addition, CO₂ concentrations in the atmosphere have continued to rise.

What might it take for PCT to be introduced? The following list suggests a number of developments that might increase interest in PCT:

	▪ Failure to meet the UK GHG reduction targets;
	▪ Political leaders needing new ideas;
	▪ Influential NGO taking up the idea (or developing their own version of the idea);
	▪ Powerful stakeholders supporting the idea (e.g., energy companies and low-carbon businesses);
	▪ Idea tried out in another country and shown to succeed;
	▪ Voluntary versions of PCT tried (e.g., developing an individual ‘recommended annual allowance’ based on a per capita share of national emissions targets [31]);
	▪ A much more carbon-literate society, with access to timely and relevant information about the carbon impacts of their choices and lifestyles via, for example, smart meters and energy bills;
	▪ A fully developed PCT policy, with evidence on equity/efficiency/cost/acceptability.

For PCT to be seriously reconsidered as a policy, it will probably take a combination of good quality evidence about its potential benefits, a wide support base including community groups, NGOs and business, and a government that is prepared to implement new ideas to effectively reduce carbon emissions.

One of the early reports on PCT included a ‘roadmap’ for a 5-year research and implementation program for PCT [38] and this is probably still the most detailed vision of how PCT might be introduced. Since that time, strategies for enabling PCT to be seriously considered in the policy arena, despite its radical and therefore high-risk nature, have been proposed [37] and research requirements have been elaborated [18,30]. These recommendations are still relevant, and would be a good starting point when/if there is renewed policy interest in PCT.

Conclusion

PCT is a powerful idea that is attracting ongoing interest in the academic world. There are also a number of real-world experiments underway on aspects of PCT, and other related research, which should facilitate a better understanding of the merits of this idea. Although knowledge is increasing, it would be wrong to state that now is the right time for the UK government to introduce PCT. At present, there is neither a detailed policy design nor sufficient research to indicate that PCT is likely to be an effective, efficient and equitable policy. However, now is the right time to gather that evidence, so that PCT can be fully explored and tested. Such research would also answer many questions about options for significantly reducing emissions from the residential energy use and personal travel sectors.

The UK government gave a negative verdict on PCT very early in its development, which reduced policy interest in the idea. This verdict has since been challenged as more evidence has become available. The UK needs additional, effective policies if it is to reach its carbon reduction targets. Globally, there is an even greater need for action. A variety of new and radical ideas, including PCT, require development support, if the successful policies for the future are to be created.

Future perspective

Ideally, a significant, multidisciplinary 5-year research program would commence now, which would investigate all the issues and questions about PCT (and alternative policies such as carbon taxation) raised in this paper and by other authors [38]. At the end of that period, it should be clear what the design options are for a PCT policy, its likely costs and benefits, who would ‘lose’ and who would ‘gain’, and how its equity, effectiveness and cost compared with alternative policies. Assuming the conclusion was that PCT would be a worthwhile policy, it might not gain social or political support for introduction at that time, but without such detailed scrutiny, PCT cannot make significant progress beyond the ‘interesting idea’ stage.

In the near future, there seems little likelihood of increased UK government interest in PCT. The Chancellor (Finance Minister) of the current government, which started out aiming to be the ‘greenest government ever’ [39], recently gave a speech positioning environmental laws and regulations as problematic [107]. However, based on earlier experience, a lack of top-level political interest at this stage may be no bad thing. If PCT is to develop, and to have legitimacy, it needs to attract broad-based interest from a variety of stakeholders, in addition to high-quality research. For that to come about, a strong network of interested actors is needed, research must be disseminated beyond the academic community, findings from community and business experiments with PCT must be integrated into mainstream knowledge, and important stakeholders, such as low-carbon businesses and environmental NGOs, must be encouraged to participate in the debate and shape the direction of PCT research and development.

Table 1.  Snapshot of personal carbon trading-related factors in 2006/2007 and 2011.

Factor	2006/2007	2011
UK political interest	Secretary of State for Environment promoting the idea and government commissions research	No interest by major political parties, but is Green Party policy (the Green Party have one MP)
UK community involvement	Growing carbon reduction action groups network	Smaller and less active carbon reduction action groups network. Over 600 local climate change and low carbon futures groups [32]
Private sector	None	WSP personal carbon allowance tracking scheme Potential private sector involvement in Norfolk Island Carbon/Health Evaluation project
Environmental NGOs	Little support or interest	Little support or interest
Research in UK	Research underway in a small number of universities and think tanks	No significant UK research funding
Research outside UK	Very little, if any	Norfolk Island Carbon/Health Evaluation pilot study in Australia
Knowledge base	Three journal articles	35 journal articles
CO2 concentration level in atmosphere (ppm) [40]	381.9 (2006)	389.8 (2010)

Personal carbon trading

Umbrella term that covers a variety of policy ideas whose aim is to deliver reductions in carbon emissions equitably, effectively and efficiently by giving individuals responsibility for managing their energy-related carbon emissions. It can be described as downstream carbon trading.

Personal carbon allowances

Scheme designed to manage and reduce carbon emissions from energy use in households and for personal travel, including air travel. Individuals would be given equal, free allowances, which are tradable and reduce year-on-year in line with national emissions reduction targets.

Tradable energy quotas

Scheme designed to manage and reduce all energy-related carbon emissions in an economy. Individuals would get free tradeable quotas to cover average household and surface travel-related energy use, while organizations would pay for the tradeable energy quotas they need via an auction.

Carbon rationing action group

Also known as a carbon reduction action group. Voluntary, self-organizing, learning group of individuals who monitor and report their carbon emissions from household and transport energy use. They generally set an annual target that members strive to stay within. Higher emissions may attract a financial penalty.

Personal carbon allowance tracking

Commercial scheme used in a number of organizations, developed by WSP. It enables individuals to voluntarily track their annual personal energy-related carbon emissions. Annual targets are set, advice is provided, and members may be eligible for rewards/penalties depending on the rules agreed.

Executive summary

Personal carbon trading

	▪ Personal carbon trading (PCT) is a policy idea that aims to reduce carbon emissions from household energy use and/or personal transport by allocating equal, tradable allowances to individuals, which will reduce over time.
	▪ It was investigated by the UK government, but in 2008 they decided not to pursue any further interest. However, subsequent research has shown the government’s concerns about the public acceptability of PCT are not supported by the evidence and that its costs may be considerably less than feared.

Current status of PCT

	▪ There is currently little political support for the idea in the UK.
	▪ Research interest in the idea continues to grow, with increasing number of academic articles published. However, a lack of significant research funding threatens future progress.
	▪ PCT is being ‘trialed’ in the real world by community groups and business, and a research trial has begun in Australia.

Conclusion

	▪ Despite its promise, there is not yet sufficient evidence to show that PCT could be an efficient, effective and equitable policy. Neither is there a fully worked-out PCT ready to introduce if politicians wished to do so.
	▪ Now is not the right time to introduce PCT, but it is the right time to subject it to rigorous scrutiny. A substantial multidisciplinary research program with a commitment to stakeholder engagement is required to thoroughly develop and test PCT.

Acknowledgements

The author thanks the anonymous reviewers whose comments helped improve this article.

Financial & competing interests disclosure

The research reported in this article was conducted under the auspices of the UK Energy Research Centre, which is funded by the Natural Environment Research Council, the Engineering and Physical Sciences Council and the Economic and Social Research Council. Any views expressed are those of the author alone and do not necessarily represent the view of UK Energy Research Centre or the Research Councils. The author is grateful to the Research Councils for their support. The author has no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed.

No writing assistance was utilized in the production of this manuscript.