Tuesday 25 January 2011

Energy Quotas

I posted a while ago on the idea of personal carbon quotas.  As far as I’m aware, only one party in the UK (The Green Party) formally supports the concept as policy.  The idea is, though, slowly gaining ground, and if we wanted to have a ‘big idea’ underpinning the future development of Wales, it wouldn’t be a bad place to start.  It would certainly be a great deal more ‘transformational’ than many of the ideas being sold as such at present, most of which seem to be more managerial than transformational.
A week or so ago, an All-Party group of MPs produced a report recommending a move to TEQs (Tradable Energy Quotas), which is a slightly narrower version of the same idea.  (The full report is available here.)  It suggests that the idea is gaining some traction, although ‘all-party’ groups are not the same thing as formal committees of the House.  (And in this case, as the membership shows, support from the main governing party is a little thin, to say the least.)
It’s encouraging, nevertheless, that such a radical idea is being supported by MPs from more than one party.  One of the attractions to me (apart from the impact on carbon emissions) is that it is potentially a highly redistributive policy.  By allocating the same allowance to all, reducing that allowance over a period as we move towards a sustainable level, and allowing a market in the quotas, the inevitable result would be that those whose lifestyle is more carbon-costly than others (let us call them the rich, although that is a slight oversimplification) would have to buy additional quotas.
That would, in itself, represent a transfer of money from the most well-off to the least well-off.  The report argues that it is in the interest of all to keep quota prices low, and that that should be the outcome of such a scheme.  I’d tend to agree with the first, but admit to a degree of scepticism about the second.  It will be true if, and only to the extent that, the introduction of such a scheme rapidly encourages a change in behaviour in relation to energy usage.
If it does not have that effect in its early stages, then (especially given reductions in the total quotas) the quota price is likely to rise (which will actually reinforce the overall redistributive effect).  Eventually, the effect would be to force behavioural change as the most carbon-intensive lifestyles became prohibitively expensive – a properly-run scheme would allow no escape from the overall national energy (or carbon) budget.
Could Wales – should Wales – attempt to go it alone on this? 
On the first part, I’ll admit that I don’t know for certain whether the Assembly will have all the necessary powers, even after a yes vote; but I very much doubt it.  It could, though, be a significant and coherent focus for a future transfer of powers, if the Welsh Government were to support the concept.
As to the second, my first reaction was that it might prove difficult for any nation to ‘go it alone’ on a scheme like this, but the MPs’ report actually talks about the advantages of being first in the field.  I suspect that ‘early adopter’ is a better description that ‘going it alone’ in reality – if the world is serious about tackling man’s impact on the composition of the atmosphere, we’re all going to need to adopt this, or something like it, at some point.
Will it be popular?  I doubt it – and that’s probably why only the Green Party have formally adopted it as policy to date.  That does, though, bring me back to one of my favourite themes – should parties and politicians be in the business of telling people what they want to hear in order to win votes, or should they be in the business of telling people what they believe to be right, with a view to changing public opinion?
On environmental policy (as on constitutional policy), I’ve always taken the view that it is the job of any party which is serious about securing real and fundamental change to lead, not follow, public opinion.  Putting radical objectives to one side in pursuit of votes means that politics becomes little more than a beauty contest to decide which bunch of politicians should be in government.  And on the question of emissions control, merely reflecting and trying to implement existing public opinion will mean that action will be too little and too late. 
The future is simply too important for that.


Anonymous said...

So how will that work? I have to have a car and travel to work every day. Somebody in London wouldn't need a car. Would I have to pay him/her for some of their quota.

Why don't the government start with all these meetings they and governments around the world have. They always fly to some exotic location....even when discussing Green issues. Today, they could be done over internet conferencing. I don't see the Green lobby campaigning very much there......

John Dixon said...


The original post provided a link to a downloadable pdf which covers the subject in a lot more detail. In essence, the scheme would cover ALL energy usage, not just fuel for your car.

Everyone would get an equal allocation of units which would be deducted from their account as and when they purchase energy. For some (typically the least well-off), that allocation would be more than adequate for their lifestyle, and they would have a surplus to sell. For others (typically the most well-off), their lifestyle would become unsustainable within the allocated quota, and they would need to buy more.

So, whether you as an individual would have a surplus to sell, or would need to buy more, depends ultimately on how energy-intensive your lifestyle is, and at what level the quotas are set.

I can't disagree with your point about governments reducing their travel to exotic locations. Sometimes it's helpful to meet in person, but an awful lot more could be done remotely in advance.