British Government Explores Carbon Trading

May 26, 2008

A study by the Environmental Audit Committee has shown that, at least for the British government, a system of personal carbon credits would be more effective for reducing carbon emissions than a tax hike.

The study does say that immediate implementation is not an option: "Further work is needed before personal carbon trading can be a viable policy option and this must be started urgently, and in earnest.” Specific concerns include the current lack of an effective carbon trading system and the likeliness of public opposition to the plan.

One of the greatest benefits of a carbon credit system, according to the committee’s chairman, Tim Yeo, is that there are clear rewards for families who choose a more sustainable lifestyle — they’ll be able to make money on their unused credits. In comparison, a tax system would essentially make no provisions for individuals making an effort to live a green lifestyle; everyone would essentially be paying the same amount. For instance, everyone pays the same amount of tax on a tank of gas for their car — no matter how far they stretch that tank.

Because of the practicality issues, the British government’s discussion on personal carbon trading has been effectively tabled for the time being, although there are plans to return to the subject after some private research currently underway has been completed.