Department of Energy and Climate Change

Personal carbon trading

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Personal carbon trading

About personal carbon trading

Personal carbon trading is a way of enabling individuals to manage their own carbon dioxide emissions. A national emissions ‘cap’ would be set, and emissions rights (in the form of carbon credits) would be allocated across the population as a whole. Individuals would surrender their carbon credits when they buy, for example, electricity, gas or transport fuel.

Those who need or want to emit more than their allowance would have to buy allowances from those who emit less. Over time, the overall emissions cap (and hence individual allocations) could be reduced in line with internationally or nationally adopted agreements.

The personal carbon trading study

This study aimed to form an initial view on the value of personal carbon trading, compared with other approaches to reduce individuals' carbon dioxide emissions. The issues explored included:

  • the proportionality, efficiency and effectiveness of personal carbon trading compared or combined with existing policies and other ways of achieving the same emission reductions
  • potential equity and distributional impacts, in order to understand how personal carbon trading might affect different groups in society and to consider the impact of different scheme designs (for example, the inclusion/exclusion of public transport)
  • the technical feasibility of such a scheme, how it could be operated in the simplest way, and what supporting systems and IT might be required, as well as what it might cost
  • whether it would avoid placing undue burdens on individuals, and if so how it could be designed in a way that would be most acceptable to the general public.

The findings

The government-funded personal carbon trading study revealed some important issues around its effectiveness as a way to reduce individuals’ emissions. Although DECC remains interested in the concept of personal carbon trading, the findings of this initial study mean that it will not be taken any further at this stage. Academics and research institutions outside of government are carrying out more research, and DECC will watch their progress.

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