This week I've been re-visiting some of our older blog content - namely Michelle Hazelton's excellent tour around CAP and Trade and the EU's Carbon Trading solutions. Opinions around these solutions vary, but I would say that there is generally more bad press than good as far as I can see. Maybe it's just my inbuilt mistrust of any program that comes from government these days (banking anyone?), but Carbon Trading as a means to reducing greenhouse gas emissions just doesn't seem to be working.

What's wrong with good old Carbon Trading?

The problem with carbon trading is that there just seems to be too many allowances handed out. This brings down the price of a ton of carbon to a level where the whole scheme just has no teeth whatsoever. Loopholes are many too. Recently the Guardian newspaper reported that some companies are hoarding their EU credits, while buying up cheaper one from developing nations. The end result is that it’s just too easy for these companies to keep on keeping on.Articles such as this one regarding the estimated £1Bn which stands to be made by Britain’s richest man from excess carbon credits don't help the Carbon Trading PR cause either.

So Give us an Alternative Then!

So as ever I started to trawl around for alternative solutions (there is always an alternative solution to absolutely everything on the internet). Almost immediately I came across Tradable Energy Quotas or TEQs. I can't believe I hadn't seen this sooner - the idea here is blindingly simple. A brainchild (love that word!) of David Fleming, TEQs is an energy rationing system to enable nations to reduce their emissions of greenhouse gases along with their use of oil, gas and coal, and to ensure fair access to energy for all.
This fits in with our philosophy at 1E - which is the promotion of energy conservation, rather than trying to keep up with an ever increasing demand. A visit to the TEQs website also reveals some great information around Nuclear Energy too. Nuclear Power is being touted as one way to boost energy production as an alternative to using fossil fuels, and the Nuclear industry seems very keen to sell it to us as a 'low carbon' or even 'carbon neutral' solution. A quick read of the excellent document on Nuclear Energy soon dispelled that myth for me however..

So how do TEQs work? Well essentially it's a rationing system, and I use the term rationing deliberately here, although it may well cause panic in members of the older generation here in the UK who remember food rationing of the Second World War and beyond. I believe that energy rationing may well be the only way to truly reduce our reliance on fossil fuels, with Peak Oil looming larger each year the sooner we start the better. Government scaremongering campaigns simply don't work in persuading us to drive less, save energy or throw away less food, but if we were all given an energy allowance it would achieve two things at least, namely raising awareness that energy is a finite resource, and also encouraging everyone to use less of it for fear of running out of allowance. Here's how it works in more detail:

TEQs (pronounced "tex") are measured in units.
 
1. Every adult is given an equal free Entitlement of TEQs units. Industry and Government bid for their units at a weekly Tender.
 
2. At the start of the scheme, a full year's supply of units is placed on the market. Then, every week, the number of units in the market is topped up with a week's supply.
 
3. If you use less than your Entitlement of units, you can sell your surplus. If you need more, you can buy them.
 
4. All fuels (and electricity) carry a "rating" in units; one unit represents one kilogram of carbon dioxide, or the equivalent in other greenhouse gases, released when the fuel is used.
 
5. When you buy energy, such as petrol for your car or electricity for your household, units corresponding to the amount of energy you have bought are deducted from your TEQs account, in addition to your money payment. TEQs transactions are automatic, using credit-card or (more usually) direct-debit technology.
 
6. The number of units available on the market is set out in the TEQs Budget, which looks 20 years ahead. The size of the Budget goes down year-by-year - step-by-step, like a staircase.
 
7. The Budget is set by the Energy Policy Committee, which is independent of the Government.
 
8. The Government is itself bound by the scheme; its role is to find ways of living within it, and to help the rest of us to do so.
 
9. TEQs are a national scheme, enabling nations to keep their promises, guaranteeing their carbon reduction commitments within whatever international framework applies at the time. 

I do love the simplicity of this idea, and the fact that it's not just carbon centric,  but will it work? I'm not so sure. Politically I wouldn't like to be the guy who introduces rationing of any kind at a personal level, especially one that is likely to decrease year on year. I also think that the scheme is a little naive in the way it treats industry. However I do love the idea and in the longer term what is the alternative? There's no question that we have to seriously curtail our runaway use of the world's resources, and the longer we leave things, the more likely a rationing scenario of some kind becomes..

If you want to know more about TEQs you can download the full paper from the website here.