Online personal carbon trading platforms

Hi all
AMEE does enable trading – with its profiling engine. You can treat kgCO2 as the currency…
http://blog.co2.dgen.net
best
gavin

I like the idea of getting funding to encourage participation in personal carbon trading schemes, as I am sure it would encourage people to make greater changes to their lifestyles if the rewards were financial rather than just moral. However, I suspect that a possible problem is in proving that the resulting cuts would not have occurred without the funding. Offsetting companies, quite rightly, have to be able to show that any cuts in CO2 emmissions occurred directly as a result of their investment – thats why they do not invest in things such as local biodiesel schemes which would probably have gone ahead anyway even without their investment. They cannot be seen to be simply increasing the profits of green entrepreneurs. With this in mind, would (or should) an offsetting company effectively pay people to make cuts in their CO2 emissions? Would this simply result in everyone who has had microgeneration technologies installed joining a scheme in order to cash in? Would it result in new emissions cuts? I hope it would, I wish it would, but if I were considering which form of offsetting to invest in I may think twice about choosing a form which does not itself invest in anything new but simply distributes the cash to those who have already made the cuts.

I hope this does not sound too negative, I do not want it to be, I hope you will come up with an argument to sway me because I too would love to be able to “sell” personal carbon trading to people other than the already committed greens.

Post-Leamington Peter

Jamie

CRAGger Hackney CRAG Wychwood

Hi Peter,

There is an important distinction between current offsetting schemes like Climate Care, and the idea of personal carbon trading. Because the carbon markets currently operating in the world are not pure cap and trade, it means that the ‘savings’ made in developing countries are superficial – all notions of ‘offsetting’ invoke counter-factual assumptions about what would have happened otherwise. So for example, a solar water-heating project can earn carbon credits because it is assumed that without the additional financing, a carbon-intensive fuel would have been used to heat the water. A personal carbon trading market makes the reductions, and associated emissions cuts, within one ring-fenced market. That means that we never have to imagine ‘what might have happened’ because we are talking specifically about reducing fossil fuel emissions.

A carbon offset company would not be involved in paying people for reductions as it would be a completely different business model (indeed there wouldn’t be a business model at all for them, Government would need to be involved). It is very difficult to ‘trial’ a full personal carbon trading system because of various inherent skews involved when the whole country (and its emissions) are not included. However, what we can do is (i) look at rewarding energy reductions through a basic scheme such as council tax rebates (if councils and Government implement it of course) and (ii) setting up a closed group of traders where money only flows from the high emitters to the low emitters. These two things would be separate and neither could really be called personal carbon trading.

For more information about how a scheme might work across the whole economy, see www.teqs.net. As the idea of personal carbon trading is assessed, there are three conditions looking to be met: Equity, Effectiveness and Efficiency. The first of these will hopefully look into some of the questions you’ve raised.

Thanks for the link to the TEQs/Lean Energy Connection website Jamie. It is an excellent site and David Flemmings’ response to the pro-nuclear argument is especially welcome, given that so many people are now being swayed in the direction of nuclear.
Peter

I think double counting is another issue with the selling of personnal carbon reductions (or any other avoided ton of CO2 in a system without cap). People who can achieve a low carbon lifestyle already benefit from it in a certain way (cheaper energy bills, social prestige, feel-good feelings…). If they were to sell their credits (“rights”) to others (either individuals or companies) they should give their benefits away (“you can’t eat your cake and have it”). Without effective registry I don’t see how we might avoid double counting of the carbon reductions. We often see that in businesses’ annual report or advertising campaigns where a single action is mentionned by several different actors
who all are very proud to claim they were responsible for the emission cut (there is no doubt that the person/company who would buy our allowances would pretend that the reduction occured thanks to their sponsoring, if not why would they buy our credits?).

A notable exemple I identified is the use of fly-ash instead of cement to produce concrete. Energy utilities running coal power plants now consider their fly-ashes as a by-product (15 years ago they were thrown away in landfills) that avoids CO2 emissions in the concrete industry and often mention the avoided CO2 through the recovering of their fly-ashes. The concrete supplier considers he behaves friendly towards our environment because he uses fly-ashes instead of concrete (concrete production causes huge amount of carbon dioxide emissions). Finally, some construction companies or even buyers of new constructions built with such concrete say the same thing. If you install solar panels are you responsible of the cuts or can the company who sold/produced this panel also claim it was responsible?

To conclude, unless we are all committed to measurable targets what we would sell as a reward of a lower carbon lifestyle would simply be hot air. For those I may have dashed their hope, note that the price of a single Verified Emission Reduction (= one ton avoided CO2 verified by an independent body) is around £5, so even if you reduce your emission by a few tons with double glazing, better insulation and/or solar panels, I don’t think the pay-back time would be much reduce with the selling of carbon offsets. Higher energy price and/or our responsibility towards our future generation or peoples living on coastal areas are to me higher incentives.

Arnaud

david

website team CRAGger Sevenoaks

I think that setting up a voluntary trading scheme would be great coup. It would demonstrate such a thing is feasible and would really push the debate forward. You’ll need a common footprinting standard (dgen/AMEE’s work looks promising) and, as you say, to link up with supplier meter readings for verification (are Torchbox planning this?).

If, however, you do this within CRAGs, I think people may have a greater problem with receiving rewards than paying penalties. Not only may you not have to skew towards rewards, but also provide people with a charitable donation route for any receipts. Small groups of greens seem to swing this way! It would probably be different with a wider, individualist audience – but would these people be early adopters?

I’m not sure that personal carbon reductions being bought by business is workable as a general ongoing solution – principally because it fundamentally undercuts the understanding of greenhouse gas emissions as a dangerous limited “resource” that needs to be shared equally across society. Pitting individuals against big business isn’t going to help us build the civil society that collectively understands and acts on the need for urgent and drastic reductions in greenhouse gas emissions by all of us. Rather, it perpetuates the issue as an SEP [someone else’s problem]…

Interestingly, at the recent “Manchester is My Planet” carbon trading event run by the RSA, it was noted that those trading carbon were concerned that they were selling to those who were being less actively green. This might be an even bigger problem when the seller is the individual and the buyer industry.

However, I really like the idea of using business-funded offsets as a one-off way of recruiting individuals into a pilot trading scheme such as the RSA are starting to run. Notwithstanding the major difficulties in running a voluntary pilot of a mandatory scheme, any such pilot would need to be as representative as possible. Maybe Guy’s idea could work here? The difficulty I see here is that we may find that this encourages many not-very-green people to take part, who then don’t realise or take seriously the possibility of having to pay a carbon debt at the end of the pilot. This is where offset money could be very useful – after the final reporting and reckoning up perhaps, as an * unexpected and unadvertised * amelioration of some/all of the costs incurred. [Its * vital * that any pilot includes as many not-very-greens as possible incurring carbon debts to identify the full range of likely problems that need to be addressed.] Furthermore, especially in a pilot relatively full of greens, the price of carbon is likely to be low due to low levels of purchasing demand, suggesting perhaps a need for artificial maintenance of the carbon price.

As for David’s point that greens don’t want to receive payment for their successful reduction of greenhouse gas emissions – I wonder if this is not about being green, but knowing the payer of your carbon credit personally? In a larger scale and anonymised market, you wouldn’t know this.

I take the difficulties of avoiding double counting. However, there are grants available to community bodies funded by environmental penalties induced by companies [e.g. Landfill Communities Fund] which might be acceptable alternative funding sources.

Similar to what Guy suggests [I suspect] is the energy scheme Utilita. http://www.utilita.co.uk/index.html Via Utilita, you sign up to various energy companies, and the lower your use of energy, the more “planetpoints” you receive, and you can then exchange those planetpoints for energy efficiency items [ranging from lightbulbs upwards]. However, the tariff seems very restrictive – planetpoints don’t seem to relate to solid wall insulation – and very low – 1800 planetpoints for loft insulation sounds like a substantial reduction in greenhouse gas emissions is needed. As Guy says, we need to offer a big bonus to widen participation in a pilot carbon trading scheme – I don’t think this is it.

I still think there may be considerable mileage for personal carbon trading schemes to widen participation via addressing issues of carbon equity and objections to green taxes. Not an alternative, but an additional avenue to explore.

Bw

Anna

Jamie

CRAGger Hackney CRAG Wychwood

First of all a quick response to David’s question:

- Torchbox are looking into integrating smart meters with the Carbon Account – We are also exploring how AMEE may be used as a trading platform (Torchbox just signed a Memorandum of Understanding with DGen, see http://blog.co2.dgen.net).

In terms of an actual trial (aside from the great work the RSA are doing), the problem is really about what we can call ‘personal carbon trading’. There’s lots of initiatives that it would be good to explore to financially incentivise reduced personal emissions, but until fiscal policy is directly implicated, it would be wrong to call it a ‘personal carbon trading trial’. We looked into this in detail a few months ago and David Fleming was at pains to point out that any trial would have too many inherent skews (such as the ones identified so far in this discussion) to operate properly as a representative trial. The Utilita idea looks good; hopefully other companies will create similiar incentive schemes for energy reduction (and I have a feeling they will).

If there is a lot of support amongst CRAGgers for a scheme that involves donations, Torchbox may be able to help set it up. We’ve looked into the idea briefly and have some organisations in mind. The idea would be that the ‘offsets’ of the higher emitters would go into a charitable fund to pay for projects chosen by people participating in the scheme. The difference from normal offsetting is that once you have chosen to take part, the fees of higher emitters are compulsory rather than voluntary one-off amounts (and there would be no interaction with conventional carbon markets). There’s lots of details that would need working out, but if you’re interested please send me a message so I can get an idea of whether it’s worth pursuing.

Jamie

Guy S

website team CRAGger Islington

Guys, thanks for all the very interesting comments so far! I’m pleased this seems to have sparked off some great ideas. Keep ‘em coming.

I think the point made about greens being less willing to trade away their hard-won emissions cuts is very valid. In the CSE report I cited in my original post (http://www.defra.gov.uk/ENVIRONMENT//climatechange/uk/individual/pdf/stu…), the authors noted precisely this:
‘Interestingly, some groups most actively focused on achieving targeted reductions in personal carbon emissions (CRAGs) appear to be suspicious of the notion of ‘trading in’ the carbon benefits they had achieved so that someone else could ‘do less’. This is understandable within a small group of dedicated activists seeking to reduce their contribution to the threat of climate change (since trading potentially dilutes the contribution they are making as individuals).’

What I would say to assuage such fears is: the buyers of such credits are already emitting loads of carbon anyway. The difference now is that there are social pressures and incentives to make them part with money to pay for their pollution. I’d rather know that such money was going to fund certified emissions cuts rather than snake-oil offset salesmen.

In terms of a wholly incentive-based pilot ‘trading’ system not really being a trading system, fair point Jamie. The trade needs to be two-way; carrots and sticks. And as Anna points out, a few small Utilities companies are already starting to incentivise such energy efficiency amongst their customers – the Energy Service Company (ESCo) model – and we don’t need to call this personal carbon trading. A further way of incentivising mass participation in greener behaviour might be to introduce a Feed-In Tariff for renewable electricity. For a clear explanation of how this would work, see Ashley Seager’s recent piece in the Guardian, http://business.guardian.co.uk/economy/story/0,,2142674,00.html.

But a broader, more encompassing market framework for voluntarily buying and selling carbon credits is also still desirable and, I think, feasible. A Feed-In Tariff only incentivises domestic microgeneration; an ESCo only incentivises saving on fuel and electricity bills. A voluntary carbon trading market – an Ebay for carbon reductions – should allow individuals to put up for sale carbon savings they’ve made anywhere in their activities. Demand could come wholly from companies obliged to reduce their emissions by the forthcoming Carbon Reduction Commitment (at least I think so; I’m not sure of its details yet). Verification data for transport might come from linking up with Oystercard, shopping activities from a supermarket Loyalty Card scheme. At this stage, though, this is much too ambitious.

Jamie – I’m interested in finding out more about your suggestion for a donations-based scheme – can you explain more? What ties the debtors into the scheme?

Lastly, to end this very lengthy post, note that the CSE report recommends that the Government:
‘...Commissions a standardized and easy-to-use web-based personal carbon trading tool which: (a) enables groups to organise their own schemes according to their own agreed approach to the issues such as cap setting, allowance baselines, reduction targets, and allocation; (b) captures carbon profiles of participants for research purposes, and; (c) provides the opportunity to track how individuals are responding and trading over time.’

Is DGen / Torchbox angling for anything like this…?