Tradable Energy Quotas
Encyclopedia
TEQs is a proposal for a national emissions
and energy
trading scheme that includes personal carbon trading
as a central element. It is the subject of significant interest from the UK Government, and is explicitly designed to address both climate change
and peak oil
.
The scheme was originally known as DTQs (Domestic Tradable Quotas). This was later changed to TEQs (Tradable Energy Quotas) due to confusion caused by the word "domestic" in the original title. While intended to distinguish the scheme from international trading schemes, it was sometimes misinterpreted to imply that the scheme covered only household emissions, rather than the entire national economy.
, Fleming was eventually invited to give evidence to the House of Lords Select Committee on Science and Technology, and this was followed by a Ten Minute Rule
Bill, presented to Parliament by Colin Challen MP
on July 7, 2004.
, the Royal Society for the encouragement of Arts, Manufactures & Commerce and the Institute for Public Policy Research
, among others. A number of academic papers were produced, followed by Mayer Hillman
's book How We Can Save The Planet.
, then Secretary of State for Environment, Food and Rural Affairs
, commissioned the Centre for Sustainable Energy to produce a scoping study into the idea. This had the headline finding that "a personal carbon allowance and trading system has the potential to achieve emissions savings in a fairer way than carbon taxes, and would reward people for leading low-carbon lifestyles". Accordingly, a full Government pre-feasibility study into the scheme was launched, and four reports were published in May 2008.
This finding was challenged by numerous research groups, including the UK Parliament's own Environmental Audit Select Committee
, who stated that "although we commend the Government for its intention to maintain engagement in academic work on the topic, we urge it to undertake a stronger role, leading and shaping debate and coordinating research". In January 2011, the All Party Parliamentary Group on Peak Oil produced a report, jointly authored by David Fleming and Shaun Chamberlin, pulling together the various critiques and urging the Government to move forward towards implementation of TEQs.
2. There are two reasons why such a scheme may be needed:
Climate change: to guarantee achieving national carbon reduction targets.
Energy supply: to maintain a fair distribution of fuel and electricity during shortages.
3. TEQs are measured in units.
4. Every adult is given an equal free Entitlement of TEQs units each week. Other energy users (Government, industry etc.) bid for their units at a weekly Tender, or auction.
5. If you use less than your Entitlement of units, you can sell your surplus. If you need more, you can buy them. All trading takes place at a single national price, which will rise and fall in line with demand. Buying and selling would be as easy as topping up an Oyster card or mobile phone.
6. All fuels (and electricity) carry a “carbon rating” in units; one unit represents one kilogram of carbon dioxide – or the equivalent in other greenhouse gases – released in the fuel’s production and use.
7. 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 generally automatic, using credit-card or (more usually) direct-debit technology.
8. The total number of units available in the country is set out in the TEQs Budget. The size of the Budget goes down year-by-year – step-by-step, like a staircase.
9. The Budget is set by the Committee on Climate Change, which is independent of the Government. The Government is itself bound by the TEQs scheme; its role is to support the country in thriving on the available carbon/energy.
10. Since the national TEQs price is determined by national demand, it is transparently in everyone’s interest to help each other to reduce their energy demand, and to work together, encouraging a national sense of common purpose.
's Cap and Share
proposal.
Exhaust gas
Exhaust gas or flue gas is emitted as a result of the combustion of fuels such as natural gas, gasoline/petrol, diesel fuel, fuel oil or coal. According to the type of engine, it is discharged into the atmosphere through an exhaust pipe, flue gas stack or propelling nozzle.It often disperses...
and energy
World energy resources and consumption
]World energy consumption in 2010: over 5% growthEnergy markets have combined crisis recovery and strong industry dynamism. Energy consumption in the G20 soared by more than 5% in 2010, after the slight decrease of 2009. This strong increase is the result of two converging trends...
trading scheme that includes personal carbon trading
Personal carbon trading
Personal carbon trading is a general term referring to a number of proposed emissions trading schemes under which emissions credits are allocated to adult individuals on a equal per capita basis, within national carbon budgets. Individuals then surrender these credits when buying fuel or electricity...
as a central element. It is the subject of significant interest from the UK Government, and is explicitly designed to address both climate change
Climate change
Climate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
and peak oil
Peak oil
Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...
.
The scheme was originally known as DTQs (Domestic Tradable Quotas). This was later changed to TEQs (Tradable Energy Quotas) due to confusion caused by the word "domestic" in the original title. While intended to distinguish the scheme from international trading schemes, it was sometimes misinterpreted to imply that the scheme covered only household emissions, rather than the entire national economy.
Early history
David Fleming first published on the TEQs model in June 1996 (although at this time he used the name DTQs - Domestic Tradable Quotas). This was followed by discussion papers, a journal publication and a series of presentations to Governmental organisations and NGOs. Working with Richard Starkey of the Tyndall Centre for Climate Change ResearchTyndall Centre
The Tyndall Centre for Climate Change Research is an organisation based in the United Kingdom that brings together scientists, economists, engineers and social scientists to 'research, assess and communicate from a distinct trans-disciplinary perspective, the options to mitigate, and the...
, Fleming was eventually invited to give evidence to the House of Lords Select Committee on Science and Technology, and this was followed by a Ten Minute Rule
Ten Minute Rule
The Ten Minute Rule, also known as Standing Order No. 23, is a procedure in the British Parliament for the introduction of Private Member's Bills in addition to the 20 per session normally permissible. It is one of the ways in which a bill may receive its first reading.Any MP may introduce a bill...
Bill, presented to Parliament by Colin Challen MP
Colin Challen
Colin Robert Challen is a British Labour Party politician, who was the Member of Parliament for Morley and Rothwell from 2001 until the constituency's abolition at the 2010 election.-Early life:...
on July 7, 2004.
Research interest
After its mention in the UK Parliament, TEQs became widely studied by research centres internationally, including the Environmental Change Institute (Oxford University), the Natural Environment Research CouncilNatural Environment Research Council
The Natural Environment Research Council is a British research council that supports research, training and knowledge transfer activities in the environmental sciences.-History:...
, the Royal Society for the encouragement of Arts, Manufactures & Commerce and the Institute for Public Policy Research
Institute for Public Policy Research
The IPPR is the leading progressive think-tank in the UK. It produces research and policy ideas committed to upholding values of social justice, democratic reform and environmental sustainability. IPPR is based in London and IPPR North has branches in Newcastle and Manchester.It was founded in...
, among others. A number of academic papers were produced, followed by Mayer Hillman
Mayer Hillman
Mayer Hillman is a Senior Fellow Emeritus since 1992 at the Policy Studies Institute, University of Westminster.A qualified architect and town planner, he completed a doctoral thesis on transport, planning and environmental issues in 1970 at the University of Edinburgh.Hillman co-authored a 1990...
's book How We Can Save The Planet.
Initial Government interest
In 2005, David Fleming published the first edition of his popular guide to TEQs, Energy and the Common Purpose (now in its third edition). TEQs were by that time widely discussed in books, academia and the research world, and in 2006 David MilibandDavid Miliband
David Wright Miliband is a British Labour Party politician who has been the Member of Parliament for South Shields since 2001, and was the Secretary of State for Foreign and Commonwealth Affairs from 2007 to 2010. He is the elder son of the late Marxist theorist Ralph Miliband...
, then Secretary of State for Environment, Food and Rural Affairs
Secretary of State for Environment, Food and Rural Affairs
The Secretary of State for Environment, Food and Rural Affairs is a UK cabinet-level position in charge of the Department for Environment, Food and Rural Affairs, and the successor to the positions of Minister of Agriculture, Fisheries and Food and Secretary of State for the Environment, Transport...
, commissioned the Centre for Sustainable Energy to produce a scoping study into the idea. This had the headline finding that "a personal carbon allowance and trading system has the potential to achieve emissions savings in a fairer way than carbon taxes, and would reward people for leading low-carbon lifestyles". Accordingly, a full Government pre-feasibility study into the scheme was launched, and four reports were published in May 2008.
UK Department of Energy and Climate Change pre-feasibility study
The headline finding of the pre-feasibility study was that "personal carbon trading has potential to engage individuals in taking action to combat climate change, but is essentially ahead of its time and expected costs for implementation are high". Following this, the Government announced that it "remains interested in the concept of personal carbon trading and, although it will not be continuing its research programme at this stage, it will continue to monitor the wealth of research focusing on this area and may introduce personal carbon trading if the value of carbon savings and cost implications change".This finding was challenged by numerous research groups, including the UK Parliament's own Environmental Audit Select Committee
Environmental Audit Select Committee
The Environmental Audit Select Committee is a select committee of the House of Commons in the Parliament of the United Kingdom. The remit of the committee is to examine how government department's policies and programmes will affect both the environment and sustainable development.-Membership:As of...
, who stated that "although we commend the Government for its intention to maintain engagement in academic work on the topic, we urge it to undertake a stronger role, leading and shaping debate and coordinating research". In January 2011, the All Party Parliamentary Group on Peak Oil produced a report, jointly authored by David Fleming and Shaun Chamberlin, pulling together the various critiques and urging the Government to move forward towards implementation of TEQs.
Overview of how the scheme would work
1. TEQs (Tradable Energy Quotas) is an electronic energy rationing system designed to be implemented at the national scale.2. There are two reasons why such a scheme may be needed:
Climate change: to guarantee achieving national carbon reduction targets.
Energy supply: to maintain a fair distribution of fuel and electricity during shortages.
3. TEQs are measured in units.
4. Every adult is given an equal free Entitlement of TEQs units each week. Other energy users (Government, industry etc.) bid for their units at a weekly Tender, or auction.
5. If you use less than your Entitlement of units, you can sell your surplus. If you need more, you can buy them. All trading takes place at a single national price, which will rise and fall in line with demand. Buying and selling would be as easy as topping up an Oyster card or mobile phone.
6. All fuels (and electricity) carry a “carbon rating” in units; one unit represents one kilogram of carbon dioxide – or the equivalent in other greenhouse gases – released in the fuel’s production and use.
7. 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 generally automatic, using credit-card or (more usually) direct-debit technology.
8. The total number of units available in the country is set out in the TEQs Budget. The size of the Budget goes down year-by-year – step-by-step, like a staircase.
9. The Budget is set by the Committee on Climate Change, which is independent of the Government. The Government is itself bound by the TEQs scheme; its role is to support the country in thriving on the available carbon/energy.
10. Since the national TEQs price is determined by national demand, it is transparently in everyone’s interest to help each other to reduce their energy demand, and to work together, encouraging a national sense of common purpose.
Influence on other policies
TEQs were the inspiration behind other proposed policy instruments designed to deal with climate change, such as PCAs (Personal Carbon Allowances) and FEASTAFoundation for the Economics of Sustainability
Feasta, the Foundation for the Economics of Sustainability is an organisation based in Ireland which aims "to identify the characteristics of a truly sustainable society, articulate how the necessary transition can be effected and promote the implementation of the measures required for this purpose"...
's Cap and Share
Cap and Share
Cap and Share was originally developed by Feasta and is a regulatory and economic framework for controlling the use of fossil fuels in relation to climate stabilisation...
proposal.
External links
- TEQs - official website
- The All Party Parliamentary Group on Peak Oil's January 2011 report into TEQs, downloadable as a PDF.
- David Fleming's popular guide to TEQs, Energy and the Common Purpose (3rd edition), downloadable as a PDF.
- The Centre for Sustainable Energy's Scoping Study for DEFRA (2006).
- The UK Government's pre-feasibility study into TEQs (May 2008).
- Critiques of the Government pre-feasibility study, from The Lean Economy Connection, the Centre for Sustainable Energy and the House of Commons Environmental Audit Committee.
- BBC Radio 4 - 12 minute discussion of peak oilPeak oilPeak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...
and TEQs. - Information on Southern Cross University's TEQs trial on Norfolk Island, due to start in 2011.