FAQ - Cap & Share

Why only adults - shouldn’t children get a certificate too?

This is a question to be debated when C&S is introduced. There are arguments for the allowances to go to adults only. They, by and large, are the people spending money and paying the higher prices. On the other hand, bringing up children costs money. One solution is to give children partial allowances (say a half allowance each), although that means the amount of the standard allowance for everyone would have to be reduced. Another solution is to help parents separately through adjusting things like Child Tax Credit, which means that C&S can be kept simple.

What about poor people who live in old houses?

“Equal shares for all” sounds fair, and it has a simple, robust fairness to it, like “one person one vote.” But some poorer people will find the rising price of fuel difficult to cope with, and may be in no position to insulate their houses (for example if they are rented).

C&S is good for poorer people, since they gain as they tend to have lower than average carbon footprints. It’s important to realise that even if they have higher than average heating bills, they take fewer if any flights, and spend less on everything else, and as long as the TOTAL carbon footprint is below average, they will gain financially (this is a difference between C&S and Personal Carbon Trading). For those poor people who are worse off, targetted “fuel poverty” measures are possible (and preferable to making C&S more complicated).

What about people who live in rural areas?

The same answer applies here. Rural populations are more dependent on cars and can say they are a special case. Various groups can argue for special treatment, but this is best done by separate, transparent arrangements, keeping C&S itself simple and easy to understand.

What’s to stop people just buying more petrol (and so busting the cap)?

At the petrol pump, there are no controls at all - except for the price. The cap cannot be busted because there are only a fixed number of certificates issued, hence a fixed amount of petrol in circulation, corresponding to the cap. If people (the whole population taken together) want to buy more petrol than this, the price goes up until they don’t. That is what supply and demand means.

It’s like land - there is only a finite, fixed supply of this too. I can always buy some more land (provided I have the money) - but this doesn’t cause more land to be created.

But surely this means rich people can still have big cars and buy more petrol?

Yes, but they are paying more (and more) for the privilege. And the prices will make even them cut down somewhat, too. Meanwhile people with lower than average carbon footprints are benefiting. And overall, the cap has been met.

We are likely to have rich people and poor people for some time yet. But C&S is actually “progressive” in that it yields a transfer of money form rich people to poor people. (See the answer to the second question above).

Prices are higher but I get the certificate income - doesn’t this negate the price signal?

No - but it’s a fair question. The point is that the higher prices apply to fossil fuels only. Renewables, for example, don’t increase in price at all (or do so by a very small amount).

These price rises encourage you to swop to renewables, in other words to change your behaviour. The income you get (from selling your certificates) won’t in itself make you swop back - you’ll still go for the cheaper option.

Of course, you will still buy some carbon-intensive goods. But you won’t want to carry on exactly as before. In fact, if everyone wanted to carry on as before, they wouldn’t be able to, because the demand would push the price up even higher (remember, there are only a fixed number of certificates issued, corresponding to the cap). The higher the certificate price, the stronger the price signal.

Isn’t Personal Carbon Trading (PCAs or TEQs) a better way forward?

A: A variety of approaches to capping carbon have been proposed, and the important thing is to start capping carbon SERIOUSLY, and to get going SOON - the choice of which method we use is less important, as long as it does the job. Having said that, some schemes are quicker and simpler to implement than others, and we feel that C&S scores over PCAs/TEQs in this regard.

Another advantage of C&S over PCT, however, is that C&S covers ALL emissions - not just personal direct emissions (our petrol, gas etc) but also Indirect emissions (embedded in the goods and services we buy). PCT leaves these indirect emissions (some 60% of the total) to be covered by a separate emissions trading scheme. So C&S is “100% fair”, as opposed to PCT which may be only “40% fair” (depending on what happens to the revenue from the emissions trading scheme).

Why not simply give people the money - as in Cap & Dividend?

Cap & Dividend is the system being advocated in the USA by Peter Barnes and others. It is the same as Cap & Share, except that you don’t get your certificate. Instead, all the certificates are auctioned off (to the fossil fuel suppliers) and you get the money directly - say every month.

It is a simpler system, and hence cheaper. For you, it is simpler too - you don’t have to bother about selling your certificates - or worry about who to sell them to and when. If Cap & Dividend were to be introduced, the Cap & Share campaigners would be happy.

Cap & Share is simply a different option. The advantage of Cap & Share over Cap & Dividend is purely psychological. With C&S you get the certificate and it is your share of the overall carbon footprint. You are in control of your share, and by selling your certificate you are allowing this share of the carbon footprint to be emitted. If you want to, you can withhold part of it (simply tear up some of your certificates) and you will reduce the country’s carbon footprint by that amount. It is for the government and the public to decide whether this is worth the extra complication and cost of C&S over Cap & Dividend.

What about other greenhouse gases?

As we have explained on this website, C&S applies only to suppliers of fossil fuels which generate CO2 emissions. We need a parallel system for the other gases such as methane, nitrous oxide and HFCs. But because CO2 is the front-runner it is the most important arena in which to get action first.

Some of these other gases may be best dealt with by separate industry regulation. But schemes like C&S (or Cap & Dividend) are simple enough that we could have them applying to several gases in parallel - whereas it is hard to imagine having Personal Carbon Trading and also Personal Methane Trading, Personal HFC Trading and so on.

Isn’t it naive to suppose politicians will do this in time?

We have to be realistic about human nature, and about the world of politics. Although we might think politicians should show leadership, in practice they only tend to act when they feel the people are pushing for something. So tell your MP that: [1] you know the climate crisis is serious and urgent, [2] you want and expect politicians to address it through C&S (or something similar), and [3] you are prepared to support politicians who face up to somewhat painful choices today in order to safeguard the future.

And get your friends to do the same.