Other schemes
A variety of approaches to capping carbon have been proposed, and some are mentioned below. But 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.
So look at the comparisons below as comparing tools. We need to pick a good tool for the job in hand, but let's not get sidetracked so much into debating the tools that we postpone starting the job beyond the point where it's too late.
Upstream auctions
Instead of giving people the certificates, why not just give them the money? An independent trust might run such an auction, and then distribute the money to the people on an equal per capita basis (that is, every adult gets the same amount).
Alternatively the government might just auction the permits and keep the money, using it for general expenditure and to reduce other taxes. Governments (not surprisingly) tend to favour this latter approach.
Cap & Dividend (Sky Trust)
Cap & Dividend (see Links) is proposed in the USA by Peter Barnes as part of the "On the Commons" initiative. It uses the first of the two upstream auction options above. An upstream auction of permits would be run by a "Sky Trust", independent of government, and the money refunded to the people on an equal per capita basis. The Alaska Permanent Fund is a precedent for this type of approach in the USA.
Cap & Dividend is the mechanism in the CLEAR Act proposed in the Senate Bill introduced in December 2009 (see the C&S in the USA section of this website for more).
Carbon Taxes
Putting a tax on carbon is an alternative way of making carbon more expensive, and so reducing the amount of carbon in the economy (and hence the emissions of CO2). It has the advantage that all the tax systems are already in place.
One problem with taxes is that they are unpopular, although in theory tax revenues could be distributed back to the population as in "Cap & Dividend". So governments will be reluctant to set carbon taxes at high levels. The other problem is that carbon taxes are like an elastic cap. So that even if they are set at high levels, people can still buy more and more fossil fuels if they want to. If we are serious about capping carbon, we have to stick to caps, not weaker systems like carbon taxes.
Kyoto 2
This is a global scheme proposed by Oliver Tickell in the recent book "Kyoto 2" (see Links). It is similar to Global C&S in that it is an upstream system where fossil fuel suppliers are required to have permits to introduce fossil fuels into the (world) economy.
Under Kyoto 2, these permits would be auctioned and the money used to fund mitigation and adaptation projects. It is thus similar to the Adaptation Fund proposed for Global C&S except that it uses 100% of the money, leaving none over for direct distribution to the people.
Many of the things an Adaptation Fund might do (building sea walls or whatever) are not the sort of things individuals can do. On the other hand, rebating some money to individuals (it is they who are paying the higher prices after all, which is where the money comes from) would give the scheme more electoral popularity, which might help get it agreed in the first place.
Personal Carbon Trading (PCAs, TEQs, DTQs)
All the schemes listed so far are upstream systems, similar to C&S. The other approach is to go downstream, with Personal Carbon Trading for individuals and an Emissions Trading Scheme (see below) for companies.
Personal Carbon Trading is a straightforward and understandable form of rationing, reminiscent of food or petrol rations in the Second World War. You would have an allowance, or ration, and a carbon card (the modern equivalent of a "ration book") which you would swipe each time you buy petrol (or gas or electricity). If you wanted more than your ration, you could buy allowances form people who used less carbon and were willing to sell their "spare" allowances to you.
Schemes for Personal Carbon Trading go under the names of Personal Carbon Allowances (PCAs), Domestic Tradable Quotas (DTQs) and Tradable Energy Quotas (TEQs). TEQs (see Links) were developed by David Fleming of the Lean Economy Connection, and the others are very similar.
Pesonal Carbon Trading is more complicated and expensive than C&S, but is more visible to people on an everyday basis.
The EU ETS (European Union's Emissions Trading Scheme)
Just as individuals might have carbon allowances and engage in carbon trading, companies (who also have emissions) would have carbon trading too. Their system is called an Emissions Trading Scheme. Unlike PCT, however, an ETS is already up and running in the EU for many large companies.
The first stage of the EU ETS is widely recognised to have had several problems:
- too many permits issued
- a windfall give-away to large companies
- only partial coverage - small companies excluded
- a leaky system - through some dubious CDM (carbon-offsetting) projects
Nevertheless, the system has at least started, and work is under way to tackle all four of these failings for the next stage. For example an increasing fraction of ETS permits will be auctioned to companies, not given away free.
The EU ETS is not likely to go away in the foreseeable future, but Cap & Share can dovetail with the ETS perfectly to cover precisely all those emissions not covered by the ETS (see the next paragraph,'Hybrids').
Hybrids
This is a general name given to mixing two schemes together. In practice the scheme we adopt will almost certainly be a hybrid. For example we might have a hybrid consisting of Cap & Share working alongside the EU ETS. For a set of diagrams explaining how this could work, see the Audiovisual part of the Resources section in this website.
Contraction & Convergence
We need a system for the world as a whole. This might be a single global system (such as Kyoto 2 or Global C&S), run by a single institution such as an agency set up by the UN. However, some see this as politically unrealistic, given a world of nations anxious not to surrender any of their sovereignty. So an alternative global solution might consist of an international framework tying together national arrangements in each country. (This still requires a pooling of sovereignty, of course).
Such an international framework might be 'Contraction & Convergence', as proposed by Aubrey Meyer and the Global Commons Institute (see Links). This is a way of apportioning entitlements to carbon emissions between countries. As our carbon emissions contract, countries converge to equal per capita shares of entitlements over the whole world.
Different countries might adopt different systems to meet their national allocations. Some countries might choose C&S, and others might choose upstream auctions, say.
C&S resonates with Contraction & Convergence. Under C&S in a country, your certificate is your equal share of the nation's carbon footprint. Under Contraction & Convergence it would also come to be your equal share of the world's carbon footprint.
GDRs
Global Development Rights (GDRs) (see Links) are an elaboration of Contraction & Convergence. This system takes into account several factors in a more complicated way, explicitly looking at development needs, and income distribution within countries. These benefits come at the cost of making for a more complicated system, whereas simple frameworks like C&C are perhaps more powerful in focussing minds on getting agreement.