Popular - positively compensates the public for
higher energy prices

As the cap is tightened year by year, the price of Production Authorisation Permit (PAP) entitlements will rise as oil, coal and gas suppliers compete to buy the reduced tonnage from the banks so as to be able to produce or import carbon fuels and sell them to their customers.

Naturally, the energy suppliers will have to pass the extra cost of the entitlements they have bought on to their customers by raising the prices of the fuels they sell. In other words, energy prices will go up. This is necessary in a market economy as it encourages people to save energy and also to ensure that the limited amount of fossil energy that can be used goes to the most valuable uses.

However, because every activity in a modern economy involves some energy use, the higher cost of fossil energy will put the price of everything up. In other words, the cost of living will rise. However, the great thing about Cap and Share is that the price that one will get for one's entitlement will go up in step with the rising cost of living. If you are using the average amount of fossil energy – either directly or embodied in the products you buy – you will be fully compensated for the rise in your cost of living by the extra money you get when you sell your entitlement.

And anyone who can organise their life so that they can live on less energy than the average person will come out better off.