Emission trading schemes limit green consumerism

Jan 29, 2013

Schemes that aim to regulate greenhouse gas emissions can limit consumers' attempts to reduce their carbon footprints, according to an economist at the University of East Anglia (UEA).

Dr Grischa Perino suggests that some recommendations made by government agencies and environmental NGOs about how individuals can reduce GHG emissions are inappropriate in the European Union because of its System (EU ETS), which caps emissions from certain industries, such as electricity production and aviation, and allows regulated sources to trade emission allowances.

Advice commonly given to consumers includes reducing the number of flights taken, replacing energy-hungry appliances and lightbulbs with energy efficient ones and eating less red meat.

But in a discussion paper published today by UEA's Centre for Behavioural and Experimental Social Science, Dr Perino says that once the EU ETS cap is in place, installing energy efficient lightbulbs, flying less and some other recommended actions have no impact on total emissions, as they are simply relocated to other sources via the system's trading mechanism. He claims that out of the above examples only eating less meat reduces total emissions, because in contrast to electricity production and aviation, emissions from agriculture are not covered by the EU ETS.

"Buying energy efficient appliances still makes a lot of sense as they often save more on than the extra cost incurred in buying them and it reduces other forms of , but it does not reduce greenhouse gas emissions," said Dr Perino, an environmental economist in the School of Economics and member of the Centre for Social and Economic Research on the Global Environment (CSERGE) at UEA.

He argues that understanding what polices such as the EU ETS cover is crucial for individuals wanting to contribute to reducing their carbon footprint, otherwise their efforts can "backfire".

"Consumers who want to reduce the of their consumption and lifestyle should focus on reducing emissions not regulated by the EU ETS, such as road transport, agriculture and other sectors with low energy intensity," he said. "Driving your car less, eating less red meat and improving the insulation of your home substantially reduces your carbon footprint. These unregulated sectors make up more than half of GHG emissions in participating countries and reducing those emissions is important."

The EU ETS is the biggest international system for trading GHG emission allowances and a cornerstone of the EU's policy to combat climate change. Under this so-called cap and trade scheme, emissions by one regulated source can be offset by another and firms that hold more emission allowances than they need can sell these to other firms, which in turn use them to increase their own emissions.

However, Dr Perino says that while this scheme reduces , it only does so because the cap is lower than the amount regulated sectors would emit in its absence, adding: "The two regional cap and trade schemes in North America, the Regional Greenhouse Gas Initiative and the Western Climate Initiative, follow the same basic design and similar results hold for them, as will be the case for the Australian scheme once it is transformed from an emissions tax into a cap and trade scheme in 2015."

Dr Perino recommends that to reduce emissions in EU ETS sectors such as , people should put pressure on politicians to reduce the cap of the EU ETS. They can also buy and 'retire' , thereby having a direct impact on emissions.

He suggests that carbon footprint labels measuring the life-cycle emissions of a product do not give consumers helpful guidance on how to reduce actual emissions, because they do not differentiate between emissions covered by the EU ETS and those that are not

"My analysis shows that basing decisions to reduce carbon footprints on both regulated and unregulated emissions, as recommended by government agencies, NGOs and established carbon footprint labels, can increase total emissions," said Dr Perino, whose findings are based on a mathematical model of consumption choices.

"For example, if you consider making a trip from London to Glasgow, flying has higher physical GHG emissions than a coach journey. However, additional emissions of flights are fully offset by the EU ETS, even without buying the offsets offered by most airlines when buying tickets, while those of the coach are not and therefore are additional. Surprising as it may sound, going by coach increases total emissions more than flying."

Commenting on the paper Prof Ian Bateman, director of CSERGE, said: "This is an interesting and useful study which highlights important implications of the EU ETS. It underlines a simple principle; when designing any regulation one has to recognise that individuals always react to changing conditions. The skilled regulator needs to anticipate that reaction from the outset and design any regulation with that in mind."

Prof Corinne Le Quéré, director of UEA's Tyndall Centre for Climate Change Research, which works to develop sustainable responses to climate change, urged consumers to continue their efforts to reduce their carbon footprint. "It is critical that we significantly reduce our carbon emissions to tackle climate change," she said. "Reducing our individual energy use, particularly that of our travel, our houses, and our appliances, is the quickest and easiest way to reduce our own carbon emissions. This discussion paper takes a viewpoint at the level of individuals on the consequences of the European Trading scheme, which operates for industry. I strongly urge people to pursue their efforts to reduce their , whether they live within Europe or within any other industrialised economy."

Explore further: Predicting bioavailable cadmium levels in soils

More information: The discussion paper, entitled "Private provision of public goods in a second-best world: cap and trade schemes limit green consumerism", by Dr Grischa Perino will be published by the Centre for Behavioural and Experimental Social Science on Wednesday, January 30.

add to favorites email to friend print save as pdf

Related Stories

EU ready to suspend CO2 air travel tax for a year

Nov 12, 2012

The European Union executive on Monday offered to "stop the clock" on its controversial carbon tax on air travel by suspending the measure for a year on flights to and from non-European nations.

EU should scrap airline emissions tax: IATA

Jul 25, 2012

The European Union should scrap a controversial carbon tax on air travel and seek a global solution to the emissions problem, the global aviation industry's chief said on Wednesday.

EU backs climate change measures

Mar 05, 2008

The European Union has voted to support climate change proposals to cut emissions and increase energy efficiency.

Recommended for you

Predicting bioavailable cadmium levels in soils

14 hours ago

New Zealand's pastoral landscapes are some of the loveliest in the world, but they also contain a hidden threat. Many of the country's pasture soils have become enriched in cadmium. Grasses take up this toxic heavy metal, ...

Oil drilling possible 'trigger' for deadly Italy quakes

18 hours ago

Italy's Emilia-Romagna region on Tuesday suspended new drilling as it published a report that warned that hydrocarbon exploitation may have acted as a "trigger" in twin earthquakes that killed 26 people in ...

Snow is largely a no-show for Iditarod Trail Sled Dog Race

18 hours ago

On March 1, 65 mushers and their teams of dogs left Anchorage, Alaska, on a quest to win the Iditarod—a race covering 1,000 miles of mountain ranges, frozen rivers, dense forest, tundra and coastline. According ...

UN weather agency warns of 'El Nino' this year

19 hours ago

The UN weather agency Tuesday warned there was a good chance of an "El Nino" climate phenomenon in the Pacific Ocean this year, bringing droughts and heavy rainfall to the rest of the world.

Study shows less snowpack will harm ecosystem

19 hours ago

(Phys.org) —A new study by CAS Professor of Biology Pamela Templer shows that milder winters can have a negative impact both on trees and on the water quality of nearby aquatic ecosystems, far into the warm growing season.

User comments : 0

More news stories

UN weather agency warns of 'El Nino' this year

The UN weather agency Tuesday warned there was a good chance of an "El Nino" climate phenomenon in the Pacific Ocean this year, bringing droughts and heavy rainfall to the rest of the world.

Patent talk: Google sharpens contact lens vision

(Phys.org) —A report from Patent Bolt brings us one step closer to what Google may have in mind in developing smart contact lenses. According to the discussion Google is interested in the concept of contact ...

Tech giants look to skies to spread Internet

The shortest path to the Internet for some remote corners of the world may be through the skies. That is the message from US tech giants seeking to spread the online gospel to hard-to-reach regions.

Wireless industry makes anti-theft commitment

A trade group for wireless providers said Tuesday that the biggest mobile device manufacturers and carriers will soon put anti-theft tools on the gadgets to try to deter rampant smartphone theft.