Personal carbon allowances - Can we make a start?

A guest post by Ian Smith, a renewable energy consultant

I believe that some form of personal carbon allowance, at least from an ethical perspective, is something that we should be striving for.  However, I have no illusions about the difficulties involved in implementing any such scheme nationally, let alone internationally.  Leaving aside the political barriers, even with the internet, the transaction costs look like quite an impediment.  Having looked at a number of these systems, including David Fleming's TEQs, I started to think how one might run a much simpler proxy, and possibly as a precursor, for the idea.  I am suggesting that people in the public eye be encouraged to publicize their footprints.  This may seem like a request for them to shoot themselves in the foot (excuse the pun) as most of the people in the public eye (sports people, business people, actors/actresses, politicians and other celebrities) are likely to have higher than average footprints but, if some could be persuaded to do so, and the media encouraged to use the information then public and peer pressure for others to do so could be quite compelling.

How the idea might work:

1. Set up a website where people in the public eye are invited to record their footprint every year. The inputs to the calculation would be confidential but the final footprint number would be in the public domain and available for the general public & media to access and use. The website should include a date stamp with the footprint to advise users on its currency.

2. There should be a specified or dedicated calculator capable of covering international lifestyles. It should include some provision for estimating embedded emissions in goods and services consumed. Note that calculators suitable for the UK may not be suitable for other countries. For example, green electricity tariffs have little true additionality in the UK, but the case may be different elsewhere. Similarly, carbon intensity of electricity varies widely.

3. There should be no provision to credit carbon offsets though these could be recorded as a separate output.

4. Encourage the media to add the person's footprint when introducing (or subtitling) them – so “XX, CEO of YY” becomes “XX, CEO of YY, 25 tonnes”.

The combination of the website and the publicity would have a number of benefits. First, it would put pressure on such people to reduce their footprint year on year. It would, if done professionally, encourage others to publish theirs. It would raise awareness of the gap between individual emissions and sustainable levels and facilitate the understanding of the issue of personal carbon allowances.

Whilst the web site should include information the methodologies used in the calculator(s) and on what constitutes a sustainable level, it would probably detract from its role to include awards (or, indeed, naming and shaming). That should be left to the media. Indeed, this would probably be seen as an incentive by the media to cooperate. The calculator would need to be compromise between accuracy and simplicity to encourage take-up. Since the main purpose of this suggestion is to raise awareness, accuracy is not a prime concern.

When tested on others, this idea has tended to polarize opinion as to its viability. What it needs is a sponsor who believes it is viable with the web skills and media connections to take it forward. Suggestions - or even volunteers - welcome.
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Lies, Damned Lies, and Accounting

I spent a small but significant amount of time yesterday searching for a cost code to justify the spending of 60 pence. I mention this partly, I confess, to get the frustration and rage that caused me to scream in my office and cause consternation to my colleagues out of my system. But also to offer it as an example of how, in an era where the accountant is an unlikely king and accountability is espoused on all fronts, the petty is rigorously enforced whereas fraud on a grandiose scale is routinely ignored.

I am thinking, you will have guessed, of corporate fraud, of the type practised by Enron executives. Inflating the value of your stock by counting money you haven't received or even invoiced for yet. That particular techniques, known as counting 'unbilled receivables' was invested by the leading accountancy firm then called Arthur Anderson. Oil companies also engage in this creative accounting when, as Shell recently admitted it had done, they overestimate the value of their reserves, which, in oil companies terms, is the value of your companies and hence your stock.

It appears that the rule is, the more preposterous the fraud the more unlikely it is that we will notice. As Kierkegaard famously pointed out about Christianity, if you want to get a whole mass of believers you need to create a really big lie. Which brings me to the money system: the biggest example of fraud that it is virtually impossible for us all to avoid. Galbraith pointed out that the gap between one financial collapse and the last is roughly equal to the length of time it takes those who suffered to forget about it. You can find it detailed in economics books, but who is daft enough to wade through those?

So, here is a brief quotation from Galbraith about how the last crash came about:

Speculation begins when a price is going up and the presumptively wise expect a further increase. They buy and thus produced the increase. More buy, and more and yet more are attracted. Each price increase affirms the good sense of those who have bought before. Those who doubt are reviled as creatures of defective imagination. The buying and the supporting mood continue until the available supply of mentally vulnerable, economically viable buyers is exhausted. Then come the changed views of the prospect, the rush to get out, the pressure now of creditors demanding repayment of the loans that financed purchase, thus forcing sale. In short, the crash.

Sound familiar? I wouldn't be taking on too much debt if I were you. If you own bricks and mortar it is still yours after the crash. But if you own debt it will not be very much use to you. Tweet

There's No Way Like the American Way

I spent a small but significant amount of time yesterday searching for a cost code to justify the spending of 60 pence. I mention this partly, I confess, to get the frustration and rage that caused me to scream in my office and cause consternation to my colleagues out of my system. But also to offer it as an example of how, in an era where the accountant is an unlikely king and accountability is espoused on all fronts, the petty is rigorously enforced whereas fraud on a grandiose scale is routinely ignored.

I am thinking, you will have guessed, of corporate fraud, of the type practised by Enron executives. Inflating the value of your stock by counting money you haven't received or even invoiced for yet. That particular techniques, known as counting 'unbilled receivables', was invented by the leading accountancy firm then called Arthur Anderson. Oil companies also engage in this creative accounting when, as Shell recently admitted it had done, they overestimate the value of their reserves, which, in oil companies terms, is the value of your company's assets and hence your stock.

It appears that the rule is, the more preposterous the fraud the more unlikely it is that we will notice. As Kierkegaard famously pointed out about Christianity, if you want to get a whole mass of believers you need to create a really big lie.

Which brings me to the money system: the biggest example of fraud that it is virtually impossible for us all to avoid. Galbraith pointed out that the gap between one financial collapse and the last is roughly equal to the length of time it takes those who suffered to forget about it. You can find it detailed in economics books, but who is daft enough to wade through those?

So, here is a brief quotation from Galbraith about how the last crash came about:

'Speculation begins when a price is going up and the presumptively wise expect a further increase. They buy and thus produce the inrease. More buy, and more and yet more are attracted. Each price increase affirms the good sense of those who have bought before. Those who doubt are reviled as creatures of defective imagination. The buying and the supporting mood continue until the available supply of mentally vulnerable, economically viable buyers is exhausted. Then come the changed views of the prospect, the rush to get out, the pressure now of creditors demanding repayment of the loans that financed purchase, thus forcing sale. In short, the crash.'

Sound familiar? I wouldn't be taking on too much debt if I were you. If you own bricks and mortar it is still yours after the crash. But if you own debt it will not be very much use to you. Tweet