Shoppers, grab your carbon credit
One day, your wallet might hold not just your credit, debit and department store loyalty cards. It might also hold a carbon card. One day, you might be worrying not just about how much money is in your bank account, but also how much is in your carbon account.
Every time you fill up at a petrol station, every time you pay your electricity bill, you will be grumbling not just about the price of fuel or power, but about the price of carbon.
In this future world carbon will be the currency you need to pay for your contribution to greenhouse gas pollution.
You will be allotted a "free" amount of carbon to spend on electricity, petrol or air travel. If you exceed your account you will have to buy carbon from someone else or go without.
Radical though it might sound, it is a concept being taken seriously in Britain by both the Labour Government and the Tory Opposition as they try to outbid each other in the climate change stakes.
The British Secretary of State for the Environment, David Miliband - tipped by some to be the country's next prime minister - wants to test a scheme under which all British citizens would be issued an identical annual carbon allowance, stored as points on an electronic card. Points would be deducted at the point of sale for every purchase of non-renewable energy, according to reports in the British media.
If holders do not use their full carbon allotment - say, because they used public transport instead of a car or took domestic holidays instead of flying overseas - they would be able to sell their leftover points.
The idea of individuals being held directly responsible for their greenhouse gas emissions is being taken so seriously in Britain that the Conservative Opposition wants to apply it to the airline industry. It has proposed a series of taxes on flights, including a fuel duty.
The aviation industry makes an increasing contribution to climate change because a boom in discount airlines has spurred a sharp rise in the number of flights taken by Europeans. In Britain, if aviation continues to grow at present rates, the Government will fail to hit its target of cutting greenhouse gas emissions by 60 per cent by 2050.
Across the European Union, greenhouse gas emissions fell 3 per cent from 1990 to 2002, but emissions from international aviation increased almost 70 per cent.
Britain's shadow chancellor, George Osborne, says the planned taxes would target frequent fliers rather than families taking their annual holiday. He is also considering replacing the air passenger duty with a "per flight" tax based on carbon emissions. The further you fly the more you would pay.
But carbon taxes on flights or limits on how many kilometres you fly every year are only the tip of the iceberg. The more radical proposals are from Miliband, who describes the personal carbon account as a "compelling thought experiment".
He says the underlying principle would be an environmental contract between government and all sectors of the community - businesses and individuals - that balances paternalism and individual freedom.
Carbon accounts for all those sectors would be based on a national carbon inventory and scientifically set targets for cuts to emissions.
"To help reduce carbon emissions, the government would set limits on the amount of carbon that could be used," he said last year. "Imagine your neighbourhood. Each neighbour receives the same free entitlement to a certain number of carbon points. The family next door has a sports utility vehicle and realise they are going to have to buy more carbon points. So instead they decide to trade in the SUV for a hybrid car. They save 2.2 tonnes of carbon each year. They then sell their carbon points back to the bank and share the dividends of environmental growth.
"The granny next door doesn't drive and doesn't do much air travel. So she has spare carbon points that she can sell. But she doesn't want to be handling two currencies, so she cashes in all her carbon permits as soon as she receives them. When she pays her electricity bill, her energy company builds in the price of carbon to her total bill. She simply pays carbon as she uses it. At the end of the year she finds herself better off."
The concept is not without its difficulties.
The former NSW premier Bob Carr this week described the personal carbon account as an exciting concept but warned of the risk of social inequity.
"Let me say very quickly there are a lot of difficulties with this idea, a lot of difficulties of treating people who live in rural NSW and have to travel, by necessity, long distances by motor vehicle [compared with] someone who lives in the city and has access to public transport."
Other problems could be the administrative complexity of a system that keeps track of all citizens' carbon accounts, and the costs that would be imposed on business. Who will pay for new point-of-sale systems in petrol stations and travel agents that accept the carbon cards? Will the public accept such a scheme? And will it hit the poor hardest because they cannot not afford to top up their carbon accounts? Will the carbon-poor be forced into desperate measures, like going without heating in winter?
In Australia, a limit on how much petrol you could buy, without paying an extra carbon cost, would possibly hit the poor hardest, and those not served by public transport.
But Miliband says work done by Britain's Tyndall Centre for Climate Change Research indicates a personal carbon account could be more equitable than at first thought, and in the long term more effective than standard types of tax and regulation. There is also plenty of evidence to show rich people often generate far more greenhouse gas emissions and have a larger environmental footprint than poor people.
"It could be more equitable because instead of tax increases, which hit all consumers of products, personal carbon allowances provide free entitlements and only offer financial penalties for those who go above their entitlement," Miliband says.
"People on higher incomes tend to have higher carbon emissions due to higher car ownership and usage, air travel and tourism, and larger homes. People on low incomes are likely to benefit as they will be able to sell their excess allowances."
The scheme would offer people the choice on how to spend their carbon share. No particular product or activity would be banned, or taxed more heavily than any other. Consumers instead would decide their own trade-offs, for example forgoing an overseas holiday and the hefty carbon penalty it will carry to instead maintain carbon credits for day-to-day car use.
The idea is similar to emissions trading schemes that let the market choose the cheapest and most effective way of cutting emissions, rather than governments deciding what we can and cannot do.
It's all about regulating the outcome, not the means of achieving it, Miliband says.