Personal Carbon Budgeting: What People Need to Know, Learn and Have in Order to Manage and Live Within a Carbon Budget, and the Policies that Could Support Them?

This working paper explores what people may need to know, learn and have if aPersonal Carbon Allowances (PCA) scheme was implemented, and suggests ideas forpolicies, programmes and initiatives that could support them. A PCA scheme impliesthat individuals would have a personal budget of carbon credits, which they wouldneed to manage, to some extent, in order to stay within its limits, and in the bestcase scenario earn some money by selling not-needed carbon credits. Thus, thispaper looks at the budgeting process from the carbon account holders view pointand applies insights from how people budget under monetary and non-monetaryconstrains to the study of PCA. It also highlights related policy design issues.

The paper is composed of two sections. The first sets PCA in the policy contextalongside other existing and proposed emissions reduction policies. Next it explainsthe mechanisms through which PCA supposes to change energy demand behaviourand then describes the current discourse surrounding PCA in the UK. The secondsection lays out the rational for examining PCA through the lense of budgeting andpoints at questions arising from the concept of living within a carbon budget. It then discusses in detail the prerequisites for carbon budgeting, which include: setting the budgetary limits; knowing personalised carbon income and expenditure; having low carbon alternatives; having the opportunity to perform low carbon choices; receiving advice and support; and learning how to trade. This is followed by a short concluding section.