Fuel rationing may be needed by 2020 in the U.K. to meet the government’s carbon emission targets, a panel of lawmakers said, suggesting an electronic trading system for energy quotas.
Under the system, called Tradable Energy Quotas, or TEQs, energy credits would be distributed free to every adult, who could then buy and sell surplus units, the London-based research group The Lean Economy Connection said today in a report commissioned by the All Party Parliamentary Group on Peak Oil. The multi-party panel of lawmakers looks at the impacts of declining fossil-fuel production.
The system would help guarantee the U.K. meets its target to reduce carbon emissions by 80 percent by 2050 from 1990 levels, according to the study. At the same time, it would ensure everyone has access to energy at a time when fossil fuels may become more scarce, it said.
“The only way of keeping energy prices as low as possible in a time of constrained supply is to reduce demand, and that’s what TEQs do,” Shaun Chamberlin, a co-author of the report, told journalists today in London.
Under the system, energy consumers would have to pay their normal energy bills, as well as having to surrender a certain amount of TEQs, depending on the carbon content of the fuel they are buying. Fewer TEQs would be needed for electricity from wind and solar power than from coal- and gas-fired power stations.
Credit Card Payments
John Hemming, chair of the parliamentary panel, said a payment system could involve a credit card with two numbers -- one linked to the customer’s bank account and another to their energy TEQs account. The system would help level out price changes, because the value of TEQs would decline as energy prices rise, said Chamberlin.
“If there’s a spike in oil prices, demand for energy drops, and as demand drops, the price of TEQs go down,” Chamberlin said. That would counterbalance some of the increase in energy price, he said.
Caroline Lucas, leader of the U.K. Green Party and vice chair of the panel, said in an interview that using the tradable quotas would place a cap on emissions that gives more certainty to achieving greenhouse gas goals than existing measures.
“It’s the most equitable way and the most certain way that we have to make sure we can meet our emission reduction targets,” Lucas said. “We need to put in place mechanisms that will guarantee we can meet and in fact exceed them,” she said, referring to a goal enshrined in U.K. law to slash emissions by 34 percent by 2020. She says it should be higher.
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