This section of the website is designed to help people explore their questions, clear up some common misconceptions about TEQs, and bring readers up-to-date with the latest thinking and research on TEQs since the publication of
Energy and the Common Purpose.
Many of the answers here build on that text (freely downloadable here), and it is strongly recommended that you read that first to gain an understanding of the TEQs model.
If there are further questions or topics you would like to see addressed here, please raise them in the TEQs Forum (hosted by PowerSwitch).
What is the progress towards seeing TEQs implemented in the UK?
Why is TEQs an improvement over the conventional carbon tax?
What is the progress towards seeing TEQs implemented in the UK?
Although David Fleming first proposed the scheme in 1996, it has developed an increasingly high political profile over recent years, with expressions of interest from successive Secretaries of State for the Environment, as well as from senior Conservative politicians. The Climate Change Act, which became law in November 2008, does grant powers allowing the Government to introduce TEQs at a later date without further primary legislation, but in practice further legislation would almost certainly be used due to the wide-ranging significance of the scheme for the national economy. Clearly public opinion and many political factors will influence the decision on such a move, which is why The Lean Economy Connection is working to spread understanding of the scheme as widely as possible. The Climate Change Act mandates 80% emissions cuts by 2050, but we see no way that those targets can actually be achieved without a framework like TEQs.
Responsibility for investigating TEQs has now passed from the UK Government's Department for Environment, Food and Rural Affairs (DEFRA) to the Department for Energy and Climate Change (DECC), but DEFRA's initial scoping study (published November 2006, and available from our TEQs links page), concluded that a personal carbon allowance and trading system has the potential to achieve emissions savings in a fairer way than carbon taxes, and would reward people for leading low-carbon lifestyles.
Accordingly, DEFRA went on to fund a number of research projects as part of a pre-feasibility study into the implementation of TEQs. This concluded in May 2008 and full details of their findings can be found on our TEQs links page. While we welcomed this additional research in the field, we believe that a number of important misunderstandings are contained in the study, and that DEFRA's consequent decision to delay a full feasibility study into the TEQs scheme is ill-advised in the absence of other realistic and effective means for addressing climate change and fuel depletion. Our detailed critique can be viewed here (PDF format), and also sits alongside other critical responses from the UK Parliament's Environmental Audit Committee and the Centre for Sustainable Energy on our TEQs links page. We are continuing to participate in the ongoing academic and political discussions required to bring TEQs to fruition.
A more detailed breakdown of developments regarding TEQs over the past few years, with links to additional information, can be found on the website of our TEQs Development Director here.
Isn't TEQs just rationing by another name?
The word rationing contains two intertwined meanings. The first is guaranteed minimum shares for all, the second is limits to what people are allowed to consume. Many of us resent the second, but in times of shortage we cry out for the first.
TEQs are rationing in the first sense as they guarantee minimum shares for all, but they are not rationing in the second sense as they allow individuals to exceed their basic Entitlement (if they are willing to pay those who do not for the privilege).
The purpose of TEQs is not to limit the consumption of individuals per se, but rather to share out fairly the shrinking energy consumption required by our national carbon budget, and to allow maximum freedom of choice within that.
Without a TEQs system these resources would simply go to the richest, leaving less well-off individuals and groups without any ability to secure the energy needed for life. With TEQs everyone is guaranteed a basic Entitlement, and those who use a below-average amount of energy would also gain an income by selling unneeded TEQs units to higher consumers.
Won't TEQs require that everyone becomes a proficient trader in TEQs units - and isn't that unrealistic?
That might well be unrealistic, but the TEQs scheme requires nothing of the sort.
TEQs is designed as a 'hands free' scheme, with the majority of transactions automated and requiring no extra time and effort at all. Since TEQs units are only required for direct purchases of energy, utility bills and fuel purchases are likely to be most people's main direct engagement with the scheme. Utility bills are already easily paid by direct debit, and the TEQs cost of fuel purchases could either be paid together with the cash cost via a credit card linked to an individual's TEQs account, or a separate TEQs card could be carried and swiped alongside the money transaction. If an individual needed to buy additional TEQs units the cost of these would simply be added to their bill at the point of energy purchase.
So while people would be aware of the limits set on the national economy and the need for energy thrift, the practicalities of the TEQs scheme itself would not trouble them at all.
Why do I sometimes see TEQs referred to as DTQs?
When David Fleming first published an outline of the scheme in 1996 he used the name DTQs (Domestic Tradable Quotas). This was later changed to TEQs (Tradable Energy Quotas) due to confusion caused by the word "domestic" in the original title. While intended to distinguish the scheme from international trading schemes, it was often misinterpreted to imply that the scheme covered only household emissions, rather than the entire national economy.
Isn't it simpler to limit carbon emissions 'upstream' (via the energy suppliers) rather than 'downstream' (via the energy consumers)? That way you only have to regulate and involve a relatively small number of companies, rather than every individual in the country.
At first sight this seems a convincing argument. However, 'upstream' regulation fails in one important regard - it does not engage the general populace in the changes required. While this might seem a benefit in terms of simplicity it means that the fundamental changes required in society are not going to happen. Energy suppliers alone are not going to be able to implement the Lean Energy transformation needed (see pp. 23-24 of booklet), we need every citizen to see the need to change the way we live, work and play.
Shaun Chamberlin, our TEQs Development Director, has written a detailed piece on this on his personal website.
TEQs actually provide the best of both worlds - they do encourage the entire population to 'own' the problem and respond to it accordingly, but without creating a complicated system for those individuals to grapple with. The calculations required by the rating system are indeed done upstream in order to simplify matters, so individuals are only faced with simply priced energy choices rated in terms of carbon intensity.
If TEQs were implemented in one country, wouldn't there be a problem with the embedded energy/emissions in goods imported to that country? If these aren't accounted for wouldn't this give an advantage to unregulated foreign producers?
Ideally there would be a TEQs scheme in each nation, which would mean that embodied emissions would always be accounted for within a robust national budget. However, given that TEQs will almost certainly be implemented by some nations before others, import tariffs will be necessary to ensure that domestic producers are not disadvantaged. This was regarded as politically unthinkable until recently, but as the President of the European Commission shows in this article, that is no longer the case.
He argues that there are only two alternatives to simply ignoring the problem of climate change:
i) global agreement
or
ii) tariffs on those who do not do their part
There is of course a third option - allowing domestic industries to suffer in those countries that act responsibly, but that is even more unthinkable than tariffs.
Some have argued that the World Trade Organisation (WTO) would never allow such tariffs, but interestingly the New Economics Foundation extracted an admission from Pascal Lamy (then at the European Commission, now Director-General of the WTO) that the EU would be within its rights to pursue that course of action. This was as part of the work producing their report
Free Riding on the Climate: The possibility of legal, economic and trade restrictive measures to tackle inaction on global warming.
Also, as this article highlights, the central piece of global warming legislation now before the US Congress would "levy punitive tariffs on greenhouse-gas-intensive products imported from countries that lack 'comparable action' to that of the US, starting in 2020". Industrial lobbies and labor unions are pushing hard for these sanctions to take effect more quickly.
With the President of the European Commission, the French President and industrial chambers of commerce all strongly advocating a similar tariff system, many analysts predict that the EU will adopt some form of green tariff system in the coming years.
I am a firm believer in technology, and the exciting improvements in efficiency/solar/wind/nuclear fusion/tidal/biomass etc will overcome both climate change and energy resource depletion anyway, so TEQs solves a non-existent problem!
If so then no-one would be more delighted than us. But there is no contradiction here - if there are energy sources or improvements in efficiency so potent that they will solve all our problems then the social framework and incentive structure provided by TEQs will help push the development and implementation of such ingenious solutions to happen even more quickly.
Isn't this just another way for the Government to interfere with our personal choices and personal lives? After taxes on air flights and rubbish bins that watch what I put in them this really is the last straw.
Quite the opposite. TEQs allows individuals and organisations to make their own choices about what is important to them. You can still choose to be profligate in your energy use, but you will have to pay those who do not for the privilege. On the other hand, if you reduce (or have already reduced) your energy usage, you will be rewarded in line with the wider benefits your actions bring. The TEQs scheme also ensures that as a nation we are dealing with the greater issues of climate change and resource depletion, and so ensures that more draconian measures - which could well severely constrain personal freedoms - are not required.
Why is TEQs an improvement over the conventional carbon tax?
In the 3rd edition of Energy and the Common Purpose (available here) pages 32-35 clearly outline twelve significant benefits of TEQs over taxation.
If there are further questions or topics you would like to see addressed in this section, please raise them in the TEQs Forum (hosted by PowerSwitch).
