by Kurt Rempe [e-mail]

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by Kurt Rempekurtrempe_at_yahoo.com
Domestic
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The progressive approach to curbing greenhouse
gas emissions
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What are domestic tradable carbon quotas?

• Domestic tradable carbon quotas (DTQs) or
  personal carbon trading is a cap and trade
  system for the reduction of greenhouse gas
  emissions from individual consumers.
• It is similar to the EU emissions trading scheme
  for corporations or the voluntary Chicago Climate
  Exchange.

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How does it works?

• A federal agency will set an annual carbon budget
  based upon an international treaty.
• global problem global solution
• Individuals receive a free and equal per capita
  annual carbon allowance loaded onto debit cards.

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Using carbon credits

• Carbon credits are subtracted from the debit card
  when the individual makes a carbon energy
  purchase.
• 1. at the pump 2. when purchasing airline
  tickets (public ground transport is
  excluded)
• 3. when paying 4. and for any other
  activity which involves
• utility bills fossil fuels

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• Power and fuel created by fossil fuels are
  assigned a carbon rating.
• Fuel that creates less quantities of ghg
  emissions will require less carbon credits.
• Promotes clean coal technology
• Promotes natural gas, biodiesel and ethanol
• In addition, companies which off set their carbon
  emissions can sell a less carbon costly product
  to consumers.
• Promotes carbon sequestration
• Promotes reforestation

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Selling carbon credits

• Individuals who exceed their carbon credits must
  purchase additional credits on the carbon market.
• Carbon cutter can sell unused credits to carbon
  guzzler.

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Purchasing Carbon Credits

• Carbon credits can be purchased directly at the
  point of sale.
• The cost-per-credit is determined by the going
  per credit rate on the carbon market.
• Similar to exchange rates for foreign currencies.
• Allowing customers to purchase carbon credits at
  the point of sale allows visitors to the U.S.,
  who do not have a carbon debit card, to purchase
  airline tickets, and fuel.

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Trading carbon credits

• Individuals who have excess carbon credits may
  trade them on the carbon market.
• Carbon credits may be traded
• Online
• Over the phone
• Automated trading at the point of sale

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Questions?

• Is it necessary to implement a personal carbon
  trading system?
• Are there other less intrusive options?
• Is it possible to implement a personal carbon
  trading system?
• Political problems
• Practical problems

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Can technology solve the problem?

• Is this really an economic problem?
• Is it foolish to focus on carbon trading or
  carbon tax schemes?
• Can we solve this problem through technology?
• Are people simply unwilling to cut-back on carbon
  usage?
• Why should they if technology can make the
  necessary carbon cuts for us.

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Ari Fleischer's words in May 2001, explaining the
president's view that our energy needs should be
addressed by expanding supply, not by managing
demand

• The president believes that high energy
  consumption is an American way of life, and that
  it should be the goal of policy makers to protect
  the American way of life. The American way of
  life is a blessed one, he said.

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Technology alone cannot solve the climate change
problem it created?

• In contradiction to what environmental skeptics
  often say, technology alone will not solve all
  problems. says Prof. Jacqueline McGlade,
  Executive Director of the European Environment
  Agency
• Are there technologies that we can implement in
  the near term to power our cars, and fuel our
  jets?
• Will these technologies be cost prohibitive for
  consumers?

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Why should we implement a carbon trading system?
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• Effective
• Guarantees necessary carbon emission cuts.
• Equity
• Everyone is given an equal carbon share.
• Those who have a small carbon foot prints can
  benefit financially.
• Appeals to people not only as consumers but as
  citizens as well.

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• Efficiency
• Promotes efficient energy consumption through
  market pressures.
• Promotes carbon literacy among the population
  and a demand for low carbon alternatives.
• Gives incentives to creative ways to reduce
  carbon emissions.

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A personal carbon trading system is needed now!
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• World energy demand is rising.

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U.S. energy demand is high and continuing to rise.
Oil consumption per capita per barrel of oil each
day (darker color more oil consumption)
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The majority of ghg emissions come from
residential energy use and personal
transportation.
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(No Transcript)
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The number of households in the U.S. is
increasing.

• The size of U.S. homes is growing.
• New construction of single family homes has grown
  consistently since WWII
• The size, in square footage terms, of home in the
  U.S. in growing.
• Americans are using more air conditioning.
• The number of homes in the U.S. with air
  conditioning has tripled in the past 25 years.
• Americans are using more and larger appliances.

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Personal carbon use is the main factor in causing
global warming.

• Personal carbon use makes up over half of all ghg
  emissions
• Personal carbon consumption is outpacing
  industrial carbon consumption 2 to 1.

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Global warming is causing major environmental
problems.
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The proof is indisputable
85 of Americans believe global warming is
occurring
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High carbon usage is causing other major
environmental problems besides global warming.

• Air pollution
• Air pollution from electric generation and
  automobile emissions
• Water pollution
• Acid rain from electric generation

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High carbon usage is leading to a lower quality
of life.

• Traffic congestion
• Urban sprawl and leap frog development
• Loss of wildlife habitat

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High carbon consumption and reliance on the
automobile is leading to a loss of community and
destroying scenic areas.
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Energy dependence is forcing us to look for
energy in pristine environmentally sensitive
locations.
Artic National Wildlife Refuge
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Reliance on fossil fuels supports countries which
fund terrorists!
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The U.S. has strained relations with almost all
the countries which control international oil
prices.
OPEC MEMBERSHIP COUNTRIES
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High carbon dependence is leading the U.S. into
wars we cant win.
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Barriers to implementing a personal carbon
trading program
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Is there the political will to implement any
carbon reduction scheme?

• Participation in the Kyoto Protocol (non
  participating countries are in red).

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Is there the political will to implement a
personal carbon trading scheme in the U.S.?

• .

VS
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Attitudes are changing, people want action on
climate change from their elected officials.

• Al Gores documentary the Inconvenient Truth was
  widely popular and spurred public debate.
• Evangelical Christians, which form a significant
  part of the Republican base are demanding
  government action to protect the environment.
• Democrats are poised to take back the White House
  in 2008.

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Does it even matter?
Developing countries are increasing their carbon
output and unwilling to cut back on carbon usage.
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It may be too late to reverse the damage already
done.
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Should we give up now?
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Why we need DTQs

• To tackle climate change we need a major
  transformation in the way we think about energy.
• There are limitations in the ability of renewable
  energy sources to make needed CO² cuts.

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Guarantee

• A Carbon tax does not give a guarantee that a
  particular reduction will occur, a carbon quota
  does.
• To avoid catastrophic climate change ghg
  emissions must be reduced between 60 - 80

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The domino effect through the supply chain

• Carbon quotas forces consumers to make needed
  changes
• Hybrid cars
• Public transportation
• Green roofs
• Better insulation
• Energy efficient appliances
• Renewable power
• Car pooling

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A carbon quota will promote reliance on mass
transit, hybrid cars, and renewable energy.
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Are the people with the largest carbon footprints
really paying for the damage they are inflicting
on the environment?

• Heated parking garages
• Outdoor heated swimming pools
• Large powerful cars
• Private jets
• Large yachts
• Multiple homes

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Discourage wasteful consumption
High carbon usage will be frowned upon with a
carbon quota.
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Personal Carbon Trading is not a gimmick
Problems with carbon-offset programs
1. unregulated 2. do not require any
meaningful sacrifice 3. allow wealthy
consumers to sacrifice dollars for deeds
4. do not guarantee actual carbon cuts
5. unregulated
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Practical problems with personal carbon trading.
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• Problems
• The rural population is poorer and needs more
  carbon credits.
• Should the rural population receive carbon
  subsidizes?
• States with extreme climates need greater carbon
  allowances.
• Should citizens of Alaska receive a larger carbon
  allowance?
• Will carbon quotas discourage growth and harm the
  economies of Las Vegas and Phoenix?
• Public resentment to the program.
• Scheme must be simple to use and understand, and
  be perceived as fair and necessary.

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• Problems
• Costs to implement the system.
• Who is going to pay for?
• Carbon debit card readers
• Carbon statements
• Carbon gas pumps
• Will retailers and consumers except higher
  transaction costs to comply with the carbon quota
  system?
• Smart receipts - carbon advertising
• Smart bills - carbon-rated homes
• Carbon labels - Carbon-ometers
• Are countries without quota systems going to be
  at a competitive advantage?

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• And more problems
• Is Personal Carbon Trading too difficult to
  understand?
• Over time people will learn-by-doing.
• Those that find the system too difficult,
  frustrating, or simply do not want to take part
  can sell all their carbon credits immediately
  upon receipt and purchase all carbon units at the
  point of sale.
• Will people make a genuine effort to learn and
  participate in the system because they feel
  empowered by a system that gives them autonomy,
  and appreciate a system that places the onus on
  the person best situated to act?

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Is it legal?

• Do carbon quotas infringe upon civil liberties?
• Is there a disparate impact on carbon hungry
  consumers?
• Rural vs. Urban
• Do DTQs infringe on peoples privacy
• Will the quota scheme be successfully challenged
  in court?
• Is the quota scheme any different than a carbon
  tax?
• Is the quota scheme un-American?

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Is personal carbon trading fair?
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Equity

• Personal carbon trading is fair.
• Everyone gets an equal share.
• Children get their own share to start thinking
  about climate change early and so that families
  are not carbon poor.
• Not everyone can afford to pay a carbon tax.
• People with higher incomes tend to use more
  energy, so they can afford to pay for it.
• People in rural areas have more access to
  alternative sources of energy.
• Older people can sell credits they dont use
  source of retirement income.

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Additional practical problems

• Technical feasibility
• Is it possible to enroll 300 million people into
  personal carbon trading system?
• Is it cost prohibitive to maintain a central data
  base that holds carbon accounts and tracks carbon
  unit transactions?
• Potential for carbon debit card fraud
• What to do when foreign visitors (who do not have
  a carbon debit card) wish to purchase gas in the
  U.S.
• What happens to people who go over their carbon
  allowance and cannot afford to purchase carbon
  credits at the market rate? Do they go without
  heat?

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Danger of carbon speculation on the carbon market
lead?
Will individuals and corporations manipulate the
fledging carbon trading market?
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The future of personal carbon trading?
Is personal carbon trading a genuine possibility?
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The future of personal carbon trading.

• British Secretary of the Environment David
  Miliband has endorsed a carbon trading program.
• The European Union has started a mandatory cap
  and trade carbon cutting scheme for corporations.
• The Chicago Climate Exchange has started a
  voluntary cap and trade system for corporations.

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What do you think?

• ?

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Is there any other way?
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Further reading

• "How We Can Save the Planet" by Mayer Hillman,
  with Tina Fawcett, Penguin Books, 2004
• Domestic Tradable Quotas A policy instrument for
  reducing greenhouse gas emissions from energy
  use, Tyndall Centre for Climate Change Research,
  Richard Starkey and Dr. Kevin Anderson
• Taxing and Trading Debating Options for Carbon
  Reductions (2005) http//www.ukerc.ac.uk/content/v
  iew/110/57
• The Suicidal Planet our last chance to prevent
  climate catastrophe. Thomas Dunne, St. Martins
  Press

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