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Question: Do you support this policy suggestion?
A - indicates you like this suggestion and it should be developed further. - 2 (50%)
B - indicates you think this issue is important, but the approach is wrong. - 2 (50%)
C - indicates you think this suggestion is not suitable for inclusion in SP. - 0 (0%)
D - indicates you need further information to understand the suggestion better before you can give your view. - 0 (0%)
Total Voters: 4

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Author Topic: Overview and vote: Tradable Energy Quotas  (Read 4442 times)
simpolukadmin
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« on: May 28, 2007, 04:13:52 PM »

Title: Tradable Energy Quotas

Proposer: Shaun Chamberlin shaun@theleaneconomyconnection.net

Summary: A tradable energy rationing system which addresses both climate change and energy-resource depletion, and allows countries to guarantee meeting their commitments under international frameworks such as the Oil Depletion Framework or Contraction and Convergence. Every adult receives an equal free Entitlement of TEQs units. Industry and Government bid for their units at a weekly Tender, thus setting a market price for units. Units are required to buy any energy-resources (fuels, electricity etc.) which are in short supply and/or release greenhouse gases. The total number of units available is set by the TEQs Budget, which looks 20 years ahead and reduces year-on-year, being dictated by scientific consensus and the international frameworks adopted.

Full details at: http://www.teqs.net/


Results in annual vote by SP Adopters:

2008
Having received less than 50% in the last annual vote, Adopters had a further chance to vote to keep this policy proposal (which had not been re-submitted). However, only 17% of voters opted for keeping it in the process.

2007
A: 43%
B: 15%
C: 34%
D: 8%
« Last Edit: December 06, 2008, 04:14:57 AM by simpolukadmin » Logged
precycled
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« Reply #1 on: September 26, 2007, 03:30:15 AM »

It is clear that the issues you address, climate instability and fossil fuel depletion, are important but I am concerned about the the focus on energy and emissions which look to me like symptoms not causes.
? The underlying unsustainable economic model would remain unsustainable, with continuing wosening of inequalities, poverty, loss of nature, pollution/waste, and violent conflicts. I don't believe that interconnected global problems can be addressed separately nor by focusing on symptoms.
? TEQs does not say what happens to the money raised by the weekly auction of units. If government get it they will be immune from the cost of units. Governments may be mores likely to fund the next oil-access war than to invest in a sustainable society.
? TEQs does not offer a positive vision of the future. International mechanisms based wholely on constraint are psychologically unappealing and would appear to be politically achievable only when the floods/droughts/storms/riots hit most world leaders' mansions (ie, when it's too late).
? TEQs appear to offer a green light for nuclear power, which governments would falsely argue "emits no carbon". In effect TEQs would syphon money from a resource-squandering fossil-fuelled economy to pay for a resource-squandering nuclear-fuelled economy. There is a similar problem with biofuels, which would lead to even faster loss of nature and escalating food prices.
? Individuals getting free units is superficially attractive but of course the energy itself still needs to be paid for. The only way that poor people can benefit is to sell their units to rich people. The poor would shiver while the rich could preserve their decadence. Poor families would be particularly hard hit since kids do not get units. Poor people who struggle with managing real money would be faced with operating two parallel currencies. Even economics professors will be guessing at the consequences for fuel poverty, energy black-markets and tax evasion using the new currency.
? Since resource-use is unaddressed by TEQs, countries can evade paying for TEQs by continuing to shut down their manufacturing industries and importing cheap goods from countries with low protection for workers and nature. This would encourage the least regulated countries to cheat and allow favoured industries uncontrolled emissions.
? What's next - units for rationing access to water, food and nature? Big brother at our shoulders checking that we live within our units?
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Shaunus4
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« Reply #2 on: September 26, 2007, 12:03:15 PM »

Dear precycled,

I find myself in agreement with your principles, but I must assume that you have not read the information on TEQs available at www.teqs.net, as most of the points you raise seem to be suggesting that TEQs should be more like the way it already is!  Point by point then (apologies for abbreviating quotes, let me know if I have lost the meaning):

1) "energy and emissions look to me like symptoms not causes" - We couldn't agree more.  A deeper problem is the growth paradigm on which humanity's current systems are based, leading us to a dilemma between continued growth and ecological collapse or ending growth and causing economic collapse.  As you can see on the website, TEQs is designed as a way to allow us a less painful way out.

2) "The underlying unsustainable economic model would remain unsustainable" - Again we agree.  TEQs does not claim to be a solution to every one of the world's problems, but rather a remedy for those most immediately facing us, and one that stands a chance of being implemented in time to address these (and so give us time for further radical changes).  If you believe that the only way to a sustanable world is to start again completely from scratch and build a new society from the ground up then I accept that TEQs will not satisfy you.  But even then you might recognise it as a way for the ecological damage done by our current society to be limited.

3) "I don't believe that interconnected global problems can be addressed separately nor by focusing on symptoms"  Agreed, but I don't understand in what way TEQs could be described as such.  TEQs is a direct product of systems thinking, unlike schemes like the EU ETS, carbon offsetting, purely personal carbon trading schemes etc.  Perhaps I should better ask how you suggest our interconnected global problems can be addressed?

4) "TEQs does not say what happens to the money raised by the weekly auction of units"  Yes it does.  The money would be hypothecated to the process of helping us all achieve the energy descent defined by the Budget.  In other words this money would be used by the Government in its enabling role - perhaps supporting those who are unable to reduce their energy usage, providing loans or grants for energy infrastructure projects, insulation and so forth

5) "TEQs does not offer a positive vision of the future."   What would you give as an example of a positive vision for the future?  The grassroots local initiatives within a country using the TEQs framework would look a lot like the current Transition Towns movement, which is why they are strong supporters of TEQs - they recognise that it would give them the support they need.  TEQs itself is the framework to allow those visions to flourish.  I'm not sure I've understood this criticism fully, so please do get back to me on it, perhaps in the TEQs forum on www.teqs.net , so that others with similar concerns can partake in the discussion.

6)  "International mechanisms based wholely on constraint are psychologically unappealing and would appear to be politically achievable only when the floods/droughts/storms/riots hit most world leaders' mansions (ie, when it's too late)."  Firstly, TEQs is not an international mechanism.  It is intrinsically national in scope, but is designed to sit under an international framework like Contraction and Convergence, and to guarantee the effectiveness of such a framework.  If you're in the London area you may be interested to come to the free event on 13th November at which Aubrey Meyer (creator of C+C) and I will be discussing this - details at www.teqs.net/event

Secondly, I am working with DEFRA (UK govt) towards the implementation of TEQs, and have no reason to believe it to be politically unachievable.  I agree that as the impacts of resource depletion and climate change become ever more pronounced political inertia will shift, but already serious discussion of the pros and cons of a TEQs scheme is taking place within govenment.  It is hard work, but not impossible.

7) "TEQs appear to offer a green light for nuclear power"   I have absolutely no idea why you feel this is so.  As you can see on www.theleaneconomyconnection.net , the research centre responible for TEQs are about to publish a detailed report on the fundamental shortcomings of nuclear power.  Why do you feel TEQs is at all 'offering a green light' for nuclear power?  A life cycle analysis of the emissions associated with nuclear power will lead to a high Rating (and hence TEQs price) for nuclear electricity.

8 ) "The only way that poor people can benefit is to sell their units to rich people. The poor would shiver while the rich could preserve their decadence. "  Under our current system, in times of shortage all goods accrue to those who are able to pay for them.  TEQs on the other hand would guarantee an Entitlement for everyone, just as rationing did during wartime shortages.  Those who use less are rewarded for it.  I find it hard to see any way in which TEQs is not an improvement over our current system in this regard.  As detailed in my anser to point 2 above, I accept that TEQs does not solve all the problems of our current economic system, but nor does it claim to.  I do believe it is a major step forward in both fairness and resilience though.

9) "Poor families would be particularly hard hit since kids do not get units." Whether children should receive a full entitlement or not is a small detail - it wouldn't change too much if they did.  We tend to believe that the best way to deal with the complications inherent in this question is to confine the TEQs scheme to adults and let the benefit system assist those who are disadvantaged by their family system.  The benefit system would need tweaking in the light of a TEQs scheme anyway.  Economic study on TEQs shows that it is a progressive system (moving money from the rich to the poor), unlike a carbon tax, which is regressive.

10) "Poor people who struggle with managing real money would be faced with operating two parallel currencies."  Not at all.  As described in some detail in the booklet on the website, TEQs is designed specifically to be a hands-free scheme. 

11) "Since resource-use is unaddressed by TEQs, countries can evade paying for TEQs by continuing to shut down their manufacturing industries and importing cheap goods from countries with low protection for workers and nature. This would encourage the least regulated countries to cheat and allow favoured industries uncontrolled emissions."  Manufacturers have to pay for TEQs units to cover their energy use and emissions, and so this is passed on to consumers in the cash price they pay.  Attempting to put a 'carbon price' on every item would entail all the complications of a parallel currency, but TEQs does not do this.  And items imported from a country not operating a TEQs scheme of its own would be subject to an import tariff to address just the issue you raise of 'imported emissions'.

12) "What's next - units for rationing access to water, food and nature? Big brother at our shoulders checking that we live within our units"  The beauty of TEQs is that it removes the need for Big Brother.  The system is designed with inherent 'pull', so there is no need for heavy regulation and supervision.  TEQs allows individuals and organisations to make their own choices about what is important to them and 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.

I strongly recommend that you read the information available at www.teqs.net for a fuller explanation of the scheme, and then if you are still unconvinced please do join the discussion in the forum on the website

Best wishes.
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precycled
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« Reply #3 on: October 18, 2007, 01:13:18 PM »

Dear Shaun
Thanks for your helpful reply; it was good to meet you last week. I see an important role for rationing amidst the overwhelming likelihood of future scarcities. Sharing is better than grabbing. Assuming that after the crunch government and commerce are able to function at all then some variation of electronic tradable rationing would help. This crunch+scarcity scenario and the other view of TEQs as a climate tool appear to need further development in areas where the current scheme may not operate as intended. There were too many issues for a forum so I've posted my attempt at a review of TEQs at http://www.blindspot.org.uk/teqs_review.html. Please feel free to advise me on future updates of this page.

You asked for my ideas - please see the guest article in the Autumn '07 Simpol newsletter which is also available at http://www.blindspot.org.uk/shortarticle.html. This site also has a downloadable paper, presented at a NATO Advanced Research Workshop, about systems thinking, positive visions and handling climate as part of wider sustainable economic reforms. These reforms are potentially compatible with a future robust form of rationing by allowing rationing to work with the grain of the (reformed) market and by vastly boosting the available flows of funds to support the local and global 'transition'.
Best wishes
James
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