Page last updated at 15:50 GMT, Thursday, 8 May 2008 16:50 UK

Carbon trading scheme ruled out

Pollution from energy plant
Trading carbon is seen as a mechanism to tackle climate change

The government has ruled out a nationwide carbon trading scheme to reduce emissions, describing the idea as "ahead of its time".

Under a 2006 plan, every adult would receive an annual carbon "allowance", with those not using their allocation selling surpluses to those using more.

But a government report said the scheme would cost up to 2 billion to set up and seemed like a "big brother" idea.

It could, however, be "potentially important" in future, it added.

The proposal was put forward by two years ago by the then environment secretary, David Miliband.

Adults would have a card swiped when paying for items such as travel, energy or food.

This would set a cap on national CO2 emissions, which are meant to be reduced by 60% from 1990 levels by 2050.

Just straight away it reminds me of going back to the war and rationing
Government survey respondent

In its report, the Department for the Environment, Food and Rural Affairs (Defra) said the carbon trading scheme had an "inherent fairness", as everyone would get the same allowance.

However, some households, such as a single-parent family living in an old detached home in the country, would emit more CO2 than others, for instance a single person in a newly built city apartment.

Defra, which carried out interviews with 92 people, also found a "strong lack of trust in the government in doing this and a reluctance for individuals to have to contribute financially".

One respondent said: "Just straight away it reminds me of going back to the war and rationing."

'Interesting idea'

Setting up the technology to cope with individual carbon trading would cost between 700 million and 2 billion with annual running expenses of 1 billion to 2 billion, the report said.

All "relevant retail points", such as petrol stations, energy suppliers and travel firms, would have to install machines to deal with the allowances of up to 50 million people.

However, the report said "there may be circumstances in the future where personal carbon trading is a cost-effective and desirable policy option".

It added: "The government maintains its view that personal carbon trading is an interesting idea, but considers the concept is currently ahead of its time."

On Thursday Mr Miliband, who is now foreign secretary, said Europe should lead the world in moving to a low-carbon economy.

This would help counter the "resource crunch" which has seen fuel and food prices surge in the past year, he argued.

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