This working paper explores what people may need to know, learn and have if a
Personal Carbon Allowances (PCA) scheme was to be implemented, and the kinds of
policies, programs and initiatives that could support them. 
 
PCA is a proposed downstream carbon cap and trade policy instrument suggested for
the UK. It is a mandatory policy whereby all individuals receive an annual carbon
emissions ‘budget’ for their personal use. A PCA scheme would cover emissions under
individual’s direct personal control, such as household energy use (mainly electricity
and gas), private transport (not including public transport) and aviation. It would not
include the carbon embedded in products and services purchased by the individual.
People would be allowed to buy additional emissions or sell their surplus credits in the
personal carbon market. 
 
Defra conducted a pre-feasibility study into personal carbon trading in 2008 and
concluded that it is an idea ahead of its time. Yet, the UK Government remains
interested in the concept of PCA and welcomes further research. 
 
It is suggested that a PCA instrument would lead to energy demand reduction through
three basic interacting mechanisms: economic – via carbon price, psychological – via
carbon awareness, and social – via new norms for carbon emissions.