Context

Our two main problems, common to all humanity, are climate change and the depletion of non-renewable natural resources. It seems that the population has globally integrated these issues. The last years of recurrent droughts, with their heat waves, devastating fires and a lack of water that is becoming chronic have finally convinced the most reluctant that a big problem is ahead of us.

When it comes to natural resource shortages, the war in Ukraine will unfortunately help. We have never heard so much about possible shortages of grain, gas, oil and electricity. And the price signal for these commodities is not good. The inflation of the last few months is making us a little nervous. The government seems to be very powerless.

If a societal awareness is thus on the way, it must be noted that the transition to action is very difficult. The social demands are to compensate for inflation by blocking or limiting prices, withdrawing taxes, temporary assistance cheques or general salary increases. All these demands have in common that life can go on as before, in a society of over-consumption that does not want to disappear.

Very few voices are being raised in social and political institutions to call for a real paradigm shift. Working less, accumulating less, producing less but better in the field of essentials, repairing rather than always renewing, are the only ways for us to meet the needs of our society without continuing the accelerated degradation of our environments. The results of the 2022 elections show that these ideas of "degrowth" are still strongly rejected by our fellow citizens. We are therefore in a great paradox. We do not want a planet that has become unlivable. But we are not ready to give up or compromise in order to calm down the game. We therefore need new tools for regulating and steering the lives of individuals and companies in order to bring our daily actions into line with the imperatives of reducing greenhouse gas emissions. It is within this framework that we would like to propose below a model of individual greenhouse gas (GHG) emission quotas that is sufficiently simple to set up, measure and control so that it becomes both a tool for making individuals accountable and regulating them, and a tool for encouraging the transition to a new model of society that is capable of ensuring the well-being of all in an ecological context that is stabilized as much as possible.

Principle and method of declaration of individual quotas

The objective, in this tense context, is to control and limit the emissions of individuals and companies while respecting freedom and with a concern for equity. This is not easy. Attempts at environmental taxation, the best known of which is the carbon tax, are for the moment very badly perceived by the middle and lower classes. And for the richest, it is only a gimmick of little concern. We need to find a tax system that is strong enough to compel individual reductions in emissions, that commits each of us personally, while preserving a relative freedom to organize our lives and a certain quality of life. And this system must, as far as possible, progressively involve the most affluent as well as the most modest, in a manner proportional to their standard of living and consumption.

The difficulty in accepting the carbon tax is that it is difficult to adjust according to people's purchasing power. As a result, it is the same for the same product whether you are rich or not. It therefore weighs very differently on individuals and probably much more on modest households than on wealthy ones. The measure that seems most appropriate to guide individual behavior would be to establish individual carbon quotas. The concept of emission quotas already exists. It has been applied for several decades to the largest companies in the energy or heavy industry sectors. Its limitation is that it is associated with a carbon market that allows these companies to buy rights to pollute if they exceed their quota. And the cost per ton of carbon is generally insufficient to provide an effective incentive to reduce emissions. In fact, these emission quotas on industries have existed for more than 25 years (they were initiated by the Kyoto Protocol in 1997) but have never been able to induce a real reduction in emissions.

In addition, a proposal for an individual carbon allocation has already been formulated, but never tested, with the carbon account (voir compte carbone). The idea is to account for the GHG emissions of all French households in the most exhaustive way possible. Each citizen would then have an annual allocation of 9T of CO2 equivalence, from which would be deducted at each moment the emissions caused by all acts of their daily life. If, during the course of the year, the household's emissions exceed the individual allocations of its members, a market of allocations would have to be instituted, allowing individuals to buy additional allocations from those who have unused allocations. And each year the starting endowment is reduced by 6% in order to achieve carbon neutrality for all by 2050.

With this proposal, we are therefore generalizing what has already been done for several decades for large companies, with market quotas that do not work. And one can imagine the extreme administrative heaviness of the system that requires citizens to constantly evaluate all the emissions linked to their daily life.

Our proposal, despite similarities with this carbon account, is quite different and, above all, much simpler in terms of its implementation and control. In fact, this is where the relatively good news can be found. It would probably be quite simple to develop a system of individual quotas that would be easy to manage and control and that would provide a strong incentive, while preserving real freedom of choice for individuals.

At least in a highly administered country like France. For other countries it will undoubtedly be more complicated. In order for these individual quotas not to turn into an administrative and fiscal gas factory like the carbon account, we need to focus, at least initially, on the major GHG emission items that are easily measurable and controllable. And in a way that is not too intrusive in people's lives.

Our proposal is to start by taking into account only the 3 major consumption items which already account for the vast majority of household emissions, and which are also easy to measure and monitor.

It is therefore the travel by private car, air travel and fossil fuel consumption (mainly gas or oil) and household electricity.

• For the car, each household will have to declare once a year on line on the account of the tax administration the odometer reading of its vehicles. The control of the kilometers driven by car can then be verified by the administration in a more or less automatic way by crossing it with the meter readings made every 2 years during the technical controls of the vehicles.
• Energy consumption (fuel oil, gas, electricity) will be transmitted directly to the tax authorities by the energy suppliers in the case of individual housing, or by the co-ownership syndicates for collective buildings.
• Air travel, with the corresponding emissions, calculated as accurately as possible by integrating the flight's kerosene consumption and the plane's actual occupancy rate, will be transmitted directly to the administration by the airlines.

With this mechanism it should be quite easy to obtain a pre-filled annual report of GHG emissions for each household, based on the model of the pre-filled income tax return we are now familiar with.

In a first step, but perhaps we will never need to go further, the 2 other household emission items are food consumption, of meat in particular, and of what is called the grey energy of significant real estate and furniture assets. Grey energy is the energy required to manufacture all these consumer goods. The more new products people consume, the more emissions they generate.

These two items are either much lower than the first three mentioned, or very difficult to evaluate and control, at least for food. In these areas, it is better to encourage the already well established and popularized tendencies to reduce meat consumption by favouring quality over quantity. In terms of consumption, all the approaches of reuse, repair, fight against programmed obsolescence, sharing of goods rather than individual appropriation are developing and are good answers to our difficulties. We also put aside at first the public transport trips except for airplanes. They are also difficult to evaluate because the unit emission values are different depending on the vehicle used and its occupancy rate, which cannot be known or controlled by the user. But above all, not taking them into account is a strong signal, and a great deal of latitude is given to each person to travel without limit of quota, provided that they use alternatives to their private car and to flying. Once we agree on the scope of the individual quotas, it remains to set the thresholds assigned to each person and see what happens when these thresholds are exceeded.

Individual allowances are non-marketable but support fair carbon taxation

It seems to us that in order to obtain a fair and acceptable system the individual quotas must not be commercial. We must not create a market for individual allowances that will in all cases be diverted to the benefit of the richest. If an individual or a household exceeds its quota, the excess emissions will be taxed after the fact, with progressive levels that can become very high for the largest emitters.

Dans l'étude Changement climatique et inégalité mondiale des émissions de carbone (1990-2020) | Lucas Chancel, we learn that in Europe the average annual emissions per person were 5.1T for the 50% of the most moderate population and 29.2T for the 10% of people who emit the most. These are total emissions that include domestic emissions but also emissions from the public sphere. Since our individual carbon allowances cover only a portion of private emissions, the annual allowance level must be set below these overall emission levels. We could therefore set the first quota at 60% of the 5.1T emitted each year by the 50% of the most moderate population. We could therefore decide that 3.6T are allowed per French citizen tax-free, and that from this threshold onwards, the level of tax is gradually increased. Even if it means reaching such high tax levels that they could be a brake on overconsumption, including for the richest, or at least fill the public coffers if this does not stop them. And every year we reduce the individual quota by a few percent to reach carbon neutrality in a few years.

We would thus have a fiscal tool that is rather simple to manage, with a strong incentive to moderation, that allows a decent and fairly free life as long as it remains within levels compatible with the ecological transition. And the constraint is the same for everyone, money still allowing us to buy excesses, but with a cost that we could make prohibitive if we collectively wish it and edit it democratically.

Numerical example

It is difficult for everyone to appreciate the GHG emissions that are caused by our lives. Everyone can already evaluate their complete carbon footprint with the Ademe tool. Here is an example of what it looks like for a single person living alone in a 30m² apartment.

• He uses a small gasoline car that travels 8000km/year mainly to go to work with a daily 20km round trip. He does not use public transport.
• He consumes one coffee/day, but no bottled water, soda or alcohol.
• His diet is based on local and seasonal products with very little meat.
• The heating is collective gas with 4000kwh / year and 3500Kwh of specific electricity.
• He has few state-of-the-art appliances but rather recent digital equipment and uses 3 hours of "leisure" internet per day on average.

With all these parameters, the annual accumulation of private emissions (by removing the share of each of us of the emissions related to the functioning of the public sphere which is evaluated at 1113kgeqco²/person) is 4540 kgeqco2/year, i.e. a little less than the average of the poorest 50% of French society. The energy used for housing and travel, which will be taken into account in the quota, represents 2.7T or 60.7% of private emissions.

This single person will therefore be allocated an annual quota of 3.6T for the first year of implementation, just like anyone else. He will therefore be below the threshold and will not have to pay any additional tax.

But if this bachelor decides to do an extra and to offer himself a vacation in the United States, his flight from Paris to New York must represent alone 970kgeqco². (estimate made with my impact transport.fr). It therefore reaches the 3.6T threshold that triggers progressive taxation.

As for this taxation system, we propose that it be based on a defined and quite high value of the emitted carbon ton, for example 1000€. This is far from the carbon market prices known until now, where tons are traded at prices of around 30 to 40€/ton, market prices that are far too low for the system of quotas on companies to really push for emission reductions.

Subsequently, to discourage the deviant behavior of very large emitters, a carbon tax multiplier should be applied. We propose that this coefficient varies from 2 for 5 allowances produced per person to 50 for those who could emit more than 15 allowances in a year. The simulation of what this gives as an annual tax level is in the table below (NO TABLE)

This shows that for the largest emitters, the annual tax can become very high. Let's not forget that these are tax levels that are not supposed to be reached. The principle of carbon quotas is first of all to make people give up over-consumption behaviors that are no longer acceptable today. This is why we need to put a value on the ton of carbon which, beyond certain thresholds, becomes prohibitive.

Is the individual quota an effective tool for changing behavior?

It is in fact the combination of 2 factors of the device that must make its effectiveness.

• The first factor is the fact that the three items of personal car, airplane and housing energy are combined in the calculation. This then allows us to modulate the relative share of each of these items by playing on what is easiest to save depending on where we live.
• The second factor is to leave each area of the quota completely free. For travel, it is the fact that public transport is not included in the quota, which means that it can be used "without moderation", that should have a strong incentive effect to use it as an alternative to the private car. This will of course be all the stronger if the public transport offer is of good quality and well distributed over the living areas. For housing energy, the first alternative is to move towards structurally sober housing (excellent insulation and quality natural lighting).

But if this is not enough to do without an energy source for heating, solutions based on biomass or solar thermal will remain outside the quota. And for electricity, solutions such as self-consumption photovoltaics can provide access to decarbonized electricity without quota limits. In the end, it is only for air travel that there is no "free" alternative of the same level. But very few of us really need to fly. It remains to be seen whether an annual quota-free flight can be allowed for people who need to reunite with family members in a distant country.

We can therefore see that it is the combination of the limit induced by the quota and the freedom offered by what remains outside the quota that must ensure the effectiveness of the system, whose sole objective is to reorient people's lifestyles towards a system that is low in GHG emissions. We are not here to limit individuals, and even less to dictate their lifestyle choices.

Beyond individual responsibility, complementary measures to accompany the transition

The individual non-market quota that we are proposing is above all a tool to make individuals more responsible and to encourage them to adopt climate-friendly practices. It goes without saying that this will only work if effective public policies aimed at encouraging and facilitating alternative approaches are implemented, particularly on the items included in the individual quota. And it is logical to allocate all the money collected through individual quota overruns to these public policies. Without wanting to make an exhaustive list of everything that needs to be done, we can already mention the priorities:

• Equip all French cities with efficient public transport networks and soft mobility facilities (bicycle paths, park-and-ride facilities, etc.)
• Accelerate the thermal renovation of buildings by facilitating access to long-term interest-free loans for all public buildings, social housing offices and private co-ownerships.
• Investing massively in the whole mix of renewable energies (wind, photovoltaic and biogas) to decarbonize as quickly as possible the electricity mix of the different electricity suppliers, allowing users to obtain a constant quantity of electricity even in the event of a reduction in the individual quota.

Finally, these quotas applied to households should be accompanied by the same principle for companies. It would just be necessary to define, branch by branch, the modalities for evaluating emissions and the reference scales, as well as the progressive tax rates. There is nothing impossible or even difficult about this. And finally, these ecological taxation tools could be associated with a VAT modulated according to environmental and possibly social criteria, to be defined. Little or no VAT on essential goods produced using ecological processes. A maximum VAT, within the limit of what the EU imposes, for superfluous or ecologically unsatisfactory products.

References

https://wikispiral.org/tiki-index.php?page=together-fr

https://comptecarbone.cc

https://www.agencecarbone.fr/agence

https://carbometre.herokuapp.com/footprints/new

https://monimpacttransport.fr pour connaître les émissions liées aux différents moyens de déplacement

https://nosgestesclimat.fr Connaissez-vous votre empreinte sur le climat ?