TEQs provide the key driver to delivering a zerocarbonbritain, moving individuals and businesses towards a common goal: a race out of carbon.

TEQs are a system of electronic carbon allowances that integrate industry and personal into a single scheme. You take the split of emissions between domestic and industry which is currently 40/60. You allocate the 40% equally per person to individuals for free and tender/auction the remaining 60% to business and other organisations.

On a personal level you only use TEQs for fossil fuel (for fossil-fuel based electricity, gas, coal or petrol etc.). You don’t use your TEQs for all purchases; this is a common misunderstanding.

Everything else is reflected in the price of the products you buy because business has to buy their TEQs. So if you were to go to the supermarket, the only place you’d use your TEQs would be the petrol station for petrol or gas/coal on the forecourt. Once you’re in the store you don’t use your TEQs, everything is reflected in the price. So an organic locally produced apple will start to become increasingly cheaper than the more expensive non-organic air-freighted New Zealand apples. Anything that is fossil fuel intensive starts to become more expensive.

At the start of the scheme one years worth of TEQs are allocated, and you get topped up every week - so you’ve always got a years worth of them in float, you’re not going to run low for a number of years, so everyone has time to adapt and get used to the system. You could either have a carbon oyster card (a carbon credit card) or more likely your TEQs account would be linked electronically to your debit & credit cards, to allow a totally seamless transaction.

You can check your balance by mobile phone, at an ATM, on the internet or at a post office and probably lots of other places. You’d also be sent TEQs account information, letting you know how you’re doing and providing information on how you could reduce your need for TEQs and where to go about doing so.

TEQs are also tradable. You can buy and sell them very easily. So for over 60% of the population that means a windfall, as they use less than the average and can sell thier surplus (electronically). Much like the lower-emitting countries can in the Contraction & Convergence framework. And TEQs don’t expire.

This trade leads to a fluctuating price of TEQs, much like the fluctuations of a currency. So you can expect to see TEQs prices being added to petrol station price stands, alongside Diesel and Unleaded as well as at Post Offices and Banks. The better everyone is coping, living within their budget, the lower the price will be, because there will be less demand.

Equally, if lots of people continue to use too much fossil fuel, they can do this initially, but at a great and increasing great expense, because they’ll have to purchase extra TEQs on the market. And this will put the price of TEQs up, because all of this happens within a national cap. There are only so many TEQs available. However, if the price of TEQs rises, this will stimulate an even greater demand for zero- and low-carbon technologies and products, moving the price of TEQs lower again: the system will largely regulate itself.

Another misconception with a carbon allocation system is that there’s an initial ration, the notion that we must all give up half of what we do immediately. This is not the case with TEQs. The system starts where we are now. It starts by using the per person emissions from last year and allocates that amount this year, then year on year it reduces. So in effect what you achieve by the end of the period is a radical change in our energy use, but you’ve achieve this gradually, step by step, year by year.

If you run low, which you may after a few years of excessive energy use, then you can buy more at the point of purchase of fuel, or online, or at an ATM, through your mobile phone - it’ll be very easy to top-up your account. And as I said before the price fluctuates depending on how well everyone is coping, how well everyone is living within their budgets.

You can also opt-out of the system to some extent, you can sell all your credits as soon as you receive them, every week (you would probably tick a box somewhere on a form or on the web) and then when you buy your fuel you will pay extra as the petrol company or whoever would have to buy the TEQs for you, that would all happen instantly in the transaction. So if your Granny doesn’t want anything to do with this system, she doesn’t really have to.

Business has to buy the TEQs it needs. They will most likely do this through their banks.

One very important point that can be overlooked is the role of government in this system. Because government has to live within the system and purchase TEQs for its own activities, just like everyone else it becomes a facilitator of transition; rather than a block on it. Most of the actually work would still be done by individuals and business; government’s role becomes to facilitate the transition: through policies that enable a smooth descent down the energy staircase. It will stop investing in road building and instead invest in public transport and cycle paths. It would remove the barriers for renewable energy take-up and re-enforce strategic parts of the grid to allow wider distribution of the massive renewable resources in Scotland and other further a field.

And it will have potentially very significant funds to do this with. The revenue from auctioning TEQs to business can be used to act as a “war kitty” to ramp-up projects such as “Warm Front” (a current government programme which is retrofitting people’s homes with insulation etc.) as well as investing in infrastructure changes to public transport and the strengthening of the national grid.

This is a very important point, because there will, under the TEQs system, be a certain number of people, the poorest 2% of households according to recent studies, who emit more than average (going against the general trend that the more you earn the more you emit). While TEQs would assist the poor on the whole, those households would be potentially worse off under a TEQs system, after 3 or 4 years. Those households would need likely be the first people to benefit from the governments programme of infrastructure investment. They would be the priority in insulating homes etc.

It’s important to remember that TEQs while being a very progressive policy does not solve every social problem. So under a TEQs scheme government will need to play an active role in assisting those sections of society that need help.

So the system is effective because it…

• Changes peoples buying habits, carbon intensive products are more expensive, so buying local & organic becomes cheaper.
• Drives zero/low carbon technology, because the more fossil fuel industry uses, the more TEQs they have to buy and the higher the price of their less saleable products.
• It brings in a common purpose, making emissions everyone’s business. A smooth descent down the energy staircase will only be made through the efforts of all, the price of TEQs will stay very low if everyone is staying within their allocations.

Read more about TEQs at www.teqs.net

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