Could energy rationing be introduced in the UK?

A new report advocates the use of Tradable Emissions Quotas to cut carbon emissions.

For most Brits the idea of rationing is one that sits firmly in the past, but in the quest to cut the UK's dependence on foreign oil and cut carbon emissions a new report has suggested a controversial new system which could see it return to the country.

A new White Paper, commissioned by the All Parliamentary Group on Peak Oil, calls for a system of Tradable Emissions Quotas (TEQs) to be introduced, which would see all adults in the UK issued with a certain number of credits dictating the levels of energy and petrol they're able to use.

Any credits which a person didn't use could be sold, while on the other hand those who needed more TEQs would be able to purchase them. Although there would be no upper limit on the amount of TEQs people could own, the proposals are, perhaps understandably, rather controversial.

Supporters of the report believe the system of TEQs has two key benefits; helping the UK meet its target of cutting carbon emissions by 80 per cent by the year 2050 and ensuring if security of supply becomes an issue then everyone is given fair access to energy supplies.

Shaun Chamberlin, director of the Lean Economy Connection and co-author of the report, described the TEQs as the "only fair way" these goals can be achieved.

"It is essential that we prepare now to mitigate the energy shortages of the future... This is also an alternative to carbon taxation; we are in difficult times, and we should not take money away from people when they need it the most," he added.

Among those in favour of the system are Caroline Lucas, the leader of the Greens, who became the party's first member of parliament during the last general election, and Jeremy Leggett, chairman of Solarcentury, who supported the "fairness" of the system.

The report states the system of TEQs will succeed in getting consumers to cut their energy usage where others have failed by moving away from the "carrot and stick" assumption which other systems have tried. It claims to do this by demonstrating that it is a person's best interest to participate and allowing participants to believe they can rely on others to cooperate.

"TEQs provide the culture and framework for the common purpose and inspiration which could draw us together to that end," it stated.

One of the key benefits of the credits was said to be that they could stabilise the price of fuel for consumers during times of financial hardship, and ensure that when energy is scarce it will not be auctioned off to those who are able to pay the highest price, reducing the adverse effects on the most vulnerable people in society.

However, on the other side there are those who believe a system of TEQs could be government control going one step too far. This is part of the criticism that was levelled recently on a pilot scheme of a similar initiative taking place on Norfolk Island in Australia by a blogger for the country's Daily Telegraph.

Another was the problems that could arise if low-income households use up all their credits before the end of the year, but then cannot afford to purchase greater allowance.

"It is in the interests of the market as a whole that the price of TEQs units should be low – as low as possible," the report stated. On the subject of the distribution of the credits not taking into account individual circumstances, such as if a property is poorly insulated and uses more energy, it said "the equal entitlement draws focus to the problem and provides a powerful incentive to deal with it".

This is not the first time such a system has been proposed. Back in 2008 the Environmental Audit Committee released a report on personal carbon credits, suggesting they would be more effective than a carbon tax in reducing emissions.

The report released at the time said: "Persuading the public depends on perceptions of the government's own commitment to reducing emissions, and of the priority given to climate change in its own decision making."

However, the then environment secretary Hillary Benn said the plans were ahead of their time and had practical limitations.

Three years down the line and with a new government in office, many are wondering what will be made of the plans this time around.