Tradable Energy Quotas (TEQs)

Looking forward it is clear that the business-as-usual energy policy is “not fit for purpose”. The current system is proving itself inadequate when faced with twin challenges of fossil fuel depletion and climate change. The energy markets are likely to respond to future shortages with profiteering, grossly inequitable allocation and globally destabilising financial flows.

A rationing system is required which can both facilitate equitable allocation of the diminishing resource whilst simultaneously reducing the carbon dioxide released.

Formulated by Dr David Fleming and first published in 1996 as Domestic Tradable Quotas (DTQs), Tradable Energy Quotas known as TEQs (pronounced “tex”) are just such a system. TEQs are an electronic rationing system that includes everyone, bringing citizens, industry and Government together in a single scheme with a common purpose. The structure of this scheme is detailed in Fleming’s excellent short book (available at detailed below.

Below is an overview of TEQs written for TOD by David Fleming, he will be reading your comments.

Tradable Energy Quotas (TEQs)

Tradable Energy Quotas are an electronic rationing system to reduce dependency on oil, gas and coal, in order (a) to cut the carbon emissions that cause climate change, and (b) to distribute access to these fuels equitably at a time of deepening energy shortages. All adults have an equal (electronic) ration of "carbon units" or "energy units" which are tradable; non-domestic users buy units on the market, into which they are issued by weekly tender. A year's supply of units is in the market at all times, topped up each week. There is a "Carbon Budget" which determines (subject to formal monthly revision) how many units will be released week-by-week over the next twenty years. The scheme enables everyone to plan ahead to reduce their fossil-fuel dependency, to achieve deep structural change in the whole political economy, and to bring forward the development of renewable sources of energy.

TEQs are "quantity-constrained", not "price-constrained". That is, it is the limit set by the Carbon Budget - not a high price - that does the work of reducing energy demand. There are no intrinsic reasons why the price of carbon units should be high; in a successful scheme, the demand for fuel would be reduced (tending to keep down the price of fuel) and the economy would be well-adapted to the Carbon Budget (tending to keep down the price of units); there is a reasonable expectation that the total energy price (the price of the fuel plus the price of units) would be lower than without a TEQs scheme. The expectation of lower energy prices applies especially at times of oil and gas scarcities, when TEQs-rationing will be the essential condition for fair and affordable access to fuel.

Each scheme is set up as a national scheme, with its own Carbon Budget, but each national scheme could be within a wider multinational framework.

TEQs are an economy-wide scheme for all users, including firms, institutions and the government itself. Applications of the principle for individuals only, excluding the rest of the economy, would be impossibly complex. If the energy-loop from original producer to final user were broken, the rating system (which sets the quantity of carbon units in the energy that is purchased) would break down. The existence of two markets - one for individuals based on unit prices, and one for everyone else using some other mechanism - would produce two prices with black market brokering between them. The need to distinguish between individual uses and commercial uses (e.g. midwives' or part-time window-cleaners' needs to travel to their clients) would lead to arbitrary decisions and encourage fraud. An integrated scheme covering the whole economy is self-regulating, and largely automated, requiring minimal administrative action by participants. An individuals-only scheme, of the kind described as "Personal Carbon Allowances", if it ever reached the point of implementation, would break down with such effect that it could be expected to rule out an effective carbon-rationing scheme of any kind for the foreseeable future.

As explained in the book and on the website (below) TEQs are based on the principles of "Lean Thinking", and especially on those of "flow" and "pull". The system is clearly the responsibility of energy users - industry and consumers - rather than of remote managers and taxation accountants. Everyone participating in it knows that by certain times ahead - 10, 20 years - they will have to be living and working within a defined, and much reduced limit on their consumption of fossil fuels. They will invent their own solutions; they will take advice; they will refer to guidelines and standards; they will follow the promptings of their neighbours; they will join together in local schemes which can do much more to improve energy-efficiency than any household can manage on its own. But they will not depend on regulations to tell them what to do. That does not mean that there will be no regulations; no doubt some will still be needed, but they will be ancillary, peripheral to the system, and not the motor which drives it along. That is, the system is set up in such a way that participants will have good, passionate reasons to achieve far more than they could ever have imagined is possible. The energy flows in the economy are made visible and explicit; the invention and ingenuity of everyone involved is stimulated and pulled along from observation to action.

See David Fleming, Energy and the Common Purpose: Descending the Energy Staircase with Tradable Energy Quotas (TEQs), London: The Lean Economy Connection, (2005), ISBN 0-9550849-1-1, price £5. Also at

Media Coverage:
Guardian: Pay as you pollute
BBC: CO2: This time it's personal
Telegraph: Energy ration cards for everyone planned

What a good idea.  Maybe there is some hope for the planet after all.  Tell your friends.
It's indeed a very good idea because it's lays the responsibility for Peak Oil and Climate Change in the hand of citizen.

We have to learn more for ecology to see that our world is governed by energy laws. If we as citizen don't find ways to work along them, they will in the end force us to comply with them.

As H.T. Odem stated:
"In time, through the process of trial and error, complex patterns of structure and processes have evolved...the successful ones surviving because they use materials and energies well in their own maintenance, and compete well with other patterns that chance interposes."

Now it's time to switch to a new energy paradigm; a dynamic steady state economic within the boundaries of our earth.

TEQ can provide the boundary for greenhouse gasses.

Perhaps this is not the appropriate thread, but I would like comments on this.

I spoke with two Icelandic executive/engineers at a Hydropower conference in Portland OR.  I strongly urged them to blow the dust off of old plans for a HV DC link from Iceland to Scotland.

I think the UK will be in terrible shape from 2012/14 to perhaps 2020.  Iceland could get VERY good prices for their renewable power, perhaps enough profit to pay for the plants & transmission line.

After ~2020, this power could be devoted to producing aluminum in Iceland with any summer surplus (max production, minimum demand) sold south.

Alan oddly enough Down Under there is a new underwater HVDC that enters the sea near an aluminium smelter. I think by 2020 summer demand from ACs at the other end won't leave enough power for industry. Now I've gotta tie this in with personal carbon quotas...hmm.

I think we are going to endure a "terrible shape" for far longer than the six to eight year period you suggest. We are doing next to nothing to compensate for the loss of 15% of our generating capacity by 2012 (the last 5% by 2014, I believe). Our use of coal expanded by 18% last year with a commensurate fall in gas of 17%. Currently we are a net coal importer. We have squandered our oil and gas and are facing an ever growing level of imports. As for gas, we are next to last in the chain that streches from Russia to Ireland. We have a population of more than 60m in a space the size of California. Water is currently becoming an issue and will end-up in a traditional north-south divide, IMO. We're not a mineral rich nation. Our coal mines would require a significant effort to repair and make ready for mining. We are in the midst of a housing bubble that is every bit as significant to us as the one in the US. Debt is at record levels. There seems to be a general increase in prices overall. The economy is totally dependent on consumer spending which is slowing and yet the source of the spending has been primarily the housing bubble.

IMO the UK is headed for a period of deflation and instability it has never experienced. I would cut and run but my family seems wedded to the notion of remaining. I wish we would at least sell-up and rent, but Maggie's obsession with home ownership has completely brainwashed my spouse. So, here I remain while the London Olympic commitee is planning for a spectacular I suspect will be remembered only because it was the last Olympic's of any scale and was a fantastic failure.

There, I've said my piece. Thanks for listening.

i tried downloading the pdf ,but it locked up....perhaps too many people trying to go thru the door at the same i have to ask this question from a point of does a country determine what its total fossil fuel energy quota is? ...certainly countries such as china or the mid-east, which have rapidly growing energy diets, might look askance at the U.S. claiming 25% of the worlds total, as they have now with oil...this is the sticking point that i see with depletion protocols.
Re: "TEQs are an economy-wide scheme for all users, including firms, institutions and the government itself. Applications of the principle for individuals only, excluding the rest of the economy, would be impossibly complex...."

I found this impossible to follow. In America, corporations are by law individuals and have the same "rights". They just happen to be sociopathic, narcissistic, extremely powerful and wantonly destructive individuals providing goods & services that apparently justify their insane behavour -- unless you are vested somehow and therefore profit from their behavour. They are going to participate in this complicated system -- how?

I think this is totally insane !

You really are proposing to individually control all of the energy use of 60 million people on a weekly basis.

You really want to stop people buying petrol regardless of need (or can you become overdrawn).

You really want to put individuals in the same system as Governments and Companies with their vastly disproportionate resources compared to individuals.

The whole principle is based on Coases Theorm, by Ronald Coase the Nobel Award winning Economist.

Carbon Trading - For Large organisations if you must, TEQ's for all is insanity.

David Flemming is been taken seriously by Government ?

This idea should have been killed at birth, it is far to fine a degree of control and totally disproportionate and impractical. This is a case of environmental facism. I cannot see how organisations like the BBC, Guardian, Telegraph, and the British Government can even give it any credability, nor individuals like Colin Challen, the Labour MP for Morley & Rothwell.

This is enviornmental facism.

Sorry to be so intemperate, but this concept deserves ridicule. The attempted justification is bizzare and value ridden.

I will re-read the leaflet and come up with more detailed comments. But I just wanted to express my initial discust and bewiderment at such draconian, impractical, and frankly dangerious proposals.

It will be intresting to see if my comment is removed.

I think this idea has more plausibility than The Oil Depletion Protocol. But still unlikely

Its either new supply, voluntary reduced consumption, some macro policy like this, or resource wars, or some combination of the 4. Why wouldnt this work if implemented by the government - there were ration cards in world war II and we dont seem to hear that that was insane.. Its acceptable to take a small pain now instead of a huge pain later - the problem is that not everyone can visualize the future pain yet, so TEQs sound 'insane'


Given your reading(s) regarding human nature, do you think it possible such a scheme will work?

Regarding WWII rationing: I remember somebody on TOD explaining that was rife with cheating and corruption.

Make sure to listen to the jazz piece about the rationing during WWII, very good:


I think you have hit the nail on the head. It is human nature that would inherently doom it to failure. it is esentially an utopian idea. I love the idea. Sadly we don't have the right ethos to pull it off. Certainly not in thedeveloped world; and definitely not in the developing world where 'they' are trying to get like 'us'!


Yes, there is a certain nostalgia for World War II, typically among folks who didn't live through it. It is quite similar in spirit to the attitude towards Communism held by Leftists who never lived through it, as opposed to the attitude of, say, refugees from it.

I recall hearing, in childhood, a story about a relative's well-buttered car engine. It seems butter wasn't rationed (or maybe was rationed more leniently) at Post Exchanges (PX's) on military bases. So he packed butter and other stuff into his car's engine compartment in order to smuggle it off base. And then got distracted and forgot about it. And eventually pulled into his driveway with the car reeking of butter, accompanied by gales of laughter when the rest of the family saw what had happened.

Most of the time, though, no one was laughing at all the corruption and arbitrary unfairness.

My first guess is that in any real world implementation of this awful scheme, the Al Gores and Ken Lays of this world will somehow be allocated quasi-infinite quotas, their constant private-jetting being obviously "essential". On the other hand, in order to support that, Joe Schmoe will be risking his neck on a bicycle to get to work at the local grocery store.

My second guess is that there will be an almost uncontrollable epidemic of forged and hacked ration cards, far more severe than the one we have with credit cards. In many respects, this scheme threatens people's economic, social, and as in the case of "non-essential" Joe Schmoe, literal lives.

No, thanks. As a citizen, I will perceive a need for Draconian action on GW only after I see all the big hub airports closed, and all physical academic conferences cancelled and moved to the Web or simply replaced by email and blog-like methods. This is of course symbolic, but in absolute terms, aviation is the fastest growing item out there, and one of the most profligate ways imaginable to consume fuel. I would accept such changes in elite behavior as indications that the preachers of GW gloom and doom actually believe what they say. I see not one shred of evidence for such belief at the present time.

While I believe that for socio-cultural reasons, it would be a good idea for most people to go overseas once or twice in a lifetime, a medium sized airport like McArthur on Long Island could easily fill that need for the entire Northeast, with no need for any of the others.

It is perhaps no accident that serious proposals of this sort are coming from Britain, land of George Orwell. He seems to have seen something in the British that they refuse to see in themselves...

I'm not sure if PaulS actually raised a rational objection to tradeable quotas. The scheme may be difficult, or impossible, to administer fairly, avoiding cheating, but that doesn't make the idea bad, in principle.
Paul S,

Your point about airports and academic conferences is a good one. If you want to see some real mental gymnastics, ask a self-proclaimed environmentalist to rationalize his ownership and personal use of the car, the most environmentally destructive device ever devised!

He/she will likely say something along the lines of "well I drive it as little as I can" which in my mind is like a self proclaimed advocate of freedom saying, "well I work my slave less than most!"

Are you sure that airplane travel is so profligate? I haven't checked recently, but I recall that the gallons per passenger mile for a nearly full airplane is less (more economical) than that of a one passenger automobile. Quibble about the appropriate comparisons, but airplane seem to run nearly full most of the time, and, here in California, cars are mostly empty.

Seems to me that you're reacting a bit too strongly to a market mechanism other than astronomical prices to allocate carbon quotas. Suppose every individual got the SAME quota, including corporations. "Tradable" means you can sell yours, so if you have an energy efficient home and ride a bike, you have a terrific source of income. Where's the draconian part? You still have choices.

Rationing did work though, in improving the nourishment of the poor in both wars, in Germany as well as the UK.
TEQ might work for some artificial alien life form that doesn't have our hardwired genetic imperatives.  In the real world with H. sapiens, people will lie, cheat, steal, and fight over every last BTU.  The lower the BTUs/capita go, the nastier the fighting will get, until a steady state is reached.  The steady state will be with a much smaller population and much lower BTUs/capita than today.
We wont voluntarily do it, but a dictator could pull it off.
. . . and then a certain proportion of people will rebel against the dictator who will have to use force, possibly/probably lethal force to put the rebellion down. (not unlike the Whiskey Rebellion on a national scale.)

or another dictator will rise up and challenge the dictator who puts the TEQs into place.

either way, we're right back where we are: energy war(s) and/or energy rebellion(s).

I say let's accept the fact we are heading full speed into total disaster and that due to human nature there just ain't much that can be done as far as society is concerned. Then let's just try to figure out how those of us who are aware of this situation can mitigate the effects in our own personal lives.

I think the rationing idea is as ridiculous as you do.

However, if you think that "It will be interesting to see if my comment is removed." you obviously know nothing about this website.

Although individual commenters can get very insulting when others fail to fall in with whichever party line, TOD has never, to my knowledge, edited any opinions.

So do "re-read the leaflet and come up with more detailed comments". We have discussed far more controversial issues than this one at great length, agreement not being a prerequisite.

  I don't think rationing would work either. Although through taxes you might pull the same effect.

I had to of my posts pulled, I believe it was a discussion of how my drillship shut down before a hurricane. So there is some level of censorship everywhere.


Rationing is the only gauranteed way to reduce fossil fuel use. The tripling of oil prices since 2001 has had almost no effect on consumption which means the carbon tax idea won't work.
Corporations and the rich would likely set up a handful of brokerages to purchases rations from persons willing to sell. Otherwise they would make capital investments in non-fossil energy systems. Efficiency improvements will become more important if corporations wish to maintain a competitve advantage.
"Rationing is the only gauranteed way to reduce fossil fuel use"

yeah just like marriage is the only guaranteed way way to reduce infidelity!

It would be guaranteed if imports were constrained to match the total rationing. It may or may not be difficult to stop individuals cheating but it will be easier to stop oil tankers docking.


The tripling of oil prices since 2001 has had almost no effect on consumption which means the carbon tax idea won't work.
That's wrong on at least three levels:

  1. Final figures aren't in yet, but IIRC it appears that consumption has levelled off.
  2. Major reductions in consumption require people to change (or lose) jobs, move, or get a more-efficient vehicle.  These changes take time.  It took almost a decade for US consumption to reach its low after the 70's price shocks.
  3. Sales of hybrids and cars are growing rapidly, while sales of trucks have tanked; this has little immediate effect, but it is a lock-in of reduced consumption for years to come.

A carbon tax would also take years to work its effects through the system.  But it would be a certainty, instead of the impression many people had of the oil price spike being temporary.  Accompanied by changes to building codes, requirements for PHEV plugs and the like, it would be one of the most effective weapons we could use against greenhouse gas emissions.
I think this is totally insane !

VS what other arragments do you think isn't 'totally insane'?

Are you a fan of
and thier idea
of energy accounting?

You really want to put individuals in the same system as Governments and Companies with their vastly disproportionate resources compared to individuals.

In the biggest user of hydrocarbons, the individual already bids against the governemtns/corps for oil and oil by-products.

This is enviornmental facism.

Fascism is sometimes definde as 'element X worlking with goverment.   Who from 'the environment' is acting as 'element x'?

Perhaps this version of fascism is what you ment:

How about Libertarian National Socialist Green Party

What are you trying to say with 'fascism'?

It will be intresting to see if my comment is removed.

Why would you think that?   Are you coming here from or perhaps

If I understand this correctly, it seems like this would also have the pleasant side effect of shrinking the gap between rich and poor.  At some point in the future as energy becomes more scarce, its cost will become more and more significant, so if one person has a thousand times the money of someone else, but they have the same amount of fuel, their wealth difference won't be so great.  In other words, if your fuel is worth more than your money, you might be better off keeping it instead of selling it to the rich guy.  Of course this isn't the case yet when we can still buy 30,000 calories for about three dollars.

Of course the devil is in the details, and I can imagine the specifics of how the rations were determined, especially concerning corporations vs. individuals, would be subject to political tampering (pronounced "lobbying").  Still, its an interesting idea.

The more I think about this, the more I think I had it backwards in my earlier post (in my defense, I had been drinking).  It makes more sense to me to use other means to narrow the wealth gap, such as a more progressive tax code, and then let price do the rationing, either by a carbon tax, which would be preferable, or to let the free market do it, although if you sit back and let the free market cause price rationing, that probably means you also didn't do anything about the wage gap, and all of a sudden the US looks alot more like China and India then we are used to.  The idea of rationing seems like something to reserve as a last ditch effort after things have been really screwed up.
IMHO, this isn't going anywhere.  To list just one show-stopper, the idea of giving people some quota of "energy" (including wind or PV they generate themselves?) is essentially Marxism.  Any system which e.g. allows some people to live off the sale of their government rations is going to be justly ridiculed and attract massive disapproval.
Why in the case of oil, where there is physical shortages in the future, would this be any different than money? If you had the money you just buy credits and use more at any price and if you dont have the money and economy goes down, you just sell your credits and still are left with less?
In one sense, it is currently possible to buy instruments, the value of which changes with the price of oil.  We can buy oil futures or buy shares in an oil or energy ETF. This is a way to hedge against higher energy prices. The same thing could be done with energy coupons.  As demand for energy increased, the value of those held coupons or credits would also increase.  A futures market could also and probably would be developed.

People are concerned with setting overall limits on energy use.  Well, this site is largely devoted to the concept that those limits on oil are here now or will shortly be. OPEC has been setting "artificial" limits on production for years. But somehow, that is fine while having our government set some sort of limit for the public good or the good of the planet is considered fascism.  Apparently, there are those who would rather be subject to the proclivities of a whole host of foreign countries who hate us than subject to an upper limit set or negotiated by our own government.

One very good feature of this system is that those who conserve and plan ahead will be directly awarded for thier frugality and prudence. Every time I say home, it's money in my pocket over and above my transportation expenses.

I'm not really against much in figuring how to get beyond this including gov rationing, I still don't see how this is much different than raising the price?
Raising the prices will kick out low-income citizen form essential consumption. I hope humain ethics will prevent that to hapen. That's the same with taxes on energy.

It is a fact that:

· Real wealth is food, fuel, water, wood for houses, fiber for clothes, raw minerals, electricity, information.

· A country is wealthy that has more of this real stuff used per person.

· Money is only paid to people and is not proportional to real wealth.

· Prices and costs are inverse to real wealth.

· When resources are abundant, standard of living is high, but prices are low.

· When resources are scarce, prices are high, more money goes to bring resources, a few people get rich, but the net contribution to prosperity is small.

· Real wealth is mostly the work of nature and has to be evaluated with a scientific ... measure, EMERGY.

- Howard T. Odum

TEQ gives every citizen the right to use energy. And it's a way to incorporate real wealth in our current money based system.

I don't see why TEQ's couldn't be made to work, we seem to have managed EFTPOS, credit, debit, store and fleet card systems without too much trouble. You'd have to 'run in' the system to be at all sure of the allocations (see industry sabotage of EU carbon trading for what not to allow). The use of a market mechanism is entirely appropriate, making 'Its Marxism!' a bizarre claim. Don't think there is any suggestion people will be able to live off their ration, or never for long (Markets 101).

Thanks Msrs Fleming and Vernon, I'm curious if you've had any thoughts on the scales at which TEQ's might be implemented. National governments are timid and beholden to the status quo, it would be nice if system could be trialed at a regional or town scale. But thats not really possible without completely excluding other suppliers and consumers, correct? (forgive me if answer is in DF's book, have barely started it).

Assuming an internationally standardised carbon card was even possible it comes down to fairness vs the administrative nightmare. I think there are ways to limit personal excesses without such cards;
example 1) tree hugger wannabes and air travel
As with cigarette smokers lay on a guilt trip. Ask them pointedly whether they cycle commuted for 12 months to earn themselves the holiday (btw I think purchased offsets are largely bogus).
example 2) seniors and expensive home heating
As with teenage drinkers, ask for standard ID. Give old folks in all neighbourhoods a subsidised discount for a set amount of heating oil, natgas or electricity.

Abuses and inequities should be minor compared to the huge Cecil B. de Mille production needed for a carbon card. It's easier to carbon tax at major source points like refineries and power plants. Remember we don't yet know the carbon effects of the looming economic slowdown; even coal use could get dragged down.

Sometimes you guys slay me.  OK, I'll whip mine out.  Yup, I biked to work for the past 12 months (my wife works at home), planted 67 trees this past spring, have a woodstove and a 92% efficient gas furnace, buy 40% of our food from a local farm, pick up that food by bike, and grow another 20% ourselves in our back yard.

Now do I get to take my family for a plane trip?

This is essentially interfering with the market procees. It might make you feel good in the short term, but isn't a long term solution. We need higher energy prices in the short term so that alternates (inc. renewables) become economically feasible. Over the longer term it would be better for us to let the market act without interference. What incentive is there to invest in alternates in the scenario presented here?
It might make you feel good in the short term, but isn't a long term solution

Rhetoric without justification.  Non-renewable and polluting resource use should be regulated for the public good.

Over the longer term it would be better for us to let the market act without interference.

It is the "free market" which has created our current problems with energy security, as well as a host of other problems such as overfishing, high levels of pollution and soil degradation.  What is best for multinationals' CEOs is often not best for the citizen.

What incentive is there to invest in alternates in the scenario presented here?

Energy from renewable sources which doesn't produce net CO2 won't require carbon units to buy and will that much be cheaper.

And you think you have the devine god-given right to decide that oil use should be regulated for everyone else?
Somehow we regulate and tax people's personal consumption of alcohol and tobacco (even more personal than oil) without calling ourselves deities.

If we had one world-wide legal system, those hurt by e.g. global warming could, as a class, sue all carbon-emitters as a class and recover damages (or pay offsets to carbon sequesterers).  The award would amount to a carbon tax, but it would have a basis in law and science (or as much as any court award does).  This isn't playing God either, it's doing the best we can as fallible humans.

And if that's wrong, tell me why [gG]od gave us the ability to determine the effects of these things if he didn't want us to make moral judgements on them.

We all have to pay tax one way or another. I don't have a porblem with carbon tax. But the suggestion above is that people shouldn't be allowed to consume more than a certain amount of oil. That is a different thing.
Ideally we should be burning zero oil, right? But who am I to tell you that?
No, it's not that at all.  I'm amazed at how many people here are missing the point.  I thought for sure you'd get it.

TEQs are not a form of rationing, they are a way of increasing the marginal cost of energy above a certain consumption level.  Imagine if we set the threshhold for the TEQs at infinity.  At no point does anyone pay any more than anyone else for fuel.  We essentially have such a system now, or worse.  Someone who makes $300k a year pays the same per gallon as someone who makes $30k a year.  

Now, imagine if we set the threshhold at 2k gallons of fuel per year.  If you use less than that, you pay the fuel market price for that fuel.  If you use more than that, you pay the market price for the first 2k of fuel, and have to pay the secondary market price for the excess.  The secondary market is the TEQ market, where people who used less than 2k gallons sell their extra TEQs.  So the profligate user pays market for the first 2k and market plus the secondary market price for any over that.  The people who use less get to pocket the money their extra TEQs sold for on the secondary market.

You can consume as much as you want and can pay for, but above a certain threshhold you will have to pay extra for the fuel and below the threshhold  you essentially pay progressively less for the fuel the less you use.

Hong Kong Trader, we need to manage a reducing use of oil and other fossil fuels. We need to manage it down to zero, effectively (hopefully over a long period of time). How do you guarantee a continually reducing consumption without rationing, particularly in as fair a way as possible?
The market guarantees that we use less fuel. The price goes up to the point where enough demand is destroyed to match the available supply. You would expect supply to really start to drop off at a price where an alternate is viable so people start switching. So ultimately the market will make it viable to switch to alternates. That sound painless but abviously it is not. I believe this is probably the most effective way to encourage people to switch away from using oil - just let the market act unimpeded. Historically, attempts to intervene with that market process have ended in disaster.

I don't really see the benefit in rationing oil out. Someone has caged it in intelligent sounding language which makes it sound good, but does it actually solve the underlying problem? I don't think so.

Sorry, in line 2 I mean "you would expect demand to really start to drop", not "you would expect supply to really drop".
But the market will only "ration" to current production. What we need is to ration below production, to free up oil that can be used to build alternatives (both in energy and society). Consumption can never go above production (ignoring stocks, for the moment) but that isn't good enough for weaning us off.

You also completely ignored the fairness. Many will be able to continue at current or increased consumption levels as the use by the more financially challenged is squeezed. This may be a concern if that squeeze results in unrest.


Even people who can afford higher oil prices will IN GENERAL (I know not always) choose the economic option. If electric cars are cheaper than oil powered cars then people and infrastructure will switch to electric regardless of whether someone is rich or not. So the best solution is to let oil get expensive and let the market work.

I will say again. IF YOU INTERFERE WITH THE MARKET IT WILL END IN DISASTER. If you mandate that only a certain amount of oil can be sold then oil companies would instantly stop expanding production (ie stop developing new projects) and stop exploring. IT WOLD MAKE THE PROBLEM WORSE NOT BETTER.

I think you overestimate the effect of high fuel costs on those who can afford them. Everyone settles into a particular lifestyle (trying to "improve" it over time, if possible). If you can afford that same lifestyle, even with inflation eating away, you'll probably continue in the same vein, more or less. At the point where you can't afford that lifestyle, others less fortunate than you will have already bombed. Demand for oil is less elastic than other commodities. Scarcity will force changes, rather than those changes coming in a planned way.

You mentioned electric cars but it will take years, if not decades for that to become a viable option for many, ignoring the extra power generation requirements for a fleet of 800 million electric cars. I know that was just an example but the problem is that it's impossible to think of anything that will make a significant difference to the situation.

The market works well in a fairly unconstrained energy environment. When we are talking about the lifeblood of our developed societies, the market is a very poor mechanism for altering our use of that lifeblood or for switching to another blood supply. The added problem is that there is no blood supply (that we know of) that could be used for a complete transfusion. No, if there is any kind of solution for powering down, government intervention is needed and tradeable quotas is the only idea I've heard that comes close to helping.

By the way, I should have added that I wouldn't expect oil companies to instantly halt new production. They are in it to make money. Why would they not want to continue doing that? Obviously, the price of oil would no longer be subject to market forces, but that is simply one more aspect that would need to be addressed in any rationing scheme. Oil is still fairly cheap; setting a fair price, for the energy one gets from oil, could result in an increase, not a decrease in price.

If you think it might stop exploration/production of the really difficult stuff, then you could be right. However, that would not necessarily be a bad thing. The idea is to wean us off oil, not desperately try to extract every last drop we can.

Many wealthy people get wealthy by being careful with money. A penny saved is a penny earned. And BTW it is easier to save a penny than earn a penny. Many wealthy people would take the economic option. Not all, but most

I think he disagreement comes to this; you want us to power down, I want us to retool and repower. If you want to power down rationing will do it. Restrict/Ration everyones use so that the total consumption is capped and oil companies will have no incentive. It would work. However I want us to retool and I firmly understand that the best way to do this is for people to suffer higher prices now so that incentive is built in for people to retool. As in our example above, over time, electric would become more economic than oil as the oil supply dwindles. Yes it would take time, but I still argue that it is better that we take some time to retool than we "power down" and start living like stone age man.

I think if the government forced people to power down you'd have a revolution. People would never accept it. Government would be voted out. Someone promising alternates - nuclear, coal, renewables etc would get voted in. Your "power down" scenario via rationing is just not a realistic scenario if you think about it.
That (revolution) is a different matter. Let's discuss that by all means.

On the question of repowering, I take it that you have a belief that there is some wonderful energy source out there just waiting to be discovered? If not, then we certainly need to repower, but to a lower level.

Let's try to fix the incentive thing. Let's ration individuals and businesses to a level lower than the supply. Then have governments buy the excess oil to build the sustainable infrastructure we'd need for a lower power, zero growth, sustainable society. It will be a big job, it will require lots of energy, lots of oil and gas. Maybe there could even be an element of free market in that portion of the oil?


There is no need for a wonderful energy source to be discovered. We have ample energy surrounding us which is usable. See the post on nuclear energy as another example. It's is just a question of price for it to become economic... which is where the market comes into it.

So I guess the disagreement can be further refined; you believe that none of

 - nuclear fission,
 - nuclear fusion,
 - effeciency gains,
 - methane gas,
 - coal,
 - biodesiel,
 - ethanol,
 - geothermal,
 - wind,
 - solar,  
 - wave,
 - hydrogen,
 - recycling,
 - tar sands,
 - gas
 - anything else I can't think of right now

can provide an alternative in the fullness of time, or infact that even no combination of some or all of these can provide a solution. However I firmly believe that there is not only a solution amongst those, but actually several possible solution. I also believe that the market will be the most effecient way to sort out which.



Fusion is a pipedream right now. I'd love it to be realisable but it's 40 years away, if it can be made to work. Fission has been addressed many times, it's unsustainable. Efficiency gains will be a winner. Methane gas, coal and tar sands are unsustainable. Recycling is not energy but it might conserve some energy (the calculations need to be done), as well as resources. Biodiesel/ethanol are unsustainable, unless in very limited quantities and not increased. Hydrogen is not an energy source. Solar and wind are probably the only sources that can sustainably power our societies, provided we limit the energy we consume.

So taking only the sustainable energy sources, we still need to power down. Of course, it may be that all the little bits together might get you, I and maybe our kids, through our natural lives. In which case, bring it on! However, I'm still dubious of that and dread the world it would leave for my kids' kids (if they have any).

I'm well aware that you believe in a "solution"; that much is obvious. And consequently, it's clear that you would never support any rationing scheme (other than by market forces). However, I don't think your beliefs have a rational basis, so I'm trying to see what might have some chance of giving us some kind of soft landing. TEQs look like a good option, in that respect. Market forces don't.

I never even mentioned Hydrogen. Thanks for adding one more to the list. Your attempt to dismiss these is simplistic. As I said look at the piece on nuclear (I once had great concern like you, but I think you'll find if you make an effort to do a lot of reading it will make you feel better). Also you do in some parts acknowledge that some of these can give some part of a solution. So presumably even you would understand that if you combine these you would at least have a decent contribution. You even say that "solar and wind are probably the only source that can sustainably power out societies, provided we limit the energy we consume". That implies you accept that they represent a big part of the solution. You seem to be contradicting yourself? Do you think we have to "power down" or that wind and solar is enough nevermind the other potential solutions?

If you think that these few flipant comments are sufficient to convince any serious thinker that we can't switch into a combination of the above then I think you are sadly mistaken. To just say it something is unsustainable or bla bla bla isn't enough. You are missing so much.


"I never even mentioned Hydrogen".

Hmm, I'm afraid you did. Probably an attempt to build up a long list in the hope that quantity alone will convince you (since it doesn't convince me). I did look at the article on nuclear; it is wrong on the lifetime of the resource base. It looks like a short term risky enterprise.

"That implies you accept that they represent a big part of the solution. You seem to be contradicting yourself?"

No, I think it's the interpretation of the word "solution" that needs explanation. We need to power down. I can't see a solution in terms of keeping our society pretty much ticking along as it is now, and growing. As far as I can see, solar and wind (hydro can also make a contribution but it is limited and has already had adverse consequences) are the only sources of energy that can be considered potentially large (though not by modern standards of consumption) and sustainable. Consequently, they should form the basis of energy for societies of the future. Whilst we have plenty of energy (as some keep telling us), we should use it to build energy infrastructure based on solar and wind.

"If you think that these few flipant comments are sufficient to convince any serious thinker"

I don't think they were flippant but space is limited here. There have been plenty of web pages devoted to these energy sources or carriers (as hydrogen is) and it doesn't seem to me that they can provide the solution that you seem to seek, even taken together. It is really only worth considering potentially sustainable energy sources. So that leaves us with methane (presumably from biological "waste"), ethanol, biodiesel, wind, solar, wave and fusion. The other 7 that you mentioned are clearly not sustainable. Fusion is still a pipedream and will require a continuing stable society, with a solid energy infrastructure, to come to anything, if it does turn out to be feasible. So, aside from wind and solar, that leaves methane gas, which is very limited unless we try for the risky methane hydrates, biodiesel and ethanol, which will have to compete with food for land (and be subject to nature's whim), or wave, which I've read is also limited. Remember that any energy source, or combination of sources, that claims to be a solution (in terms of allowing current society to continue) must be capable of infinite growth. Since I assume you don't believe that any energy source has that capability on earth, then there is clearly no "solution". We have to learn to live with less energy.

"To just say it something is unsustainable or bla bla bla isn't enough."

Hold on, are you saying that an unsustainable energy source can be part of "the solution"?


two comments and then I will stop:

  1. unsustainable energy source can be PART OF the solution. Many would say that oil is unsustainable but it has seen us through for many decades. So, absolutely, gas, coal, nuclear can always help, particularly in the near term.

  2. This is your comment:

"As far as I can see, solar and wind (hydro can also make a contribution but it is limited and has already had adverse consequences) are the only sources of energy that can be considered potentially large (though not by modern standards of consumption) and sustainable."

Have you actualy worked out how much energy the sun is delivering our planet (I have). It is absolutely massive compared to our consumption of energy. Your statement is flat wrong.

I am not going to continue trying to correct your assumptions, so this is my last response. Please just do the work, do some reading. It will make you feel a lot better.

unsustainable energy source can be PART OF the solution.
I hope not. Perhaps if we'd realised the unsustainability of oil, when we started on this path, we might have used it to build only sustainable infrastructure. To now know an energy source is unsustainable, but use is as though it were sustainable is just placing an unnecessary burden on generations to come. Wouldn't figuring out a sustainable way to live be a better solution? Oil got us through a few decades because there was enough of it to enable us to become totally dependent on it for the way we live now.
Your statement is flat wrong.
I'm afraid not. I was referring to the harnessing of the sun's energy. It takes resources and infrastructure to do that. It may get to the earth in enormous quantities, but we will never be able to harness more than a tiny fraction of it (partly because of limited resources, partly because of energy loss in transformation). Also, what is technically feasible may not be practical and we certainly couldn't grow solar use indefinitely.
I am not going to continue trying to correct your assumptions
Thanks for the exchange; I hope I've made you examine one or two of your own assumptions also.
Just want to tidy up one thing here. HK trader, this is not a rationing system in the sense you have in mind. No one will be putting a limit on fuel use, no one telling oil companies how much to produce or release into the market.

Rather, it is (as someone has pointed out) a secondary cost to those who use more than their quota, and a secondary income for those who use less. Hence it is designed to provide an incentive to reduce reliance on CO2, not a ration on it. It simply rewards those who reduce their carbon use at the expense of those who don't.

In terms of the free market, the government is always playing with it, and not always to bad effect. Subsidizing transport infrastructure, for example, has a huge effect on the market.

I do agree with you, though, that the chances of anyone getting elected on this ticket are (depressingly, IMO) minute. But to all the pessimists, lets stop moaning about human nature and start trying to persuade people that this is a good idea ?

TEQ is all about a market solluction with citizen, companies and the gournment acting on a new market. The TEQ scheme is creating a new market for the climate change externalities. For gournements is the free-rider problem {1} a big issue when devoloping policies.

{1} free riders are actors who consume more than their fair share of a resource, or shoulder less than a fair share of the costs of its production. The free rider problem is the question of how to prevent free riding from taking place, or at least limit its negative effects.

The very simple solution to the conservation problem requires a political martyr: a no-exceptions major tax on finite hydrocarbons, at the refinery + import level.

Nothing else will amount to much of anything, and everything else causes an unnecessary fragility with the high degree of sophistication required.

If you want to survive it politically as a world leader, you harp for a year beforehand on the very real dangers of peak energy production.  The major market crash resulting from this you blame on energy prices, then institute your taxes, and pour the money into development grants + criteria-based rewards(ex: Accept the first plausible bid on a 1 gigawatt solar plant at 1/10 the current per-watt price) for every alternative energy program under the sun - employing a good deal of the people who just lost their jobs.

Carbon tax: I agree with Boof and Squalish above, why not just have a carbon tax? Isn't it much simpler? It can even be  revenue-neutral, offset by reductions in say income tax or payroll tax.
For those that pay little or no tax, it may not be possible to offset the carbon tax with an appropriate reduction in income tax. A quota scheme, if it could be made to work, would be fair and would guarantee consumption reductions, unlike a carbon tax. There is no tax implication (thought the administration of the scheme would have to be paid for) and so would be tax neutral for everyone.

If we want to guarantee a reduction in fossil fuel use (in an orderly fashion), I can't see how anything other than a quota system (in a free society) could work and be fair, in principle.

In the case of oil, we need to manage the transition down. TEQs would be a fair way of doing this, provided everyone has a quota. Those who dismiss the idea need to propose a way of reducing demand in an orderly way, and in a way that is seen as fair to everyone.

People may pool quotas, if desired, and those who do best in reducing their energy demand will gain from trading their excess.

I'm not sure how one deals with individual businesses or if new businesses are allowed, by reducing other quotas.

Quotas for all energy is a different matter. Only publicly retailed energy need have quotas. Provided one could build one's own energy infrastructure with one's own energy quota, then private energy should be exempt.


 "Those who dismiss the idea need to propose a way of reducing demand in an orderly way, and in a way that is seen as fair to everyone."

Why should I propose something I do not feel is humanly possible?

"TEQs would be a fair way of doing this, provided everyone has a quota."

Why would it be fair? Who decides to set the quota? An example from where I live, the SF bay area:

Rich - generally white - people can afford to live in San Francisco where they don't have to communte to their jobs.

Poor people - often black or latino - have to live further away and commute into the city.

If the energy quota is the same for all, right off the bat it favors rich white people at least in my example.

Then you know what happens? Somebody - a wanna be dictator - tells the poor people that the rich people (probably decides to blame the Jews, as usual) just want to keep them isolated in the ghettos. Then you get an energy quota rebellion.

Then the rich white people respond, "Well the poor and minorities are having too many children" and this is screwing up the energy quota system. So a solution - energy police to monitor the reproductive habits of poor people is introduced.

So tell me again why this is fair and/or how it gets away from the problems we already have? (the problems listed above are present to some degree or another already)


Try some imagination. Do you think it is utterly impossible to come up with a fair quota system? For example, an initial pass at the system might take people's location and job into consideration. Those living closer to work would get less and those living further away would get more. Those without jobs would get some standardised allocation, which might be based on distance from industrial centres, or somesuch. The price of fuel would not be low, so there would be an incentive to reduce the distance between work and home, unless you had no job, in which case, just sell some of your ration. There might even be a factor in the size of house. But all of these factors could be adjusted over time to incentivise people to make lower energy choices. Businesses would need to have a variable ration also.

Hey, don't knock the principle just because you can't figure out a practical way to run it.

However, you may be right that people won't accept it but that may depend on the information they are given. It would take a massive education campaign before introduction.

people living closer to work get less TEQs? Then f--k it. I work from home and if I'm not going to get my fair share, as much as some fool driving 40 miles to work I ain't supporting it.  Why should I be penalized for figuring out a way to work from home?

See how that works?

What happens if one county's energy resource is vastly different from anothers? Does that populace get a higher allowance? Does that country even opt into the sceme. Are you going to tell Iran they have too much oil? I don't see how this can work on an international basis, let alone one where the geopolitical map is constantly shifting.
The idea for a simple hydrocarbon tax isn't really environmental based, that's a side benefit which happens to be viable in its own right.  The real target is for everyone to be energy independant indefinitely, which just happens to avoid greenhouse gasses as well.

I am of the (sometimes thought optimistic) opinion that we can continue at our current rate of consumption - that we can even bring the rest of the world much closer to that standard of living, through batshit crazy amounts of development in all non-hydrocarbon energy sources.

The alternative is waiting for a very rapid dropoff in available energy production.  I don't believe that being 25% into the curve will be the same as 75% in - increased, competition, custom, and an emergency desire to keep things going compound to temporarily postpone, then greatly decrease the after-peak production.

Cutting our energy use(mostly for transportation) by 50% in 5 or 10 years in the face of rapidly growing economies is a non-negligible problem, one that could very well topple the Western World governments, cause a collapse of the world economic system, and very possibly start WW3 over up-front military control of the remaining fields.

Being controlled by our addiction is where we get into trouble, as a planet(and at every level below that).  If everyone was able to crow, process, and consume their own cocaine, for example, we would just have a few more addicts ODing, rather than a giant criminal underworld with hundreds of killings a day.

I think that if we were to cut the crap and realize that we're in a losing position, and dedicate ourselves to becoming energy independant by the end of the next decade, disaster can be averted.  But it will require an effort approaching what we put into a world war - a major percentage of the budget, technology, and laborers of entire nations - to implement it fully.

note: (Finally RTFA and realized this was put before parliament) My ideas pertain to the US problem, though I suspect they're somewhat apt in the rest of the developed world, the UK included.  The UK doesn't have the quit ehte same level of inherent economic dependancy on oil that we do - they already tax it heavily, and thus they have a major transit infrastructure in place.

Anyway, my point is that market forces, self interest, and politics will always attempt to subvert a quota system, in part because a quota system really hurts them at times.  Your dad died 1000km away and you don't have the quota to make the funeral?  tough luck.

+50% or +100% the cost of nat gas, coal, and oil (which governments are currently stronger enough than corporations to do, in the US/EU, if the ones elected had the desire) and all the relatively trivial to fix but impossible-to-regulate minutia of capitalist energy waste(consumer and business) will be fixed overnight, alternate means of power will spring up and be funded on a profitable basis, society will be restructured around not using quite so much energy.

society will be restructured around not using quite so much energy
A rather rosy view. Society must make do without: oil, then gas, then coal, then uranium (not necessarily in quite that order). I think we are looking at something a bit stronger than "not quite so much energy." Of course, it may be that these energy resources will take a large number of decades to fade away but it's clear that society will have to make do with a LOT less energy.
The question isn't whether we should have rationing, the question is, what system do we use to ration scarce resources. The market system is a rationing system; those who have less money will be squeezed out of the market as prices go up. Poor countries and people will drop out of the market as prices go up.

The core question is, how do we set an overall limit on carbon/energy  production and how do we live under that limit. Waiting for the market to give us the appropriate signals is a recipe for disaster as we go over the tipping point. Carbon or energy  taxes might eventually work, but we will be flying blind until such point that we reach the appropriate price level. We will be constantly adjusting taxes and credits until such time as demand is reduced sufficiently.  Again, by the time we reach the appropriate taxation level, we may have lost some precious time. In any event, a carbon/energy tax scheme is still a rationing scheme by another name. In this case, we change the rules under which the market operates, but we are still rationing a scarce resource and "forcing" people to make choices they wouldn't otherwise make under an unregulated market system.

Direct rationing sets carbon limits up front.  There is no question that we are mandating behavior, but this doesn't mean that a market system would not be in play. There would still be a market for carbon credits. And within that market, people are free to buy or sell credits as their individual circumstances and ability to pay warrant. Yes, the very rich would end up consuming what they want, but what else is new. At least, in this instance, the poor and/or the frugal would get some direct economic benefit form their behavior over and above what ehy currently get, which is, maybe, a pat on the back, as everyone else consumes their ass off.  Personally, my current "sacrifices" do little or nothing to actually change the situation.  The vast majority of people are  not like me and I don't expect them to be. It would be nice and would encourage others otherwise not so inclined if they could get some direct benefit from a carbon trading system.

Higher taxes with rebates to low and moderate income people might do the job eventually. However, I think a carbon credit system would be better at giving people immediate feedback for their behavior. The lag time between behavior and payback is much slower under a tax and credit system.

As far as peak oil is concerned, by the time prices really shoot up, it will probably be too late for most people to adjust. Many of us here have or are taking steps to live in an oil deficient world. The vast majority will just end up fuming at the pumps.

As far as fascism is concerned, I think we currently live under a system which very aptly meets the classic definition of fascism.  A carbon trading or taxation system won't change that and has nothing to do with fascism.

And just think.  For birthdays and other special occassions, we would no longer need to scratch our heads as to what to give our loved ones or friends.  A couple of energy/carbon coupons would be the gift that keeps on giving.

As long as you have a diminishing supply of energy and a rapidly increasing population you will never be able to stabilize things.
The only real way to ever have a population with a quality life style over an extended period is to selectively reduce the population to a sustainable quantity at the desired quality of life desired.
For most of us that quality of life is somewhere in the area of where we are now and that means reducing the 300 million population of the USA to about 100 million over a relatively short period. And doing so in a manner that keeps the best and brightest and eliminates the less desirables.
I know of no "nice" way of doing this. But fairly rapid population reduction is the only real long term solution to the declining energy problem.
The "other solution" is to just let nature take it's course and lose most of the best and brightest to the predatations of the "mean and ugly".
The question is what sacrafices are we as a nation willing to make to ensure a "better life" for future generations and the eventual expansion of our species throughout the universe?
That's why we also need TBQs, Tradeable Birth Quotas.
you may as well try to ration orgasms.
You can just stop socializing the costs of children, including medical care for births.
TEQ's would reduce everybodies perceived economic opportunity now and into the future, and there is evidence that that is the real convincer in reducing fertility & population growth.

Even if TEQ's have no effect on population, you can't blame them for not solving a problem that science and religion are still making worse.

My objections to this scheme are not just the breath taking huberis but the assumptions and paradoxes implied by the scheme.

  • Failure of Government (While increasing Government control). Government as both incompetent and lacking in any forsight. Subsituted for by non-government actors.

  • Market Solutions (While imposing rationing).
Market Failure with veener of a market solution (For the non-existant surplus).

  • Internal rationing rather than addressing the fundimental problems of supply/demand. (ID Cards, Road Pricing, TEQ's)

  • Power dowen by government dictat and the assumptions behind powerdown. (See Nuclear Power in leaflet - Uranium has been discussed on TOD, and the consensus was not a shortage of fisile material).

  • Scope: world population on an individual basis (insane huberis).

  • While I understand and accept limits to growth, there are other solutions than rationing. Population measures in poorer contries, other than fossel fuel sources of energy (including Nuclear Power).

We are been sold a whole package of assuptions I don't accept in a poorly designed scheme intended to compensate Governnment and Market Failure while failing to address the problem. You really have to subscibe to die off to find any merit in these proposals.

This is true paradox of insanity, non-government fascism, and corporative.  The problems are not addressed, but the solutions are imposed by non-government actors, with coporative marketing veneer.

Environmental Fascism:
2. Oppressive, dictatorial control.

TEQ's  are in conflict with Road Pricing.,,2087-2300741,00.html

Fascism is in vogue!

Which suffers from the same problems.

We need to address the fundimental problems we face, with a view to resolving them, not just accept rationing. Then in the case of extremis, we may need to impose rationing, but not by huge investment in new elaborate rationing and control systems, and pre-emptive rationing.

Government is incompetent relevent to energy.
Markets fail unless in excess supply.

Let just accept the above and impose rationing.

I want action to address the problems, even if the rest of the lemmings are wish to follow David Flemming off the energy cliff to power down utopia.

Government incompetency is clearly going to be a serious problem if you were trying to implement this scheme. Fair enough.

But is it a government imposed power-down ? I thought the idea would be to set the quotas for non-renewables usage. Then it would be a government imposed carbon-down (which would de facto mean a reduction in energy use, but not by government dictat, but failure of these beautiful 'market-forces' everyone keeps raving about).

TEQs would be a reward for those who use less CO2 at the expense of those who use more. That is not fascism. In effect it would act like a two-tier tax system. The first level of tax would, as it does now, go to the government (is that fascism ?). The second level of tax would go to those who aren't using as much CO2 (is that really fascist ?).
Taxes on fuel are ways of redistributing wealth (by Government Dictat, and all that). TEQs redistribute wealth direct to those who are doing their bit to keep us clinging on to this planet, from those who are not. I really don't get the supposed (moral) problem ?

TEQs may not, as you say, be implementable. But its annoying to get caught up in what seem to be the wrong issues (its 'moral worth' or effects on personal 'freedom'). As someone noted, the sort of freedom we are talking about looks more like freeloading to me.

Another call for Rationing. (See Energy Bulletin)

Acceptable rationing (Growth in low cost Air travel - From,,1838313,00.html

We need  to strive for perpetual motion, not accept good intentions in the contest of the scenarios given by Foresight. Infrastructure_Futures/the_scenarios_2055.pdf

"Perpetual Motion describes a society driven by constant information, consumption and competition. In this world, instant communication and continuing globalisation have fuelled growth: demand for travel remains strong.

"Good Intentions describes a world in which the need to reduce carbon emissions constrains personal mobility. A tough national surveillance system ensures that people travel only if they have sufficient carbon `points'.
Intelligent cars monitor and report on the environmental cost of journeys. In-car systems adjust speed to minimise emissions. Traffic volumes have fallen and mass transportation is used more widely."

But we are not even considering investing in the mass transportation systems (High Speed Rail - National, Light Rail Local), of good intentions but the total faiure that is rationing.

A justification for road pricing? Infrastructure_Futures/Smart_ProtocolsIntelligentCharging.pdf

We need to provide attractive alternatives, not just price people off the public road infrastruture, when few viable alternatives are available (e.g. Rail already oversubscribed and expensive).

Rationing is a failure of both Government and Markets.
We should not accept rationing as the first or default solution.

D.Tomlinson, you are criticising DF's proposal for not being a universal solution to the entire set of problems we face - give the guy a break! Of course investment in rail infrastructure is required, and TEQ's will force that. Rationing is no more a failure of markets than imperfect information or tariffs (both banal realities), it is merely a step away from the neoliberal bible that pretends market intervention is a bad thing, except of course for 'far sighted' government grants/tax concessions/infrastructure cofunding. Funny how so few complain about the daily market failures that benefit private profit.
"Good Intentions describes a world in which the need to reduce carbon emissions constrains personal mobility. A tough national surveillance system ensures that people travel only if they have sufficient carbon `points'.


Why don't we just jam a RFID tracking unit up everybody's ass to make sure they don't burn too much energy?

"Why don't we just jam a RFID tracking unit up everybody's ass to make sure they don't burn too much energy?"

And you think this proposal isn't on somebody's table, somewhere?

I think you'll see forced RFID insertion as a replacement for ID and these will absolutely be required if you want to access any thing that requires money.

At the same time we'll see the end of physical money. Restricted travel. Enforced child limits. You know the drill.

When we get to this point I'd rather be in the US than the UK. All that lovely ammo. All those lovely weapons. We're gunna be totally fucked here in the UK.

Good luck for the future! :)

I don't feel comfortable with this. Surely any form of rationing is artifically reducing demand, and any associated price spike.

But this price spike is exactly what we need:
i) To wake people (and governments) up, that there is a problem
ii) To get the oil companies, especially the slow thinking NOC's to get investing in drills and get more oil out of the ground.

An additional form of rationing (in addition to price) obscures market signals, and ceteris paribas means a lower peak prices, and therefore less investment going forward by oil co's and therefore a steeper (and more disasterous) down slope on the peak. Any form of rationing will reduce the equilibirium price level and reduce the incentives to drill marginal projects.

A price spike, combined with the realisation that this is a longer term problem will push the longer dated oil futures curve up nicely. This is exactly what the IOC's/NOC's need to sell into, to hedge their more marginal projects and insure breakeven.

We need to offset the peak with more drilling!

There's more oil out there and we need to get at it ASAP to offset a steep decline. Like in TheLastSasquatch's energy parable, we need to divert more resources (GDP etc.) to the energy sector to sustain our lifestyle as long as possible (nuclear power stations require 5yrs to build, coal probably about 3yrs..) and I cannot see how acting to reduce the demand artificially preemptively is going to help.

Prices will do the rationing and send the correct signals if peak oil becomes accepted as fact. Getting peak oil accepted is the hurdle that needs to be cleared - markets need to connect high energy prices with peak oil, not the current middle east side-show.

"We need to offset the peak with more drilling"

 You mean just how they solved the problem in Texas!! Dream on. You've missed the whole point of peak oil. Drill your ass off. You will still do little or nothing to avoid the peak.

If you do nothing you face a steep decline. If you can bring smaller fields on you can reduce the gradient of the down-slope.

If you create dis-incentives to bring new fields on it will be worse.

We don't need more drilling, we need to bring human sized hampster wheels online! Round up all the fat and the stupid people and get 'em on those wheels. 24 hours a day, every day. All the electricity a body could hope for! When they die, turn 'em into food. This way the fat and the stupid people will not only be self supporting, they'll be eliminated. But wait! What happens whe we run out of fat and stupid people? What happens when we reach the peak of fat and stupid people? Shit! what are we gunna do? I know, let's start making more people! But wait! We've got rid of a whole lotta fat and stupid people. That means we'll hafta use less fat and less stupid people. But wait. While we're using them we'll hafta get the remaining fat and stupid people to breed. But wait. It takes ten or twelve years to get a fat or stupid person into that bloody wheel.

Boy, guess that idea was about as useful as "We need to offset the peak with more drilling."

I thought this sounded a lot like the TEQs scheme:

Published on 19 Jul 2006 by Guardian Unlimited. Archived on 20 Jul 2006.
UK: Minister unveils carbon swipe-card plan
by David Adam and David Batty

The environment minister, David Miliband, today unveiled a radical plan to cut greenhouse gas emissions by charging individuals for the amount of carbon they use.

Under the proposals, consumers would carry bank cards that record their personal carbon usage. Those who use more energy - with big cars and foreign holidays - would have to buy more carbon points, while those who consume less - those without cars, or people with solar power - would be able to sell their carbon points.

Under the scheme, all UK citizens from the Queen down would be allocated an identical annual carbon allowance, stored as points on an electronic card similar to Air Miles or supermarket loyalty cards.

Points would be deducted at point of sale for every purchase of non-renewable energy. People who did not use their full allocation, such as families who do not own a car, would be able to sell their surplus carbon points into a central bank.

- adam at energy bulletin

It is the same scheme essentially.
David Fleming first suggested it, but its implementation has been looked at in detail (eg for the specific UK situation) by the Tyndall centre for climate change as well as UK govt departments.

Some of the negative reactions against it here on TOD appear to be more ideological/cultural than practical. Over on the UK side of the atlantic, the idea of rationing, or accepting some personal restriction for the sake of the greater good is more acceptable perhap than in the US.

Shez, as I understand it, there are several significant differences between the scheme that the UK government has proposed and the one David Fleming has formulated; not least that the latter is meant to include all individuals and businesses, is designed to be much less bureaucratic in its implementation and more resilient, should there be less than 100% take up.

I completely agree on your other point that Americans are culturally less able to accept the notion of rationing due to their different, collective or shared cultural and political history. The point the critics of TEQs miss however is that rationing is going to happen, whether or not TEQs are introduced, it is just a question of whether we as a society choose to manage the process to reduce social stress and suffering. Essentially it's the same rational that led governments to introduce food rationing in WW2.

I would suggest that we all spend a little more time re-reading and considering the TEQs proposal before being so quick to judge it. The idea is simple to grasp at the highest level, but successful implementation means that policy makers and those who hope to influence them need to understand and think through how it would work in practice - the devil is in the detail as they say.
Indeed - the proposed scheme is a Personal Carbon Allowance scheme, of which Mr Fleming says:

An individuals-only scheme, of the kind described as "Personal Carbon Allowances", if it ever reached the point of implementation, would break down with such effect that it could be expected to rule out an effective carbon-rationing scheme of any kind for the foreseeable future.

So - foolish mistake or cunning pre-emption?

I think an important difference is that in the Fleming version of TEQs individuals, government agencies and firms are treated as equivalent players.  This is rather important and the government does not appear to have grasped the significance yet.