Dirty talk

Last year, the inland revenue gave me a tax audit. This year, I've just given myself a carbon audit. Neither was much fun, but at least I passed the tax audit with colours flying and reputation spotless. I wish I could say the same about the carbon audit, but I can't. I failed with ignominy.

How much carbon dioxide did I release into the atmosphere in 2001 and how does that compare with my "fair share" of the amount permissible under the Kyoto Protocol? That's what a carbon audit is all about.

In Bonn last summer, developed countries, with the exception of the US, agreed to cut back gross atmos pheric carbon dioxide emissions to their 1990 level until 2008, and to reduce them steadily thereafter. The 1990 benchmark for the whole world is 21,500m tonnes of carbon dioxide - a mindbogglingly huge figure until we look at it per person.

What is my fair share of this total? Internationally, there is little agreement on whether heavy emitters such as the US and Europe should be allowed proportionately bigger allowances than developing countries, or if tropical countries get smaller allowances than cold countries.

Cutting through the special pleading, most of us non-experts might eventually agree that basic fairness calls for equal carbon dioxide emission rights for each adult alive. As of mid-2001, the UN reckoned the world contained 3,944 million adults. So the Kyoto emission benchmark shrinks to a far from mindboggling 5.5 tonnes of carbon dioxide per adult per year.

Few of us in this country come out looking good. The UK last year emitted 558m tonnes of carbon dioxide, or 12 tonnes for each of the 46.2 million adults - more than twice our Kyoto "fair share".

It is not easy to discover how to carbon audit oneself. There are a few websites, but they are not comprehensive and I wanted to include the indirect emissions that my household is responsible for. Staff at the DTI and the office of national statistics pointed me towards many useful data sources, including a 76-sector input-output model of the UK "emissions economy".

There are two people in my household. The table in the box shows that directly and indirectly we emitted into the atmosphere a rather shameful 33 tonnes of carbon dioxide during 2001.

By counting all forms of our consumption, including our per capita share of public goods, this table captures our share of all industrial and state carbon dioxide emissions, as well as those from our own direct personal usage. For example, food and beverages includes the carbon dioxide emitted by farm tractors and the fuel used by delivery lorries, what is emitted when making the steel to make the delivery lorries, and so forth.

It's one thing to know that we are 22 tonnes in excess of our fair share of Kyoto carbon dioxide emissions, but another to figure out what to do about it. Cutting down on air travel looks an obvious target, but my wife and I have grandchildren scattered round the globe and we have the leisure time to visit many interesting places. To give up air travel is a step we would be most reluctant to take.

We use a lot of gas, but with a leaky old house that's hardly surprising. Actually, without the gas and the air travel we would be within our Kyoto "fair share". This is not too surprising either, given that we are both retired and no longer need to make emission intensive purchases of the kind required by young people setting up a home and raising a family.

If we are reluctant to make the sacrifices needed to reduce our carbon dioxide emissions, another possibility might be to sequester those 22 tonnes by planting trees. Roger Kayes, an Oxford-based environmental consultant, reckons that a hectare of broadleaf forest can sequester about 5.5 tonnes of carbon dioxide each year for 40 years. If we want to follow this route, my wife and I would have to buy land and then plant and tend about 10 acres of forest. It sounds like an expensive nuisance, one that will dump on our children the problem of what to do with mum and dad's timber when we die. If they burn it in their grates then nothing will have been achieved.

What we need to do is to heat our house affordably, using renewable energy rather than gas. Nuclear is tricky because it uses a phenomenal amount of energy in its whole life-time carbon audit. Ideally, we might travel by hydrogen-powered planes, but that's some time in the future. In the meantime, following the government's decisison to start a carbon trading scheme, buying somebody else's Kyoto share looks like a stopgap solution.

There are a great many people in this world who are too poor to use anything like their full 5.5-tonne annual share. My wife and I need to buy one tonne from each of 22 under-users, in exchange for a commitment by each of them not to release into the atmosphere more than 4.5 tonnes of carbon dioxide next year.

Two questions arise: what will it cost, and how can I arrange it? Nicola Steen, vice-president for transactions at www.CO2e.com, the emissions trading arm of Cantor Fitzgerald and one of the leading players in the emerging emissions market, says trading is mainly driven by companies buying emission entitlements in anticipation of coming regulation. But she also sees the early stages of a retail market developing.

Meanwhile, power companies now offer clean electricity for sale at a premium of 0.25p per kWh. This equates to about £6 per tonne of carbon dioxide avoided. So a permit to emit one tonne of carbon dioxide seems to be worth about £6 today. On this basis, I owe my 22 counterparties about £130 between them.

What would happen if we all did this? Our payment for permits to cover the 300m tonnes of carbon dioxide emitted from the UK each year in excess of our individual Kyoto "fair shares", would amount to £1.8bn, or about 0.2% of the UK's GDP. Thus, through a commercial transaction, not through charity, we would be transferring a great deal of money to the developing world - although it would still be a long way from the 0.7% GDP transfer target sought by the UN.

So what stops me going ahead? Unfortunately, I don't know 22 under-users; I doubt if many of us do. It looks as though an opportunity exists for an ethical NGO, working in development, to set up a person-to-person carbon dioxide emission trading scheme to fill this gap. I'm ready to be a founder client.

For computational details, email Richard Barry at rbjb@10barnhill.fsnet.co.uk.