Tradable Energy Quotas: A Policy Framework For Peak Oil And Climate Change

The severity of the climate emergency is widely recognised, yet the other side of our energy
crisis is less commonly discussed. With UK oil production in decline for a decade now, and
global oil production possibly having peaked in 2008, there is a real tension between our need
for energy and our obligation to reduce our usage of high-carbon fuels. Both sides of the
challenge bring real urgency.

With the pace of oil and gas depletion quickening, Governments must put in place safeguards
not only against energy price increases, but also against outright scarcity of fuels. An energy
rationing system must be ready to prevent the intense competition for fuels that will otherwise
develop, and to ensure that every energy-user can access their fair share. Such a system must
also support efforts to reduce our dependence on fossil fuels, while guaranteeing that we meet
the Climate Change Act

The model of Tradable Energy Quotas (TEQs), first published in 1996, was designed from the
outset to meet these requirements and, crucially, to engage with and motivate all energy users to
apply their creativity and ingenuity to the challenge. It is usually taken to be self-evident in the
field of energy/climate policy that energy users need a structure of financial incentives and
penalties if they are to take the necessary action to reduce their dependency on fossil fuels, but
these crude assumptions in the field of human behaviour do not sit well alongside the
sophisticated climate science and brilliant technology being brought to bear. The TEQs model,
by contrast, applies well-established principles from the field of motivation in bringing individual
aims into alignment with the collective need to phase-out fossil fuel dependency and carbon
emissions.

The design of TEQs is based on the insight that all emissions and energy use within a national
economy can be covered simply and efficiently without requiring the measurement of emissions