Carbon credit card

David Miliband, the Environment Secretary, is expected to announce a proposal for carbon "credit cards" for every citizen. People would receive an annual allowance to use on food, travel and energy and it would be possible to buy or sell credit. This, as carbon quotas on businesses, will not be the solution to climate change. It will only enforce the current situation.    



The big winner of this one will be the company that wins the contract for provision of the IT system that would be needed to make this possible. Most economists agree that the transaction costs of such a proposal far outweigh the benefits. Even the people who developed the idea (the Tyndall Centre) admit that it could take nine years to implement the system, and are so afraid of the cost implications that they have so far refused to put a number on how much they think it would cost.

This is rationing by another name. Rationing has never succeeded in ensuring that everyone got the same. The difference between market- and state-allocation, is that in the market those who work hard or provide a valuable service get a bigger share, whereas under government-allocation those who have the right connections or who ignore the law get a bigger share.

And if it were possible to ensure everyone got the same regardless of income, the Government would successfully have destroyed the main reason to work hard to earn more money. Rationing is a way of guaranteeing that everyone has bugger all, except for the crooks who find a way round it. It delivers a worse, not a better, outcome for everyone. Soviet Russia and Communist China demonstrated that. Milliband must prepare to join the exalted ranks of Stalin and Mao.