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What are the tools that the RCC advocates for?

1. Energy entitlement scheme

The proposed scheme aims to reduce non-renewable energy consumption at EU level and facilitate the shifting to renewable energy sources and higher efficiency at the same time. The EU and national non-renewable energy use target should be progressively lowered each year, until the EU refits into its ecological share. The proposed regulatory system is based on 3 + 1 pillars.

Pillar 1: The Energy Entitlement
Energy consumption entitlements of annually decreasing quantities would be allocated among the individual consumers (on an equal per capita basis) and public and private consumer groups. Those, who save a part of their allocated entitlements, can sell their remaining entitlements through a quota manager organization to those, who consume more than their allocated consumption entitlement. The quota manager organization sells the quota in the national currency, and buys the remaining quota in “quota money”. International trade among EU MSs is realised based on the same principles.

Pillar 2: Market for Environmental Goods and Services
The market for environmental goods and services is an open market operating according to pre-defined environmental and ethical rules including aspects of sustainability and market considerations. The “quota money” received from selling energy consumption entitlements could be exchanged to certified products and services (e.g. organic food, insulation of buildings for energy saving, renewable energy investments) in this ‘eco-labelled’ secondary market.

Pillar 3: The Revolving Fund
The Revolving Fund provides the opportunity for everyone, both energy producers and consumers, to achieve savings through energy efficiency and renewable energy investments. The Revolving Fund provides interest free loan in “quota money” with a payback period adjusted to the energy savings or income generation realised through the investment.

Pillar +1: Support Service The Support Service aims to provide advice on lifestyle, planning, social and environmental issues, as well.

Economic benefits of the energy entitlement scheme:

  • Reducing the EU’s dependency on non-renewable energy through the reduction of their use,
  • Increasing the competitiveness of EU businesses, as on one hand they become more efficient in the operation, and on the other hand they can develop more resource and energy efficient products for the global market,
  • Providing the necessary investment capital also for SMEs to invest in energy efficient operation, as well as to develop goods and services with high energy efficiency,
  • Providing the necessary investment capital for households to realise energy efficiency investments,
  • Boosting the demand for energy efficient goods and services as a result of the quotas,
  • Boosting the demand of environmentally friendly goods (e.g. organic products) and services through the use of quota money on the secondary market,
  • Freeing up funds from the state and the EU budget for other social purposes, as after the kick-off stage the revolving fund and the scheme itself is fully maintained by the public and private consumers directly (no need for continuous expensive investments for energy efficiency from state budgets).

Social benefits of the energy entitlement scheme:

  • Creating green jobs directly (in renewable energy and housing sectors, R&D, etc.)
  • Creating jobs indirectly in the more labour intensive sectors through the need to reduce non-renewable energy use (as a substitution of human labour in production)
  • Reducing the expenses of households, especially of the poor (those consuming less energy),
  • Transforming values and consumer behaviour through creating personal interests with the quotas
  • Greater access of consumers to environmentally friendly goods and services with the use of quota money, which contributes to wellbeing (in)directly.

Environmental benefits of the energy entitlement scheme:

  • Radically reducing non-renewable (also fossil) energy use at a scale necessary to limit global warming to 2°,
  • Effectively mitigating climate change with the use of an input side regulatory tool (covering all sectors in the economy preventing carbon leakage),
  • Indirectly reducing resource use through the reduction non-renewable energy use, a main environmental pressure leading ecosystem degradation and biodiversity loss.

2. TEQs (Tradable Energy Quotas)

TEQs (Tradable Energy Quotas) is an electronic system for rationing energy use, designed to be implemented at the national scale, and covering all sectors of a national economy. It has been the subject of extensive research over the past fifteen years.

There are two main reasons why such a scheme may be needed:

  • Climate change: to guarantee achieving national carbon reduction targets.
  • Energy supply: to maintain a fair distribution of fuel and electricity during shortages.

TEQs (pronounced “tex”) are measured in units. Every adult is given an equal free Entitlement of TEQs units each week. Other energy users (Government, industry etc.) bid for their units at a weekly auction (Tender). When you buy fuel or energy, such as petrol for your car, units corresponding to the amount of energy you have bought are deducted from your TEQs account, in addition to your money payment. This is the only time you need TEQs units, and transactions are generally automatic, using credit-card or direct-debit technology.

All fuels and electricity supplies carry a “carbon rating” in units; one unit represents one kilogram of carbon dioxide – or the equivalent in other greenhouse gases – released in the fuel’s production and use.  This determines how many units are needed to make a purchase (thus giving competitive advantage to low-carbon energy). If you use less than your Entitlement of units, you can sell your surplus. If you need more, you can buy them. All trading takes place at a single national price, which rises and falls in line with demand. Buying and selling is as easy as topping up credit on a mobile phone.

The total number of units available in the country is set out in advance in the TEQs Budget. The size of the Budget goes down year-by-year – step-by-step, like a staircase.  This gives long-term clarity to the economy and investors.

The Budget is set by the Committee on Climate Change, which is independent of the Government. The Government is itself bound by the TEQs scheme; its role is to support the country in thriving on the available carbon/energy.

Since the national TEQs price is determined by national demand, it is transparently in everyone’s interest to help each other to reduce their energy demand, and to work together, encouraging a sense of common purpose.

For more information, including FAQs, see: www.teqs.net

3. Rimini Protocol – An Oil Depletion Protocol

The Protocol proposes an oil depletion “adaptation programe”, suggesting the limitation of the national rate of extraction and consumption to the global depletion rate (GDR) and the current national (NDR) respectively, depending on whether a particular country is an oil exporter or importer.