We are all familiar with the concept of climate change, and the need for reduced carbon emissions, but really getting a handle on the scale of the problem can be difficult, thanks to all the confusing terminology. I looked all over the web for a straightforward comprehensive explanation of terms like Global Warming Potential (GWP) and the different meanings of CO2equivalent but I couldn't find it, so eventually I decided to spend some of my time (and the time of many helpful friends and colleagues) on creating one. I didn't count on quite how intricate the underlying science is (it became ever clearer to me why there is so much confusion in this area), so the process took some considerable time, but I believe that this post is now something that many will find useful. It has been checked for accuracy by qualified experts. In order to fully understand the relationship between greenhouse gas emissions and global temperature increase then, we first need to consider the concept of radiative forcing. The Earth is continually receiving energy from the Sun, and continually losing energy into space (as space is much cooler than the Earth). Radiative forcing is simply the difference (measured in watts per square metre) between the amount of energy received and the amount of energy re-radiated back into space. In other words it is the rate at which the planet’s surface is either warming or cooling.  If the planet were losing energy at the same rate it was gaining it then the radiative forcing would be zero and the temperature would remain stable at its current level – this state is called thermal equilibrium. Since a hotter planet loses more energy into space, the natural system tends to move towards thermal equilibrium. However, rising greenhouse gas concentrations (measured in parts per million – ppm ) in the atmosphere act like an insulating blanket, reducing the rate at which energy can escape into space, and so affecting radiative forcing, which in turn affects the temperature. The rough illustrative graphs below give an idea of these relationships and show the time delay between changes in emissions rates (up or down) and temperature changes.  The graph below shows that if we can bring anthropogenic (human-caused) emissions back down we can stabilise greenhouse gas concentrations and bring radiative forcing back towards equilibrium, but at a higher temperature.  So, emissions contribute to greenhouse gas concentrations which in turn contribute to radiative forcing, but it is radiative forcing that determines the rate of change in temperature. Armed with this understanding, the terms below become clearer: Global warming potential (GWP) is an estimate of how much a given greenhouse gas contributes to Earth’s radiative forcing. Carbon dioxide (CO2) has a GWP of 1, by definition, so a gas with a GWP of 50 would increase radiative forcing by 50 times as much as the same amount (mass) of CO2. A GWP value is defined over a specific time interval, so the length of this time interval must be stated to make the value meaningful (most researchers and regulators use 100 years). For example, methane has a GWP of 72 over 20 years, but a lower GWP of 25 over 100 years. This is because it is very potent in the short-term but then breaks down to CO2 and water in the atmosphere, meaning that the longer the period you consider it over, the more similar its effect is to that of CO2 alone.  Equivalent carbon dioxide (CO2e) is an estimate of the concentration of CO2 (in ppm) that would cause a given level of radiative forcing.  For example, the IPCC’s latest report in 2007 considered the effects of the main greenhouse gases currently present in our atmosphere and calculated a CO2e for these of around 455ppm (and rising). This means that (over a defined period) the radiative forcing effect of these gases at current concentrations is roughly equal to the effect a 455ppm concentration of CO2 alone would cause. This particular CO2e calculation takes into account the six major greenhouse gases considered under the Kyoto Protocol, and so may be labelled CO2e(Kyoto).  However, the orange line in the graphs above represents the total radiative forcing of the planet. This is the important figure – the one that determines the rate of change in Earth’s temperature – and as well as the Kyoto gases it is also affected by other factors such as the effects of sulphate aerosols, ozone and cloud formations. The chart below quantifies the effect of each of these factors, and we can see that a number of them (those coloured blue) are actually negative forcings, which act to reduce the total radiative forcing. Because of these, the equivalent CO2 for all forcings combined - CO2e(Total) - is, thankfully, lower than CO2e(Kyoto). The IPCC’s latest figures give CO2e(Total) as roughly 375ppm.  When we hear scientific debates between stabilisation scenarios of, say, 350ppm, 450ppm or 550ppm it is CO2e(Total) which is under discussion. So this 375ppm is the key number, but it has a far wider margin of error than the others. This is because it is relatively easy to measure the atmospheric concentrations of greenhouse gases, and the GWP of those gases, but considerably more difficult to account for all the effects that contribute to the ultimate CO2e(Total) radiative forcing over a given period. The column in the below chart labelled LOSU stands for the “Level Of Scientific Understanding” of the various forcings, and as we can see it is not universally high.  Radiative forcing is the fundamental issue, but it is easy to see why most discussions revolve only around emissions – not only are CO2 emissions much the largest way in which humanity is changing the planet’s radiative forcing, but they are also easier to understand conceptually and easier to quantify than radiative forcing. According to the IPCC atmospheric CO2 concentrations were 379ppm in 2005, which coincidentally happens to be close to our best estimate of 375ppm CO2e(Total). Unfortunately this coincidence also creates a good deal of confusion, as it is not always clear which measure an author is referring to – scientists often assume that this is obvious to their audience, and many others do not themselves fully understand the distinctions between CO2, CO2e(Kyoto) and CO2e(Total).  The other source of confusion is that all of the numbers we have discussed are based on evolving science, and many can only be given approximately. For example, these are the IPCC’s given figures for the GWP of methane over 100 years, taken from their last three reports: 1995 - 2nd Assessment Report (SAR): Methane 100 year GWP = 21 2001 - 3rd Assessment Report (TAR): Methane 100 year GWP = 23 2007 - 4th Assessment Report (AR4): Methane 100 year GWP = 25 These changes are entirely appropriate – the values should become more accurate over time as new measurement methods or changes in scientific understanding develop – but it makes it important to check where any figures are sourced from.  Where we are today So let’s take stock. Below are the latest IPCC figures, which define the situation as it was in 2005: CO2 = 379ppm (error range: minimal) CO2e(Kyoto) = 455ppm (error range: 433-477ppm) CO2e(Total) = 375ppm (error range: 311-435 ppm)  Emissions are still increasing year-on-year (faster than projected in any of the IPCC's scenarios) and atmospheric CO2 concentrations are currently rising by between 1.5 and 3 ppm each year. They are at roughly 385ppm in mid-2008 (for the very latest updated CO2 figure click here). It is worth noting that the pre-industrial concentration of CO2 in our atmosphere was 278ppm and did not vary by more than 7ppm between the years 1000 and 1800 C.E.  Global average (mean) temperature has already risen by around 0.8°C since pre-industrial times, and a minimum additional 0.6°C of warming is still due from emissions to date - the delay in warming being a consequence of the time-lags in the system discussed above.  Ok, that's it! If you followed everything here you should be well-equipped to consider the scientific discussion of climate change. Indeed, you may find you understand it better than some of those who write and speak about it! Hopefully this post will provide a resource to aid wider understanding of the changes we are causing to our global climate system and the climate emergency we are facing. Should any inaccuracies come to light I will of course amend them. This work forms part of my forthcoming book The Transition Timeline, produced in partnership with the Transition Network , and set for publication in March 2009 and available now, published by Green Books. It uses the understanding outlined here to examine the wider context of climate change and peak oil, discuss the options facing our communities and consider the cultural stories which underlie our choices. Footnotes 1. There is also a warming effect from the geothermal energy at the Earth’s core, but this is sufficiently small and stable that for our purposes we can ignore it. 2. Parts per million is the ratio of the number of greenhouse gas molecules to the total number of molecules of dry air. For example, 300ppm means 300 molecules of a greenhouse gas per million molecules of dry air. Strictly speaking concentrations are measured in parts per million by volume (ppmv), but this is widely abbreviated to ppm. Don’t be confused if some papers refer to ppmv. 3. Emissions are not the sole determinant of atmospheric greenhouse gas concentrations due to the Earth’s natural ‘carbon sinks’ which soak up some of our emissions. Concentrations are not the sole determinants of radiative forcing due to other forcings which will be discussed shortly. The time delay between radiative forcing and temperature increase is caused by the thermal inertia of the planet – it has great mass (with much of the heat initially being used to warm the deep oceans) and therefore takes some time to warm or cool. Of the (equilibrium) temperature increase ultimately produced by a given increase in radiative forcing, only about half manifests within 25 years, the next quarter takes 150 years to manifest, and the last quarter many centuries. 4. These illustrative graphs do not include the effects of climate feedbacks such as carbon sink degradation. Also see the MIT Climate Online 'Greenhouse Gas Emissions Simulator' 5. Figures from: IPCC AR4 Working Group I Report, Chapter 2 , Table 2.14, p. 212.
More detail on GWP available at: http://en.wikipedia.org/wiki/Global_warming_potential - note that the GWP for a mixture of gases cannot be determined from the GWP of the constituent gases by any form of simple linear addition. 6. There is also a separate but related concept called Carbon Dioxide equivalent. This gives the amount of CO2 that would have the same GWP as a given amount of a given gas (or mixture of gases). It is simply calculated by multiplying the GWP of the gas by the given amount (mass) of gas. For example, over a 100 year period methane has a GWP of 25, so 1 gram of methane has a Carbon Dioxide equivalent value of 25 grams.
In practice, since Carbon Dioxide equivalent is expressed as a mass (grams, tonnes etc.), and Equivalent Carbon Dioxide (CO2e) is expressed as a concentration (usually in parts per million), they are not easily confused, despite the similar names.
You may also encounter references to the "carbon equivalent", especially when discussing carbon that is not in gaseous form (e.g. carbon in coal deposits). A carbon equivalent figure can be converted to carbon dioxide equivalent by multiplying by 3.644 to account for the different molecular weights (3.644 tonnes of CO2 contains 1 tonne of carbon). 7. The IPCC is the Intergovernmental Panel on Climate Change - the body established jointly by the United Nations and the World Meteorological Organisation in 1988 to assess the available scientific evidence. 8. The IPCC considered the so-called ‘Kyoto basket’ of greenhouse gases (GHGs). Under the Kyoto Protocol, signatories committed to control emissions of a ‘basket’ of six GHGs - carbon dioxide, methane, nitrous oxide, HFCs, PFCs and SF6.
455ppm figure from e.g.: IPCC AR4 Working Group III Report, Chapter 1 , p.102
The IPCC estimate of CO2e(Kyoto) is detailed by Gavin Schmidt of NASA in a post at Real Climate 9. These negative forcings include the so-called ‘global dimming’ effect. For more on this crucial consideration see: “On avoiding dangerous anthropogenic interference with the climate system: Formidable challenges ahead”, V. Ramanathan and Y. Feng, Proceedings of the National Academy of Sciences, vol. 105, 23 September 2008, pp. 14245-14250
IPCC CO2e(Total) figure: IPCC AR4 Synthesis Report, notes to Table 5.1, p.67 10. Table source: IPCC AR4 Working Group I Report, Summary for Policymakers, Figure SPM.2, p.4 11. IPCC 2005 CO2 levels: IPCC AR4 Synthesis Report, Summary for Policymakers, p. 5 12. IPCC 2001 figures: IPCC TAR Working Group I Report, Chapter 6, Table 6.7
1995/2007: IPCC AR4 Working Group I Report, Chapter 2 , Table 2.14, p. 212 13. Error ranges: IPCC AR4 Working Group III Report, Chapter 1 , p.102 14. Up-to-date measurements of atmospheric CO2 concentrations are always subject to revisions, pending recalibrations of reference gases and other quality control checks. Trends and 2008 figure taken from: NOAA Earth System Research Laboratory - Global Monitoring Division (site accessed August 2008)
Pre-industrial CO2 levels from: NOAA (US National Oceanic and Atmospheric Administration) 15. See footnote  above for details on climate time-lags. Figure for warming from emissions to date taken from the Climate Code Red report by Carbon Equity, p.22.
Also see IPCC AR4 Working Group III Report, Summary for Policymakers, Table SPM.5, p.15 for ultimate (equilibrium) warming from current atmospheric concentrations.
Finally, note that a 2008 paper in the Proceedings of the National Academy of Sciences examined the impacts of air pollution (which blocks sunlight and thus reduces temperatures – the effect known as ‘global dimming’) and found that this is masking the full extent of the warming effect from greenhouse gas concentrations. Building on the IPCC’s work, the paper finds that if air pollution reduces – as it is expected to do – then 2005 atmospheric concentrations could commit us to around 2.4 degrees of warming above pre-industrial temperatures, with about 90% of this warming taking place this century. Images 1. Climate-o-meter used (in edited form) with permission from http://www.ageofstupid.net/ 2. Radiative forcing illustration used with permission from David Wasdell 3. Indicative climate graph created by author in partnership with David Wasdell, and with assistance gratefully acknowledged from Ben Brangwyn. 4. Indicative climate graph created by author in partnership with David Wasdell, and with assistance gratefully acknowledged from Ben Brangwyn. 5. Radiative forcings table from: IPCC AR4 Working Group I Report, Summary for Policymakers, Figure SPM.2, p.4 6. Indicative climate graph created by author in partnership with David Wasdell, and with assistance gratefully acknowledged from Ben Brangwyn. As George Carlin once said, "they call it the American dream because you have to be asleep to believe in it". At the risk of this blog becoming 'review corner', that seems the perfect introduction to the book I just finished reading - Dmitry Orlov's brilliantly enjoyable Reinventing Collapse. This is a true work of dark optimism, with a fair dash of dark humour to boot. In it, Orlov draws on his experiences of the collapse of the Soviet Union to explore the future American residents like him are likely to face as the effects of the USA's disastrous economic, energy and foreign policies take hold. Orlov highlights that economic collapse is not, in fact, the unthinkable end of the world, but rather simply a new set of historical circumstances within which to exist. This is a critically important and inherently dark subject, yet the book is suffused with subtle humour, to the extent that at times you are not quite sure when Orlov is serious and when he's joking. The answer, invariably, is both. This deep humour is an apt way to stimulate further thought in the reader, and after the initial laughter I regularly found myself drawn into a contemplation that led me to Orlov's insights laying beneath. One subtext particularly intrigued me. While Orlov argues that the collapse of the US economy is inevitable (I would agree), and will surely be extremely difficult for most of those living through it, various asides implied to me that it could be considered in some respects desirable. This interests me in the context of the desperate urgency of the global climate change situation. As Dr. James Hansen chillingly put it in his recent paper, it is simply becoming a question of whether "humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted". On his reading of the science (and I trust him) we now have less than seven years to decide. Bearing these stakes in mind, it is interesting to note that Chris Vernon of The Oil Drum quotes the statistic that Russia's carbon emissions fell 31% in the 5 years from the end of the Soviet Union in 1991. Ignoring for a moment all the other effects of that economic collapse, and considering that the weight of evidence tends to suggest that a 'great turning' of the global paradigm may not be likely to take place in time, I am led to ponder whether economic collapse is actually what we should be hoping for - does it represent our best bet for reducing emissions sufficiently quickly to retain a habitable climate on our planet? I have written before about my belief that while climate change and peak oil represent the greatest direct threat facing humanity today, they are really only symptoms of a deeper problem. Humanity’s obsession with growth means that if we could wish away the excess CO2 in our atmosphere and generate unlimited oil we would still quickly find our unsustainable way of life pressing up against the next environmental limit, be it food shortages, air pollution, species extinctions or whatever. And in turn this growth obsession is a symptom of the underlying cultural stories and philosophies we use to make sense of our lives and find meaning. Our cultural stories define us and strongly impact our behaviours. An example of a dominant story in our present culture is that of “progress” - the story that we currently live in one of the most advanced civilisations the world has ever known, and that we are advancing further and faster all the time. The definition of 'advancement' is vague – though tied in with concepts like scientific and technological progress – but the story is powerfully held. And if we hold to this cultural story then 'business as usual' is an attractive prospect – a continuation of this astonishing advancement. Similarly the cultural story that “fundamental change is impossible” makes it seem inevitable. Yet even UK Prime Minister Gordon Brown admitted last week that, “The fact is that a low carbon society will not emerge from thinking of business as usual” The problem with stories comes when they shape our thinking in ways that do not reflect reality. The evidence might support the view that this 'advanced' culture is not making us happy and is rapidly destroying our environment's ability to support us, it might show that dramatic change is both common and inevitable, but dominant cultural stories are powerful magics, and those who challenge them tend to meet resistance and even ridicule. Nonetheless, my work now focuses on changing these dominant cultural stories - and thus changing our patterns of thought and behaviour - as I see this as the key to equipping our society to deal with the pressing challenges of climate change and peak oil. TEQs, the Transition movement and the various other initiatives listed on my links page (as well as this blog of course!) seem to me to provide the best possibilities for starting to shift our cultural paradigm. But perhaps this effort is too little too late? And perhaps by trying to move our society a little closer to long-term sustainability we are in fact just prolonging its existence, and thus prolonging its ability to pump emissions into our atmosphere... Does our need for a relatively benign climate logically dictate that we should be striving to bring about economic collapse sooner rather than later? It is an interesting question, and one that we may need to revisit, but my answer is still no. The human suffering caused by such a sudden collapse is overwhelming, and I believe that kinder options are still open to us. Personally, I believe we still have a chance. I still believe, firstly, that a long-term future for humanity is possible, and secondly that we have a shot at developing a society that responds in a humane way to the crises we face. And I will fight for that possibility for as long as I believe in it and still see a chance that it exists, even as the window of possibility continues to shrink. When it comes down to it, at the deepest level it doesn’t really matter to me whether or not it is probable that we succeed. As Tom Atlee has written, “Probabilities are abstractions. Possibilities are the stuff of life, visions to act upon, doors to walk through.” I will walk through the doors that inspire me. Of course, there is a side of me that asks "but what if we do reach a time when the evidence is clear - when there is no longer any chance of avoiding the devastation of our climate". If we were on the Titanic and we had already hit the iceberg there would be little point in trying to patch the hole as the waters raged in - so what then? Well, the trite answer would be that there's quite enough to worry about now without concerning myself with that. The more interesting answer comes back to what we believe life is fundamentally about, but that will have to wait for a future post. Oh, and just what does Dmitry Orlov suggest in terms of personally adapting to an economic collapse? Well, you'll have to read his book for that! In the climate policy community there is a growing debate between advocates of 'upstream' and 'downstream' carbon caps (dams?). The terms draw an analogy between the flow of water in a stream and the flow of energy through an economy. 'Upstream' advocates want to regulate the few dozen fuel and energy companies that bring carbon into the economy, arguing that this is cheaper and simpler than addressing the behaviour of tens of millions of 'downstream' consumers. At first glance this seems a convincing argument, but there is one important regard in which an upstream scheme fails - it does not engage the general populace in the changes required. While this might seem a benefit in terms of simplicity it means that the fundamental changes required in society are simply not going to happen. Energy suppliers alone are not going to be able to resolve climate change. We need every citizen to see the need to change the way we live, work and play. There are a great number of suggested schemes, but two are perhaps the best thought-through and can help us to explore this debate. Representing the downstream camp is Tradable Energy Quotas - TEQs (AKA Domestic Tradable Quotas - DTQs). This is an energy rationing scheme designed to cover the whole economies of individual nations, requiring energy users to secure allowances in order to purchase fuels and electricity. These allowances are given free-of-charge to individuals but all other organisations in the economy have to buy them. The number of allowances issued is limited in line with the national carbon cap. It would operate underneath an international framework such as Contraction and Convergence which would set the various national caps, ensuring that global emissions fall. In the upstream corner is Cap and Dividend (AKA Sky Trust). This is a system which sets a global cap on carbon emissions, and then auctions a number of allowances determined by the global cap to fossil fuel producers, who must have them in order to be allowed to extract fossil fuels. The revenue generated by the auction is then distributed to every person in the world on an equal basis - this is the 'dividend'. Both schemes aim to provide a means to implement the global cap on emissions necessitated by the severity of our climate emergency, and both schemes allow for trading of allowances/permits once they have been issued. Cap and Dividend would clearly be simpler and cheaper to introduce, however, as it only involves interactions with a small number of companies worldwide, followed by a relatively straightforward financial payment to the people of the world. On the other hand TEQs would provide greater public engagement and opportunities for behaviour change. This inverse relationship between financial savings and public engagement is as we might expect. But clearly effectiveness in addressing the combined challenge of climate change and energy resource depletion is the most important criterion for evaluating such schemes. If we can achieve that more cheaply and easily then all well and good, but as Dr. Richard Gammon put it to Congress in 1999, “If you think mitigated climate change is expensive, try unmitigated climate change”. Effectiveness is far and away the critical concern for many reasons, but ultimately an ineffective scheme will cost us a lot more than an effective one anyway. Cap and Dividend advocates argue that implementing a cap guarantees effectiveness, thus leaving cost the defining factor in the decision. But this ignores the true nature of the problem we face, which is not just an abstract exercise in administering carbon caps. In reality the speed of energy descent required by our societies in order to avoid catastrophic climate change is extremely demanding, especially in the context of energy resource depletion. Achieving the necessary changes in our energy infrastructure and in our lifestyles in the timescale available presents possibly the greatest challenge humanity has yet faced. This is why a number of Government and industry papers have suggested that there should be a 'soft cap', with a 'safety valve' in case living within the cap proves too challenging. However, undermining the cap in this way is clearly inappropriate to a situation where we are facing the possibility of permanently destabilising our atmosphere and life-support systems. We need a scheme that helps societies adapt to the constraints of the cap, without causing such strain that there are deafening cries for safety valves or softened caps. We must engage the populace in the necessary transition at the local and individual level, as well as working with the big industrial emitters. As last week’s Environmental Audit Committee report stated, upstream schemes, “rely on price signals transmitted down through the economy to deter customers from buying carbon intensive goods or services—with the same downstream effect as a carbon tax. We remain to be convinced that price signals alone, especially when offset by the [additional income from the dividend], would encourage significant behavioural change comparable with that resulting from a carbon allowance. Larry Lohmann, author of the outstanding Carbon Trading: A Critical Conversation on Climate Change, Privatisation and Power, which highlights many of the fundamental shortcomings of existing upstream trading schemes such as the EU ETS, recently commented that, “The problem is that it’s not clear how price can incentivise structural change of the kind required for the climate problem. Historically, price has not been effective in stimulating the kinds of social transformation needed – although it has been effective in stimulating other kinds of change (usually far more marginal). Social and technological change of the kind at issue has come about in other ways.” Now I should stress at this point that Larry Lohmann would not necessarily support TEQs either, and a thorough examination of how TEQs relates to the criticisms of carbon trading in his report is something I am currently engaged in, prior to discussing the matter with him directly. But having outlined the shortcomings of Cap and Dividend in trying to address energy resource depletion and climate change purely via the price signal, I should outline how TEQs differs in this regard. Energy, not money The first key point is that TEQs is denominated in terms of energy, not money. This is because it was designed from the outset to address both energy depletion and climate change. It would guarantee an assured entitlement of fuel and energy to every individual in the country, in a way that C&D does not. Cap and Dividend is designed solely with regard to climate change, and so an additional energy rationing system – like TEQs – would be needed to deal with any oil or gas supply disruptions, which would rather negate the cost savings of such a scheme. Yet even if we were to ignore the realities of energy resource depletion, the shrinking carbon cap is itself going to mean a shrinking supply of energy to the economy. So again we require some form of rationing system lest we are back to 'rationing by price', whereby the poor are simply expected to do without. Small-scale solutions within a large-scale framework The second point is that TEQs - devised by my colleague Dr. David Fleming - is explicitly a national scheme, not a global one. In my humble opinion, the most brilliant thing ever to pass David's lips is that, “Large scale problems do not require large-scale solutions – they require small-scale solutions within a large-scale framework.” I find this deeply inspiring, reminding us that schemes like Contraction and Convergence, Cap and Dividend and Tradable Energy Quotas exist only as frameworks to stimulate local action. We are tempted to think of them as solutions in themselves, but we must remember that it is at the local and individual levels where all the real changes take place – that is after all where everyone in the world lives. The correct role of these large-scale frameworks is to support and encourage local responsibility, while providing the assurance that enough action is taking place to address the scale of our global problems. And this is why TEQs is defined strictly as a national scheme – because collective motivation is necessary on a scale in which individual effort is seen as being significant. It does not work on a scale so large that individuals lose the sense of belonging, or the belief that their individual contributions make a difference. Common Purpose The third key point is that ‘upstream’ regulation like Cap and Dividend only involves the fossil fuel companies. While this might seem a benefit in terms of simplicity it means that the fundamental changes required in society are not going to happen – while it is perhaps fashionable to hold them responsible for every aspect of our energy and climate problems, in reality our individual and community lifestyles need transformation too. And perhaps even more crucially, to achieve the dramatic change in infrastructures necessitated by climate change we need cooperation between the different sectors of society, united in a single simple scheme. It is a critical feature of TEQs that it is designed to stimulate and enable constructive interaction both between households and between households and all other users – companies, local authorities, transport providers and national government. In short, the scheme is explicitly designed to stimulate common purpose in a nation. The fixed quantity of energy available under TEQs makes it obvious that high consumption by one person leaves less for everyone else. Lower demand means lower prices, so it becomes in the collective interest that the price of TEQs allowances should be low. There is an incentive to collaborate to make it happen, and TEQs thus generates a social and economic culture that is intelligently, effectively and collectively working towards the shared goal of living happily within our energy and emissions constraints. Cap and Dividend, unfortunately, might have the opposite effect. While it incentivises individuals to reduce their personal energy use, it also appears to incentivise them to encourage increased energy use in the world as a whole, as by doing so they push up the demand for emissions permits, and so increase the dividend they receive. Such a perverse incentive is entirely at odds with the required common purpose. To sum up then, the key argument in favour of upstream schemes is that they would be cheaper and simpler than downstream alternatives (which they would be), but there are good reasons to suspect that they would represent a cheap and ineffective response to both climate change and energy depletion, which would be the greatest of all fool’s economies.