Meeting climate change targets requires inclusive carbon policies to encourage mass public participation. As a bottom-up strategy allows participation from all walks of society, personal carbon market may promote low-carbon behavior and further encourage technological innovation. We analyze the advantages of Personal Carbon Trading (PCT), examples of its application in other countries, and its limitations. To promote a low carbon emissions lifestyle, China has proposed and rapidly developed Inclusive carbon credits (ICC), which is a voluntary PCT scheme. We compare the government-led and enterprise-led ICC platforms with relevant examples in China and highlighted the need for academic-industry-government partnerships. Furthermore, we identify the barriers, opportunities, and the path forward with integrating ICC into the carbon market regarding technology and public participation. We hope that the understanding of ICC and China’s recent exploration of the personal carbon market could serve as an example to revolutionize the low-carbon lifestyle worldwide.
Citation: Xu W, Zhou K, Hu S, Yang Y, Liang P, Pan R, et al. (2023) Low-carbon lifestyle revolution: China’s recent progress toward a personal carbon market. PLOS Sustain Transform 2(10): e0000079. https://doi.org/10.1371/journal.pstr.0000079
Editor: Lian Pin Koh, National University of Singapore, SINGAPORE
Published: October 4, 2023
Copyright: © 2023 Xu et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Funding: This study was funded by National High-level Talent Program of China (41180953 to TML). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.
Competing interests: The authors have declared that no competing interests exist.
Post COP-26, there is now a global consensus and growing political commitment to address humanity’s climate crisis. In recent years, ambitious and aggressive climate change goals such as carbon neutrality and ‘negative’ carbon emissions have been proposed to combat climate change issues. Nevertheless, more promising ways of bringing about large-scale societal changes and transformations to reduce carbon emissions are urgently needed. In this context, the carbon market schemes, which adopt flexible and cost-effective aspects of the market economy, can play an important role in tackling climate change . For now, the carbon trading mechanisms for companies and key industries are the predominant approach for low carbon transformation in many countries. However, the access to carbon trading market is almost restricted to selected decision-makers and, unfortunately, excludes ordinary households, colleges, individual businesses, etc. The lack of direct societal engagement may lead to energy efficiency gains being offset by increased individual energy consumption due to the rebound effect . In the meantime, with the significant contribution of household energy consumption to national carbon emissions , emerging strategies of bottom-up, organic, and grassroots carbon markets aimed at reducing personal carbon consumption are beginning to receive renewed attention from academics and some governments .
Personal carbon trading for public engagement
The strategy of Personal Carbon Trading (PCT) offers potentially powerful tools to achieve the desired reductions in personal and household carbon emissions . It reduces the individual’s overall carbon emissions by engaging them in the process of managing their emission allowances . Compared with Carbon Tax, PCT increases carbon visibility to strengthen the public’s perception of carbon emissions (Box 1). The PCT market could not only promote environmentally responsible behavior but also create a social norm and mainstream a low-carbon lifestyle. Drawing on widespread participation from all walks of society, the PCT market could encourage green businesses and technology innovations . Furthermore, since the over-emitter subsidizes the under-emitter, the personal carbon market could potentially promote equity and social inclusiveness, where people can maximize their utility levels by weighing consumption against carbon emission. In addition, we believe that perhaps as more people participate and engage, future climate policy and actions may become more politically palatable. In the last decade, some countries and international organizations have made tentative explorations into the feasibility of individual carbon markets, such as the Electronic Tradable Energy Quotas and Personal Carbon Allowances in the United Kingdom . Some have been voluntarily piloted, like the CitiCAP app in Finland and the Carbon and Health Evaluation Program in Norfolk Island, focusing on areas such as household energy use and mobility . While the PCT scheme should cover multiple behaviors, the complexity of implementing their pilots may limit its public acceptability , making it particularly challenging to collect individual behavioral data, which could hinder further exploration of the mechanisms of personal carbon trading.
Box 1. The Personal Carbon Trading (PCT), Inclusive Carbon Credits (ICC), and Carbon Tax (CT) are major policy ideas to encourage the public to reduce carbon emissions and participate in a low-carbon lifestyle. In the PCT scheme, individuals are allocated the initial carbon allowance which is tradable. People would have to surrender a certain amount of carbon units from their personal carbon account or pay an additional fee to purchase carbon units at the market price when they buy goods or services. The ICC is a voluntary and generalized personal carbon trading scheme. Individuals obtain carbon credits which can be exchanged for some incentives through engaging in low-carbon lifestyles and behaviors. And the CT sets a unit price for measurable greenhouse gas emissions and taxes individuals based on the amount of carbon they produce in their lives.
In order to distinguish the differences between these three major personal carbon reduction strategies, we summarized and compared their characteristics. In the table below, "only selling" means that you can only exchange carbon credits for rewards and cannot purchase carbon credits. And "buying and selling" means that you can not only buy more carbon credits but also sell additional carbon credits.
Summary and comparison of major personal carbon reduction strategies.
China’s growing initiative
China has recently been at the forefront in exploring more flexible ways based on the PCT scheme to encourage more individuals to practice low-carbon lifestyles, which are particularly crucial for China to reach peak carbon emissions by 2030 and achieve carbon neutrality by 2060 –two landmark national climate goals. As a developing country with one of the world’s largest populations, economies, and highest volume of carbon emissions , her experience may provide a low-carbon lifestyle model for the rest of the world. New programs have emerged to aid the establishment of a sustainable behavior incentive feedback mechanism, which encourages the public to voluntarily establish personal carbon accounts and obtain carbon credits by actively engaging in low-carbon lifestyles and behaviors. The carbon credits could then be exchanged for grocery products, coupons, or other incentives, which are usually sponsored by enterprises or governments. Such schemes may be transitional strategies for gradually linking carbon credits to the carbon trading market, where it could supposedly become an avenue for enterprises to offset their excess carbon emissions. Voluntary personal carbon emission reduction programs do not have quota restrictions so they may become more acceptable to the public , which could in turn become conducive to the acquisition of more behavior data to improve carbon accounting methods and trading mechanisms.
Emerging key government-enterprise partnerships
For now, there are two key leaders of such programs in China: governments and enterprises. In 2015, Inclusive Carbon Credits (ICC)——a voluntary personal carbon trading scheme, was first proposed by the Guangdong Province government—the most populous province in China, with one of the largest sub-national economies in the world. This scheme has been rolled out in over a third of China’s provinces and autonomous regions, in cities such as Beijing, Chengdu, and Xining (Box 2). It covers carbon emission behavior scenarios from energy use, traveling, resource processing, and food consumption, and establishes a motivational mechanism to involve individuals, community households, and small enterprises to adopt low-carbon activities .
Box 2. In 2015, the Guangdong Province government launched the first ICC scheme in China. After China declared two landmark national climate goals—reaching peak carbon emissions by 2030 and carbon neutrality goal by 2060—in 2020, various provincial governments and enterprises responded to the call and many new ICC projects emerged. We listed some major projects of the personal carbon market in China and show their organizers, the range of low-carbon lifestyles, and the launch date.
Some key examples of China’s personal carbon market.
In addition, there is a growing interest from Chinese enterprises to explore possible personal carbon accounts, especially dot-com companies, and banks, like Ant Forest, CITIC Carbon Account, etc (Fig 1). They use their user base and own business advantages to promote a green lifestyle for the public . Nevertheless, both government-led and enterprise-led platforms continued to face numerous challenges (Fig 1). To this end, some local governments and enterprises have begun to seek cross-administrative and multi-enterprises partnerships on personal carbon markets. Two examples are the Beijing MaaS platform launched by the Beijing Municipal Government in collaboration with Amap and Baidu Map (promote climate-friendly mobility while also using navigation applications)  and the Blue Planet launched by the Shenzhen Municipal Government and Tencent (accurately account for travel carbon footprints from public transportation)  (Box 2). Since China’s carbon neutrality commitment in 2020 and the implementation of relevant government policies, the growing responsibility of Chinese enterprises to establish a low-carbon economy, and the surge in public climate change awareness, China has been accelerating the development of the carbon market, where ICC schemes have emerged rapidly across the country.
We drew a flow chart and summarized the advantages and disadvantages of government-led and enterprise-led programs. In this flow chart, we took Guangdong province’s ICC as a government-led example and Ant Group’s Ant Forest as an enterprise-led example. By August 2022, more than 80,000 people have signed up for Guangdong province’s ICC for this voluntary carbon reduction initiative, recording a cumulative carbon emission reduction of more than 17,000 tons . And Ant Forest program has now established itself as one of the largest personal carbon accounts in the world , where it actively engages millions of people in voluntarily shifting to a low-carbon lifestyle through a planting simulation game. Through gamification, at least six hundred million users have virtually participated in ecological protection, where over three hundred million trees have been planted .
Barriers, opportunities, and the path forward
By and large, these programs are enabled by the advances and widespread availability of mobile internet and big data technology, as well as climate financing (including for academic research), policies and directives, and new data privacy laws, aiming at promoting a green lifestyle as an active and conscious choice of the society. In addition, such programs have encouraged new green businesses, technology development, and product innovation, where, for example, the increasing uptake of electric vehicles (EV) could conceivably lead to the rapid development of the EV energy storage industry . Admittedly, there remain many barriers (and herein also lies the opportunities) to overcome before integrating the personal carbon accounts into the Pu Hui Certified Emission Reduction (PHCER) scheme. At the technical level, there are still the challenges of connecting and closing carbon emission ends between the consumer side and the production side, and standardizing the carbon accounting methods across scenarios and among different platforms  while safeguarding the privacy of individuals and the commercial interests of enterprises. It will require an extensive academic-industry-government partnership to establish a unified personal carbon account and standardized carbon accounting methods and to understand the behavioral mechanisms and explore the potential carbon trading mechanisms among the public, enterprises, and governments . Most recently, the Inclusive Carbon Credits Network was founded to explore possible cooperation mechanisms to promote a nationwide personal carbon market, and progressive carbon labeling efforts have been initiated across multiple industries in China.
Furthermore, public awareness and participation are also crucial to promoting the establishment of a personal carbon market. In addition to the necessity of strengthening climate education in China, community and collective engagement could leverage the Chinese collectivist culture. For example, the Vanke Foundation (the foundation of the large real estate developer Vanke Company) has initiated projects to create zero-carbon emission residential communities. Linking and extending personal carbon accounts to community and institutional ones (e.g., residential, educational) may further encourage the public to practice collective low-carbon behavior. Meanwhile, ICC should also be incorporated into China’s environmental protection legal system, to provide legal protection and normative guidance for local authorities to carry out the practices of ICC, and to establish a unified trading platform for carbon inclusion through legal authorization . Moving forward, more progress is urgently required to advance an inclusive, sustainable, and collaborative carbon market that would lay the groundwork for individuals, communities, and institutions to deliberate, engage, innovate, and catalyze impactful climate actions in China.
Since China has a unique cultural, political, and economic context, it is difficult for other countries to fully replicate China’s model in personal carbon markets. However, during the process of exploration, a rich variety of models have been generated that could be options for countries depending on their situations. These models include diverse forms of participation (e.g., gaming, carbon accounting), and multiple incentive schemes (e.g., credits for gifts, contribution to public welfare projects, Certified Emission Reduction), which are led by various key partnerships (e.g., government, inter-enterprise cooperation, government-enterprise cooperation). In addition, following China, countries could also initiate trials of carbon trading between individuals and companies. As such, countries should explore ways to establish personal carbon markets based on their national conditions and needs as a possible approach to combat the global climate crisis.
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