Towards BitCO2, an individual consumption-based carbon emission reduction mechanism

Human activities, such as burning fossil fuels for electricity generation, heating, and transport, are the primary drivers of a large amount of greenhouse gases emission. The individual consumers, able to influence the supply chains behind the commodities their chose to fulfil their needs is the driver behind production and, consequently, its impacts. Thus, the active and willing participation of citizens in combatting climate change may be pivotal to address this issue. The present work is aimed at presenting and modelling a novel market-based carbon emission reduction mechanism, called BitCO2, designed to incentivize individual consumption choices toward lower carbon footprints. This mechanism is tested for the Italian private transportation sector thanks to an ad hoc developed System Dynamics model. The Battery Electric Vehicle (BEV) adoption, if compared with the Internal Combustion Engine Vehicle (ICEV) one, cause less CO2 emissions per km travelled. After a certain number of travelled km, a BitCO2 token is assigned to BEV owners for each ton of avoided CO2. This token can be exchanged in a dedicated market and used to get a discount on insurance services. Assuming a Social Cost of Carbon of 9.22 [2.13-22.3] euro/tonCO2eq, model results show that the BitCO2 mechanism would allow for a cumulated CO2 emission reduction of 973 [68.9-5'230] ktonCO2eq over 20 years of operation with a peak of 39.3 [5.34-189] thousand additional BEV registration per year.