The Welcome Return of Rationing 

Shaun Chamberlin


Rationing has a bad name. Perhaps understandably so, associated as it is with hardship, shortage and war; but in truth this is no fairer than it would be to shun nurses due to their
association with disease.


Rationing is a response to shortage, not the cause of it, and the simple reality is that in times of
shortage, some method will inevitably determine who gets access to the available supplies (and who does not).


The dominant method today is the market's: watch prices rise beyond the reach of most, with the available supplies going to those who can still afford them. An approach we might term 'rationing by price', or by wealth.


And while people are often willing to accept such when it determines who can access precious works of art, or homes with a sea view, fairness becomes a more urgent concern in times when shortage of supply extends to warmth, or food.


Of course, we are moving ever deeper into such times, as the UK government is forced to use taxpayers' money to subsidise rocketing energy bills, the National Grid warns that homes and industry could face power cuts, and foodbank use has increased 100-fold since the 2008 financial crisis; now catering to 1 in 30 of the UK population.[1] 


Accordingly - despite its bad name - politicians are feeling obliged to acknowledge the 'R' word, and doubtless gauging the public's response. In September, Michael Gove advocated energy rationing but was overruled by his then-boss Liz Truss; meanwhile the power companies just pressed ahead with plans to pay people to use less at peak times. Across the Channel, the French President called for a 10% cut in energy use while seeking to prepare people for the big picture, announcing that "We are currently living through a great upheaval … the end of what could have seemed an era of abundance", while the French Prime Minister floated rationing plans with the bald statement that "it’s urgent to stop any energy consumption that isn’t indispensable immediately".[2] 


Sure enough, shortage is upon us. And once we recognise that rationing of one form or another is the simple non-negotiable reality in such times, we can enter into the real conversation as to whether fairer approaches than market-based 'rationing by price' may be available.


Happily, we need not venture alone into such considerations - we have an able guide. As far back as 1996, the late Dr. David Fleming proposed a system of energy rationing of sufficiently
ingenious design to trigger widespread interest and research, eventually building up to a 2008 UK government funded feasibility study. This concluded that there were no practical obstacles to implementation and that the system would strongly benefit the poorest.


Somewhat predictably though (with hindsight, at least - I was at the time a horrified advisor to the process), the Treasury were not ready to permit such a radical challenge to the sovereignty of the markets. The most influential report in the feasibility study both misrepresented the design of the system and rejected it, on the basis that it would be cheaper to simply buy carbon offsets overseas than deal with carbon and energy issues at home at all. Despite the dubious logic, and Fleming's system explicitly being designed to address not only national emissions but also fair access to energy, it was declared "ahead of its time" and mothballed.


A quarter of a century on, however, we may be ready to appreciate the design of a system that could have ameliorated so many of the challenges we face today, and which still stands ready to mitigate them…


Rationing to the rescue? 

Fleming's great insight was that the word "rationing" contains two tightly entwined but very different meanings. The first is guaranteed minimum shares for all; the second is limits to what individuals are allowed to consume. He recognised that while many of us resent the second, in times of shortage we cry out for the first.


And, remarkably, he managed to deliver the seemingly impossible - his ingenious rationing system (TEQs) manages to offer minimum shares for all without setting an absolute limit on what individuals can consume.


How? Well firstly TEQs issues everyone in the nation with a free, equal entitlement of energy ration coupons (electronic ones, aka TEQs units). So far, so predictable. The magic comes by virtue of recognising that rationing systems have always created thriving black markets, criminalising those who don't use their full entitlement and thus seek to sell their spares to those who are willing to pay for the unused surplus. TEQs simply makes this unnecessary, allowing those who use less than their entitlement to sell their surplus TEQs rations back to the Registrar that issues them, from where others can buy them. Hence the name, Tradable Energy Quotas (TEQs).[3] 


Since the supply of quotas issued to the nation is strictly limited by the outright availability of energy (or electricity, or gas, or whatever the limited resource is), the price of these
surplus rations is straightforwardly determined by how many are selling, and how many are buying. Accordingly, the fluctuations in that single, national price become a clear indicator of how well the nation is adapting to the energy constraint. If the price gets high then it strongly rewards those who use less than their entitlement of quotas, and strongly punishes those who use more. It also provides a clear signal to the whole country (including the government) that more needs to be done to reduce energy usage.


So the reason why all those studies confirm the progressive impacts of TEQs becomes clear. Rather than our present arrangement where poorer households can simply be priced out of the energy market, instead everyone would have a guaranteed entitlement to purchase energy. And, crucially, anyone who continued to be energy-profligate (as they would still have the right to do) would effectively find themselves paying the energy-thrifty ever more for the privilege of doing so.


How would it work in practice? 

Pretty straight forwardly. Every adult in the country is given a TEQs account containing an initial entitlement of TEQs units. Each week from then on, an additional week's worth arrives therein.


Whenever we buy energy - such as petrol or electricity - TEQs units corresponding to the amount of energy purchased are automatically deducted from our TEQs account, in addition to our monetary payment.


If we need more TEQs units, we can buy them from the Registrar at the prevailing national price, just like topping up phone credit or a travel smartcard like London's Oyster. If we have surplus to sell, we sell them back to the Registrar at the prevailing national price. In terms of day-to-day engagement, that's it. There's no need for a 'carbon card' or similar, with TEQs transactions smoothly incorporated with existing payment methods (including cash, as we'll see).


In this way, TEQs achieves the dream of all policy - creating minimal hassle while achieving high visibility, since the fluctuating national TEQs price affects everyone's pocket, creating clear common purpose in reducing energy demand.


But what about people who have no phone or bank account? Or tourists, who need to buy energy but receive no entitlement of TEQs units? No problem. If you are making an energy purchase but have no access to TEQs units, the retailer simply adds the cost of buying them on your behalf to your purchase, automatically, regardless of whether the transaction is in cash or by any other means. And anyone whose supply of TEQs units is quietly accumulating unused in the background can cash them in whenever they wish, with arrangements for access - such as visiting the Post Office - working in the same way as those that already exist for social
security payments.


As the government feasibility study confirmed, the practicalities are well thought-through (with many other FAQs addressed on the TEQs website).


Under the bonnet 

Behind the scenes, the system is a little more complex, but not too much.


The essential principle is that TEQs units change hands wherever the rationed energy source in question - natural gas, say, or electricity - does. So when I buy fuel at the petrol station, I must surrender some of my TEQs units to the retailer. And when the petrol station in turn buys its fuel from the wholesaler, it must surrender TEQs units (secured from customers like me) to them. And soon up the energy supply chain until the TEQs units reach the primary energy
provider or importer. They then must surrender these units back to the Registrar in exchange for their licence to operate.


This 'closes the loop', with the units issued into the economy by the Registrar flowing through the entire economy from energy-consumers to energy-providers and eventually back to the Registrar itself.


It is this circular nature of the system that makes it workable, since it is no-one's interest to "let someone off" surrendering their TEQs units. If my brother runs the petrol station and doesn't collect TEQs units from me when selling me fuel, he will simply have to buy those TEQs units himself from the Registrar to make up the shortfall when buying the station's fuel supplies.


TEQs is thus largely self-monitoring. Just as the police are not required to watch every cash transaction in the present economy to ensure that money has changed hands, TEQs transactions go on in just the same bureaucracy-free, surveillance-free way.


Organisations that are not involved in the energy supply chain (and so do not receive TEQs units from their customers) simply purchase the units that they need from the Registrar and then surrender them to their energy suppliers in the usual way, thus ensuring that all energy
users in the economy are covered.


In times of absolute energy shortage TEQs has clear benefits both in terms of fair distribution and conservation, with the number of units issued for free each week to each individual simply reflecting the available national supply.


Crucially though, the system is also designed to re-introduce fairness outside of such times of immediate energy shortage…


Beyond energy shortages - TEQs for climate 

The dark consequence of our desperation for fuel to help us through long winters - see e.g. fracking, arctic oil, lignite mining, tar sands, shale oil… - is, of course, ever-growing carbon emissions and the ongoing destabilisation of our climate.


For all the fine words about the urgent radical emissions cuts we need, this chart neatly sums up the emissions trend. Indeed, one might wonder whether climate conferences are a leading cause of emissions…

broken image


The lockdowns in response to Covid-19 did lead to a drop of around 5% in global annual emissions in 2020, but sure enough this rebounded the following year and they are already at new record levels.


It is by now abundantly clear that the market approach to reducing emissions is exactly as appropriate as the market approach to rationing energy. And the reason why is equally clear - carbon pricing is a bust. Over 80% of energy consumption globally remains fossil-fuelled, so aiming to raise carbon prices while keeping energy affordable is an impossible task, like pulling on both ends of a rope. The prices of energy and carbon remain stubbornly linked.


In practice, price-based approaches tend to hurt the poorest, both internationally and within nations, as the deliberate raising of the price of carbon prices the poor out of the market for
energy. This is, as Fleming predicted all those years ago, making the ecological cause deeply unpopular: "enough talk of future generations, my family is cold today". And it is making rapid decarbonisation appear impossible.


TEQs, by contrast, offer a fundamentally different paradigm for delivering emissions reductions. Outside times of immediate energy shortage, the number of TEQs units issued each week is determined not by outright energy availability, but by the nation's agreed carbon budget, which of course shrinks, year-on-year.


In effect then, rather than seeking to price carbon out of the economy, TEQs simply caps carbon emissions in a country, in line with the globally-negotiated budget. And then, as ever, explicitly guarantees equal, fair entitlements to purchase the (carbon-rated) energy available within that constraint.


With the cap in place, there is no longer any need to keep carbon prices high, which offers society as a whole a clear collective focus on the real challenge we face - adapting under the cap, and thus keeping the price of energy as low as possible. The impossible-seeming - yet artificial - tension between striving to raise carbon prices and lower energy prices disappears, and we are left with a simply-understood task that everyone can get behind with enthusiasm.


Under the present market-based system, a hard-won reduction in petrol use in one place, for example, might serve to bring the price down a little, thus only encouraging greater consumption elsewhere and leading to little or no overall reduction in emissions. Understanding this can be deeply disheartening for those attempting to play a practical part in decarbonisation.


Under TEQs, the wider impacts of local efforts would be reversed. Local reductions in energy use would not only save money for those involved, but also play a clear, practical part in aiding the energy transition of the nation as a whole, keeping prices lower for everyone and so actually defending the political sustainability of the TEQs framework and its hard cap on emissions.


Suddenly we really would be "all in it together" at the national scale, with a real sense of common purpose encouraging solidarity and cross-sector collaboration to reduce energy demand and so keep prices low.


Under the bonnet 

This carbon-variant of TEQs, then, has evident benefits. Yet isn't it a practical impossibility to carbon-rate every product and service in the economy (or measure emissions at every chimney and exhaust pipe)? Well yes, it surely is, but happily TEQs requires no such thing.


Fleming's other stroke of genius was to realise that since energy is required for all economic activity, it is possible to cap emissions in the whole economy while only having to carbon-rate its limited number of fuel and energy sources - a far more realistic task. In other words, the number of TEQs units you must surrender when buying fuel or electricity from a particular supplier depends on government analysis of the carbon released in generating and delivering that fuel or electricity across its whole lifecycle.


So if an oil company implements a lower-carbon refining process, it will cost fewer TEQs units to buy petrol refined that way, and of course it will cost fewer still to buy electricity from renewable sources. In this way a real competitive advantage incentivises innovation in reducing the carbon-intensity of energy.[4] 


And for other products, the outcome for the average consumer couldn't be simpler. Imagine you want to buy a computer. This purchase will not require the surrender of any TEQs units (since it is not a purchase of fuel or energy), but the manufacturer of the computer will have had to purchase TEQs units to cover the energy they used in its production. And the company that transported the computer to the shop, or to your home, will have needed to purchase TEQs units too. These companies will ultimately pass on this cost to their customers, like you. Accordingly, you will find that products and services provided in a low-carbon way simply tend
to cost less money. So while the process of making purchases is as straightforward as ever, the cheaper option will more often be the lower-carbon option.


Making physics feel real 

Above all, TEQs provides a means to implement the needed non-negotiable respect for the limits set by physical reality, recognising that while markets indeed have a role in stimulating innovation under the cap, there are not suited to regulating their own appetites. We need to replace the so-called 'market-based frameworks' of present policy with a framework within which the market is constrained.


The purpose of TEQs, then, is not to limit consumption per se, but rather to share out fairly the shrinking energy consumption available within our national energy constraints and/or our carbon budget — in other words, to allow the maximum possible freedom of lifestyle choice within the constraints of reality.


Otherwise, reality is proving all too willing to ration our options.



Shaun Chamberlin co-authored the 2011 All Party Parliamentary report into TEQs and advised the UK government’s feasibility study. He was also involved with the Transition Towns and Extinction Rebellion movements from the outset, and now leads Sterling College’s online programme Surviving the Future: Conversations for Our Time. 

For more info on the TEQs system or the campaign for implementation, visit 


[1] “Homes face winter power cuts inworst-case scenario, says National Grid”, BBCNews, 7th October 2022,

“Number of people receiving three days' worth of emergency food by Trussell Trust
foodbanks in the United Kingdom from 2008/09 to 2021/22”, Statista, 11th May 2022,

[2] “Michael Gove urges Liz Truss to consider energy rationing forfirms”, The Guardian, 1stSeptember 2022,


“British Gas, Octopus and Ovo to paycustomers up to £100 this winter to reduce their electricity use at peak times”, Money Saving Expert, 24thOctober 2022,


“Europe’s age of abundance may be ending”, The Statesman, 24th Sept2022,


“Macron urges French to save energyand seeks 10% drop in use”, The IrishIndependent, 5th September 2022,
“France Inc. May Face Energy Rationing, PM Warns”, Bloomberg,


[3] See historian Mark Roodhouse’s exceptional paper examining wartimerationing: “Rationing returns: asolution to global warming?”, History& Policy,


[4] For more detail on TEQs’lifecycle carbon ratings for fuels, see pp. 21-24 of David Fleming’s Energy and the Common Purpose or Chapter One of the All Party Parliamentary Group report into TEQs, both available at