FREQUENT flyers and drivers of gas-guzzling cars will pay more as part of a green “money exchange” being discussed by ministers. Stay-at-home, car-free households with solar panels and a wind turbine would make money.

David Miliband, the Environment Secretary, is looking at giving consumers a personal carbon allowance to persuade them to adopt a greener lifestyle. In return, consumers would be able to sell unused carbon emissions. The carbon allowances would cover the amount of energy people used, whether through electricity, gas, petrol or air travel.

Mr Miliband said that the poorest households would benefit most from the scheme. “Imagine a country where carbon becomes a new currency. We carry bank cards that store both pounds and carbon points. When we buy electricity, gas and fuel, we use our carbon points as well as pounds,” he said in a speech to the Audit Commission last night.

“To help reduce carbon emissions, the Government would set limits on the amount of carbon that would be used. People on low incomes are likely to benefit as they will be able to sell their excess allowances. People on higher incomes tend to have higher carbon emissions due to higher car ownership and usage, air travel and tourism and larger homes.”

The aim is to give every citizen a carbon allowance; however, a precise quota of emissions and a pay-back tariff have not yet been devised and it is not clear who would police the system. Introduction of carbon loyalty cards, league tables and use of carbon offsets on purchase of greener products are also being examined to give consumers perks for small changes in their behaviour.

In an interview with Channel 4 News, Mr Miliband denied suggestions that elderly people would switch off their heating in the winter to save carbon credits. “I don’t think it is right to say it would necessarily penalise the elderly. The elderly are some of the most thrifty in our society.”

Friends of the Earth said yesterday that such a system was years away and called for immediate action to cut Britain’s carbon emissions.

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