Personal Carbon Allowance - how do you sort Opex and Capex?

I see that the UK's Environmental Audit Commission has been busy blithering away about personal carbon allowances again.

This concept is flawed on so many levels it's unbelievable.

The main issue that I have is that it seems solely based CO2 emissions from the equivalent of what companies call "operating expenditure", or Opex. These are the things that individuals or companies buy on a day-to-day basis - fuel for vehicles, heating bills, holidays, food and so on.

What it excludes is a way to treat CO2 from "Capex" - capital expenditure. This is from the one-off purchases of big things - houses, cars, children, electrical items and so on. These all include a huge amount of CO2 involved in their raw materials manufacture, as well as implicit ongoing "lifecycle" CO2 from their use.

Having a new house made of concrete or brick is probably the least environmentally-friendly thing someone could do in their lives. It would (or should) attract a huge penalty in terms of CO2 credits against your allowance. But how do you deal with people who buy an existing house, made from bricks made years ago? Or people who have an existing property? Do you "amortise" the CO2 emissions in construction over a period of 20 or 50 years? What about if you rent?

This is a huge minefield, which offers great opportunities for the Green equivalent of "creative accounting".

Some other fun things to look out for:

- Whose allowance do gifts come out of? Say I buy you a flight... but you decide not to take it. Do you (or I) get a refund?
- What about family purchases? Say Dad buys a family holiday. Does it come out of his allowance, a pooled family allowance, or each family member's individual quota?
- Do children get a full quota? Can parents use it for their own purposes?
- If I own a company (as I do), how do I treat my business' emissions? If I have to fly to see a client, does it come out of my allowance, my company's, my client's?

Put simply, it's unworkable, and undesirable.

And if they bring it in anyway, I'm going to be the first in line to set up a company to play the loopholes.