It’s just another government tax now
The Carbon Reduction Commitment (CRC) was not introduced as a way to reduce UK plc’s carbon emissions but as a way of safeguarding the national energy infrastructure, according to an analyst.
Andrew Jones, of Alquist Consulting, was speaking at a recent event held by DatacenterDynamics in London, aimed at examining the drivers behind the legislation and the impact it will have on businesses.
Jones criticised the early stages of the initiative as the government at the time was not clear enough when discussing the reasons behind the CRC, he believes.
"The reason they need to push energy efficiency is nothing to do with the green agenda, it’s to do with this gap [between energy requirements and our ability to meet them]. I don’t hear many politicians talking about these issues when it comes to CRC. " he said.
As well as claiming that green is not the primary motivation behind the CRC Jones also criticised recent changes to the scheme outlined in October’s Comprehensive Spending Review, adding that it is now little more than another government tax.
"The CRC has a bold claim to transition us to a low-carbon economy, but that is going to be difficult," Jones said. "When it was introduced the idea was that companies would collect data and send it to the government and the top 5,000 would join a trade-in scheme where they could buy and sell allowances."
Then, Jones continued, the spending review came along and changed all that. It contained just three sentences related the CRC:
"The CRC Energy Efficiency scheme will be simplified to reduce the burden on businesses, with the first allowance sales for 2011-12 emissions now taking place in 2012 rather than 2011. Revenues from allowance sales totalling £1bn a year by 2014-15 will be used to support the public finances, including spending on the environment, rather than recycled to participants. Further decisions on allowance sales are a matter for the Budget process," it read.
"The government promised to simplify the scheme; the way they’ve managed to do that is by keeping the money," Jones said. "It is now another government tax. It’s a shame because there was genuinely a double incentive for companies to improve their efficiency, but that’s gone now."