The CRC Energy Efficiency Scheme is one of the means by which the UK aims to reduce its carbon emissions. The scheme targets office-based organisations such as banks and property companies or any company that has a half hourly electricity meter reading of over 6000 megawatt-hours (MWh) [1].
The scheme involves the recording and monitoring of organisations’ emissions and the purchase of allowances in accordance with their emissions [2]. The more carbon dioxide that an organisation emits, the more carbon allowances it will have to purchase from the government, thereby giving companies a direct incentive to reduce their emissions [2]. At the end of the compliance year when companies purchase the required allowances, a league table will be published, indicating the comparative performance of all the organisations, and thereby giving a further incentive for companies to reduce their emissions [2]. Producing such a public critique of each organisation’s effort will provide a level of public scrutiny, which should help to persuade organisations to reduce their emissions to a greater extent.
Changes to the scheme
In October 2010, the government carried out a spending review, which inter alia involved several changes to the CRC Energy Efficiency Scheme, aiming to simply the process for businesses. Originally the first sale of emission allowances was scheduled to occur in 2011, but this has now been pushed back to 2012 [3]. A prominent part of the scheme when it was first announced was that the revenue that is generated by the sale of allowances would be recycled back to participants [2]. However, this will no longer occur, with the finances being used to support public finances, including some being spent on improving the environment [3]. The government predicts that by 2014-15 the sale of allowances could total as much as £1 billion, so it is easily seen why, given the current emphasis on deficit reduction, they have ceased the recycling of it back to participants and instead directed it towards public financing. Undoubtedly participants will not be happy about this, as it would have helped them reduce their emissions by investing in improved technology. However, if the money is spent on the environment anyway by the government, then hopefully it will be a positive move.
References
[1] Department of Energy & Climate Change (2010) [Online]. Available from http://www.decc.gov.uk/en/content/cms/what_we_do/lc_uk/crc/my_org/my_org.aspx.
[2] The Environment Agency (2010) [Online]. Available from http://www.environment-agency.gov.uk/business/topics/pollution/98263.aspx
[3] HM Treasury Spending Review 2010. Available from http://cdn.hm-treasury.gov.uk/sr2010_completereport.pdf.
