Recently in Carbon Tax Category

Getting to grips with CRC's deadlines and the scheme's next steps

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I recently received an email flyer for the Carbon Show later this year warning me that if my organisation is registered within the CRC Energy Efficiency Scheme I will know the deadline for returning my'Footprint Report' and 'Annual Report' is today, Friday 29 July.

The flyer asked: Will you meet the deadline? How easy have you found it to produce your organisation's carbon footprint? How confident are you that your figures are accurate? Do you know the penalties for late submission?

I think for CRC, organisations will get used to be able to answer these questions, meet the requisite deadlines and build them into their working practices as time goes by. Although there has been much discussion about the future of CRC, there is little doubt that it is here to stay. We are at the end of the beginning, if you know what I mean.

If you're still wondering where CRC will end up, some good sources of information are this Next Steps document, which outlines the current CRC state of play and gives extensive details of the recent consultation and future proposals, and the Cambium website which discusses the impact for both CRC's participants and for suppliers of energy efficiency services.

By the way, with energy efficiency in mind, there is an article here on modular data centres

 

Cambium sets out CRC state of play for Participants and Suppliers

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For those wondering what the latest position is with the Government's Carbon Reduction Commitment (CRC) Energy Efficiency scheme, I can recommend a couple of white papers written by the Cambium consultancy.

 

The two papers, one for participants in the scheme and the other for suppliers of energy efficiency innovations and services, review the key elements of Department of Energy and Climate Change's (DECC) proposals and identify those parts of the CRC legislation that DECC is seeking to change as well as those key elements of the Scheme that DECC intends to retain following the consultation process.

 

Finally they consider the likely implications of these changes for both participants and those supplying goods that can improve energy efficiency within the affected organisations.

 

You can accesss the papers here

 

Cambium report targets CRC innovation opportunities for suppliers

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I attended the launch yesterday of a new report targetting the sustainable innovation opportunities offered by the CRC Energy Efficiency Scheme.

The report, by sustainable innovation specialist Cambium, provides a  systematic analysis of the financial and reputational exposure of the 2,770 so called 'participants' in the CRC Scheme. This reputational aspect is important with the first performance league tables due out in six months time, in October.

The report, which was launched at Intellect in London with attendance from Intellect, hosting specialist Rackspace and the UK Centre for Economic and Environmental Development (UKCEED) is aimed primarily at suppliers of innovative technologies that can help the organisations affected by this legislation to reduce their likely tax bills, cut energy use and protect their reputations as well as be able to pomote themaselves as responsible businesses.

Cambium believes the report will be of use to trade bodies and CRC Participants, policymakers and public stakeholders, and investors.

The report features an index which examines public and private sector participants for a range of sustainability and energy reduction related indicators and categorises them as leaders, early majority, late majority or laggards within their sector, providing a measure of their likelihood to invest in and adopt energy saving or other innovative technologies, supporting sustainable economic growth. 

The Cambium study identifies and explores the significant differences between the public and privat sector attitudes to a "carbon" and "social awareness" indicator and makes recommendations for better targeting of the market opportunity by suppliers.

There is a release with more details here

You can get the report here 

Summing up what the Budget means for 'Greentech'

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I was talking to a company the other day that has an interest in the Climate Reduction Commitment (CRC) legislation and while we didn't expect any major changes relating to CRC in the Budget, there was a feeling of 'you never know'.

The devil is still in the detail, and more may emerge over the coming days. But it seems there are no changes to CRC announced by George Osborne.

Those 'green' issues that were covered have been well summed up by the Guardian here

 

The end for the Carbon Reduction Commitment?

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It looks as if someone within the government is flying a kite to see what reaction there might be to the ending of the Carbon Reduction Commitment (CRC).

This article appeared at the weekend, suggesting that CRC could be merged with other taxes following the publication of a number of so-called "discussion papers" for the 5,000 companies due to be affected.

As the piece points out, the news that more changes could be on the way will cast more confusion over the tax, which has been criticised for baffling businesses. It's said, however, that doing away with the CRC would not necessarily mean that companies would have to pay less because its intended effects could be included in another green tax covering a wider number of businesses.

This year's Budget is being held on March 23rd, and I'm told the future of CRC could be up for discussion in government circles around a week before, leading to the possibility that an announcement about the future of CRC - and a new green tax? - could be made in the Budget.

CRC was originally meant to reward companies for reducing their emissions and penalise those who failed to do so. But the Treasury seemed to pull rank on the Department of Energy and Climate Change when it decided to, as the article points out, 'pocket the proceeds meant to go to good performers in order to help reduce the deficit.'

There is a degree of frustration about the government's dithering over CRC, not least from companies who in good faith are trying to develop services around it, but find themselves twisting in the wind as the government goes back and forth over its future. Leaks like the one at the weekend don't help them. And they certainly don't help organisations - and particularly their CIOs and Finance Directors - looking for some policy certainty going forwards. 

The surprising Chinese view on sustainability

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I was interested in this blog post by Andrew Winston on the view towards sustainability in China.

On a business visit to Beijing last week to discuss climate change issues, Winston says he was struck by the focus on green issues in China.

He says, "Each morning at my hotel I received the China Daily, the country's main English-language newspaper. Throughout the news and business coverage, the feeling that sustainability is crucial to the future of the country and its industries is palpable.

Out of 20 feature articles in the business section on November 15th, for example, five were all about the glories (and sometimes challenges) of green. Clearly this is anecdotal evidence, but it demonstrates a level of conversation that the rest of the world should take note of."

And sure enough, if you check out today's business section of the China Daily, there are a range of green stories, including one about a green tax.

 

For CRC watchers, it's time to take stock

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A couple of days after the Spending Review, and for those who've been watching and commenting on the complexity of the Carbon Reduction Scheme (CRC) over the last years, it's time to assess where we are.

The announcement was that the 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. More importantly, revenues from allowance sales 'will be used to support the public finances, including spending on the environment, rather than recycled to participants'.

The recycling of revenues was a key aspect of the legislation. The original plan was for the scheme to be revenue neutral, with the income paid back to the best performing companies, based on a published league table.

It appears for the time being at least, that the league table aspect will stay but, as this blog from Chloregy suggests, that means the scheme is all stick and no carrot.

Two of the comments I heard yesterday were that although the government has at a stroke simplified the scheme, it's approach has been unimaginative, almost a back of the envelope calculation to see how it could fund all of its environmental initiatives. And as it's now essentially a carbon tax, why not simply call it that? Carbon Reduction Commitment Energy Efficiency Scheme - to give it its full title - now sounds a bit redundant.

There are also still some potential benefits that are likely to result from the CRC, including demand for remote working technologies may also grow (which transfer the carbon burden to homes instead of businesses, thereby taking it out of CRC).   The CRC is undoubtedly driving an unprecedented focus on energy and this is likely to generate increased demand for a whole range of ICT enabled services and low carbon technologies such as building management systems and advanced meters. This whole area is of interest to companies such as Cambium, who have become advanced in their thinking on the opportunities available.

At the same time, organisations such as Intellect, which produced an extensive policy response to DECC, remain concerned that the league table has created a risk of reputational damage for companies. Its comments say:

"The league table element has created a high degree of uncertainty for businesses.  Consultees to the original DECC proposals (not just those from our sector) were overwhelmingly against the creation of a league table but their advice was ignored. The league table creates something that is extremely worrying for large, customer facing businesses - the risk of reputational damage.  This would not be a problem were the league table to provide a realistic reflection of performance, but it does not.  Because it does not compare like for like and does not reflect carbon productivity, it will inevitably be misleading.

It continues:

"The league table will not reflect whether a company has achieved emissions reductions through outsourcing a carbon intensive activity or by making it more efficient.  Moreover it does not compare emissions reductions by industry (like for like).  The league table, despite the early action metric, does too little to reward companies who have already implemented energy efficiency measures.  Companies who have already minimised emissions may find it harder to deliver ongoing savings than late starters, so they may find it more difficult to maintain their place in the league table particularly in later phases. The league table also does little to differentiate by performance because a company with consistently high revenue and low carbon emissions may achieve a similar ranking to a company with consistently low revenue and high carbon emissions.  Despite the complexity of the legislation, the league table is an over-simplified way of differentiating performance.  Observers are unlikely to understand the detail behind the simple ranking numbers and may make uninformed judgements."

In summary, Intellect says, if the CRC were better designed, we could expect to see the following:

a)     A cap and trade operating properly, where carbon is reduced at least possible cost by those best placed to do so

b)     Organisations that are the most energy efficient and have the highest carbon productivity sitting, deservedly, at the top of the league table

c)     Businesses competing on energy efficiency instead of league table tactics

d)     Carbon liability attached to those who create the demand

e)     Significant net reductions in emissions being generated by a tightening cap

It will be interesting to see what new thinking emerges on CRC a.k.a the Carbon Tax, over the coming weeks. 

 

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