The UK Government has unveiled the final details of its Carbon Reduction Commitment (CRC), which as of April 1, 2010 will require large public and private sector organisations to report and reduce their carbon emissions. This is aimed at boosting energy efficiency measures.
Organisations that consume at least 6000 MWh a year – equivalent to spending £500,000 on electricity – will be required to purchase allowances to cover their annual energy usage. At the end of the monitoring and reporting period, participants will have to surrender their allowances or buy extra ones to cover their consumption. Penalties on defaulters should act as a deterrent.
The scheme has been renamed as the CRC Energy Efficiency Scheme to sufficiently reward organisations’ investment in renewables through their separate listing of such measures.
To avoid cashflow problems, participants will only need to report their emissions and do not need to buy allowances in advance.
The scheme is expected to drive large organisations to invest in energy efficiency measures that they might not do otherwise. By 2020, Government figures put the potential savings at £1 billion a year.
The next step would be, like we suggested in this blog, to allow organisations to trade their allowances by cutting down on emissions. But as with cap and trade between nations, the issue is if this will merely transfer the emissions instead of reducing them.??
Between imposing committments and awareness campaigns, which is a better approach?
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