Reducing energy use will save organisations a total of £1bn and more than 4m tonnes of carbon dioxide emissions a year by 2020, according to the Department of Energy and Climate Change, which this week announced the final details of its carbon reduction commitment energy efficiency scheme.
The most obvious change is the name – it used to be the plain old carbon reduction commitment, but presumably that was not as redolent of financial savings as the new, improved moniker.
The scheme, which is described as a "regulatory incentive", is designed to improve energy efficiency in large public and private sector organisations by making them pay for carbon allowances. It is the UK's first mandatory carbon trading scheme. Starting in April 2010, it affects all large organisations in the private and public sectors that used 6,000 megawatt hours of electricity in 2008 – the equivalent of an annual bill of about £500,000, as we reported earlier this year.
http://www.guardianpublic.co.uk/carbon-reduction-commitment
Large energy users – defined as those who spend about £0.5m a year on power -- are required to participate from 1 April 2010. Between 5,000 and 20,000 organisations are expected to be affected by the scheme, including most local authorities and all government departments.
However, the impact of the new scheme has been eased by the latest announcement. Organisations will now only have to report, rather than pay for, emissions in the first year, 2010-11. In subsequent years they will have to buy allowances corresponding to their emissions.
According to a note on the changes by Jon Lovell, head of sustainability at property consultant Drivers Jonas, this avoids the double whammy of having to buy two years' worth of allowances in 2011 and will soften cash flow impact at a time when both private and public sector organisations are being squeezed financially.
Lovell says that the change will also enable participants to get a feel for the mechanics of the scheme before its financial obligations kick in.
Another change in the rules will enable organisations to disaggregate subsidiaries whose energy use would qualify them for the scheme in their own right. Lovell explains that this benefits the large group by reducing its administrative burden. The subsidiary would also have more scope to influence its position in the performance league table that the government is also planning to use to promote the PR benefits of reduced energy use—the counterpoint of which will be to name-and-shame those who have not performed so well.
There is greater clarity, too, for public sector organisations such as schools. Where the participant is part of another body it can participate as part of the parent, so state-funded schools will continue to be grouped with their local education authority.
