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Carbon reduction being hit by Government stealth tax

New research being presented to Parliament today has indicated that attempts to encourage some of the UK’s largest organisations to cut carbon have been hit by a change in Government policy. 

Originally designed to reward carbon cutting organisations financially and to penalize poor performers through a performance league table, the CRC policy has effectively turned into a tax. The competitive element was dropped when the Treasury announced that it was keeping all the income generated by the CRC rather than re-distributing it.

The research, which was undertaken by Global Action Plan with 108 organisations affected by the CRC indicates that this change in policy has had a detrimental impact on encouraging them to save carbon.  41% of respondents stated that the CRC placed a high administrative burden on them with 42% stating that it had caused resources to be moved away from other sustainability initiatives.  The performance league table, which was meant to drive change, has had little impact with 80% of respondents not changing their approach in response to the publication of the first league table. The research, sponsored by CloudApps, was unveiled at an evidence hearing with the Energy and Climate Change Select Committee in the House of Commons today. 

Global Action Plan’s CEO, Trewin Restorick, said:

“The businesses we work with need government policy to be consistent and coherent to help them be more sustainable.  Recent environmental policy has been anything but that. The stealth tax raid means that the CRC is now a tax with a high administrative burden and a pointless Performance League Table.  It needs to change.”

However, looking at the positive elements of the initiative, Restorick added:

“The CRC has been effective in getting organisations to measure their carbon emissions. This is the first essential step in getting them to manage their carbon better. Once measurement systems are in place, administrative costs will decrease and there is now a real opportunity to slightly refine the CRC to make it an important driver to shift the UK towards a lower carbon economy.”

Global Action Pan has made four recommendations for improving the CRC. 

1. It should be retained as organisations are now measuring and reporting on their carbon emissions.  As a result administrative costs will decrease and managing carbon better in the future will be easier. 
2. Administrations should be further streamlined now that the competitive element of the CRC has been removed. 
3. The CRC should be the basis for compulsory reporting on carbon emissions. 
4. The Performance League Table should be reviewed so that it has a reputational impact on companies, for example, by providing sector-specific league tables (banking, retailers, etc.).