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The CRC has taken the need to save energy to the heart of businesses
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Since the Carbon Reduction Commitment simplification details were announced at the end of June, it has been said that the prolonged uncertainty caused by the extended consultation will mean that businesses delay initiating carbon-cutting measures. Can you explain why the consultation period has been extended and what DECC hopes to achieve by this?
The cheapest energy is the energy we don’t use, so cutting fuel use in businesses is a no brainer. I have listened to those companies who told me the CRC was overly complex and bureaucratic, and I have taken action which is why we are proposing changes to the scheme which will make it much simpler for businesses to participate.
The start of phase two in 2013 presents a natural point to implement any changes, and is a far more common sense approach than trying to change the scheme mid phase. It would also run counter to our simplification objective.
What do you say to those who claim the CRC is far too complicated and will remain so, despite the proposed simplifications?
I am determined to make the scheme that the coalition inherited from the last government much more business friendly. We will be formally consulting on how to simplify the scheme, so businesses and indeed any interested parties will be able to input comments in to that process. But I believe the new leaner, simplified and re-focused CRC will stay true to its intent of helping businesses to save energy whilst making compliance less burdensome.
With the news that our carbon emissions rose in 2010, what role do you think the CRC can play in achieving the UK’s carbon reduction goals, now and in the coming years?
There’s three things I think the CRC can do. Firstly, by attaching a price to the carbon that businesses emit, it will bring the fight against climate change to the attention of finance directors. This will escalate the issue to the boardroom where senior executives will have to justify the costs of energy inefficiencies. Secondly, through the CRC, businesses are required to monitor, report and manage their energy use. This will instill behaviour change like never before, something we couldn’t achieve by just enforcing a tax. Lastly, through the CRC’s performance league table, there will be a reputational motivation as a business’ environmental credentials are ranked against its competitors.
Is there any evidence that the CRC is already having a positive impact on the low-carbon economy and the carbon emissions of participants?
As well as the potential for cutting energy use and saving money, the CRC is creating a market in energy-efficiency goods and services driven by the increasing demand from public and private sector organisations. Coupled with the Green Deal next year, our national home energy improvement plan, the energy efficiency sector stands to grow substantially.
Does DECC have any plans to expand the CRC (or a similar scheme) to smaller organisations/businesses?
There are no plans to introduce a mandatory scheme for smaller businesses. What we do hope, though, is that small businesses take advantage of the Green Deal when it starts next autumn. The Green Deal will be open to any business operating out of a non-domestic property including larger businesses covered by the CRC. The kinds of things firms might be able to do under Green Deal include improvements to heating, lighting and insulation.
It will work by enabling businesses to pay for energy efficiency improvements through a charge on their energy bill, with the level of expected energy saving being higher than the cost of repayment, enabling businesses to spread the costs over time rather than having to meet the full cost up-front.
This interview appeared in the September/October 2011 issue of Greenbuild magazine. For a free subscription, click here .
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