CRC ‘stealth tax’ damaging attempts to cut carbon

New research being presented to Parliament today (May 17) indicates that attempts to encourage some of the UK's largest organisations to cut carbon have been hit by a change in government policy.

A Global Action Plan study carried out among 108 organisations affected by the carbon reduction commitment (CRC) indicates this change in policy has had a detrimental impact on encouraging them to save carbon.

The research revealed that 41% of respondents felt 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 also had little impact with 80% of respondents not changing their approach in response to the publication of the first league table.

The research is being unveiled at an evidence hearing with the Energy & Climate Change Select Committee in the House of Commons at 11.45 this morning.

Speaking to edie ahead of the hearing, Global Action Plan’s CEO Trewin Restorick said that one of the problems with the CRC was that it did not cover carbon emissions from transport.

“If this is a major source of emissions for a company the CRC has meant that, in some cases, resources are being diverted away from an area where maximum impact could be made,” he said.

On a more positive note, the research found that the CRC has been successful in getting companies to better measure their carbon emissions. Carbon reporting was a new action for 40% of respondents while 67% felt that the CRC had improved their measurement of energy.

Based on the research findings, Global Action Plan is calling for the CRC to retained as organisations are now measuring and reporting on their carbon emissions. As a result, administrative costs should decrease going forward.

The thinktank also wants the CRC to form the basis for compulsory reporting on carbon emissions, and for the performance league table to be reviewed so that it has a reputational impact on companies – for example, by providing sector specific league tables.

While Restorick told edie he was hopeful the CRC would be retained, he warned that the “mood music from the Treasury is not optimistic” and that ditching it would have a range of serious implications.

“It will weaken the likelihood of mandatory carbon reporting being introduced, it will send signals to business that the Government isn’t committed to carbon cutting and it will remove one of the few mechanism that are in place to encourage larger employers to take carbon reduction seriously,” he said.

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

Maxine Perella

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie