The CBI, an organisation representing British business interests, has published a new report Back to the Answer: Making the CRC work today (March 29).

In its report the influential CBI claim the scheme, originally intended to reward businesses who reduced emissions, is ‘untenable’ in latest form and should be ditched unless the Government returns it to an incentive based system.

CBI’s director for business environment, Rhian Kelly, believes the changes, made just two weeks after the final deadline for the scheme closed, was an ‘unexpected blow’ to organisations that had joined the scheme in good faith.

Mrs Kelly said: “We now have a carbon reduction scheme that doesn’t encourage companies to reduce carbon emissions and actually adds to the cost of doing business.

“The Government pulled the rug out from under organisations that signed up to a scheme to reward them for becoming energy efficient in good faith.

“Without a proper incentive the scheme lacks credibility and has lost businesses’ trust.

“Policy uncertainty like this undermines the long-term energy efficiency plans of companies, and will do little to help us reach our emissions targets.”

The report put forward two alternative options:

  • Maintaining the CRC in its current form which would involve participants being able to buy carbon allowances at a fixed price.
  • Moving the CRC to a full cap and trade system.

Luke Walsh

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