The CRC Energy Efficiency Scheme Pays the Aggressor

Posted under environment by Daniel Stouffer

Innovative and forward thinking organizations have welcomed the introduction of the CRC Energy Efficiency Scheme, the British government’s complicated and far-reaching attempt to make a difference in the arena of carbon emissions and climate change. The scheme, due to officially get under way in April of the new year, calls for the largest consumers of energy to pay for the right to emit carbon as a consequence. However, these payments are designed to be reimbursed to the company with additional incentives for those who also take clear action.

Companies that are proactive have generally welcomed the CRC Energy Efficiency Scheme as none of the revenues collected are designed to be steered to the government or the taxpayer. This conflicts with a similar initiative currently under consideration in the United States, for example. British companies see the project as an opportunity, as if they make strident steps to reduce their carbon emissions they will not only get efficiencies associated with lower electricity use, but they could attract bonuses if they perform better than their competitors.

The British government intends to publish a league table of results, showing the public and media who is performing and who isn’t. Reputational harm may result for those companies that fall below par.

It is inconceivable if true, that according to one recent survey a majority of organizations affected by the CRC Energy Efficiency Scheme remain passive. They appear not to have significant plans in place to start reducing their emissions and to become sustainable.

If the company thinks that it can merely comply with the letter of the regulations, eat the administration costs and not suffer any further repercussions, it is mistaken. A number of different metrics are used to determine how an organization interacts with the CRC Energy Efficiency Scheme including the early action metric. Companies should seek certification by the Carbon Trust Standard or equivalent organization and install automatic meter readers throughout the site.

The crux of the CRC Energy Efficiency Scheme is to measure a straightforward decline in energy use year-by-year. However, additional modifiers are also in play and the company that also decreases its emissions while growing will be better off. It is clear that those who are aggressive stand a chance of greater reward, while those who are passive will fall back.

In 2013, the scheme will mature into an auction-based operation, with an overall cap placed on the number of carbon emissions tradable across the country. This is sure to put financial pressures on carbon as a commodity and make the trading environment even less palatable to those organizations who are not proactive.

As it will be necessary to purchase carbon allowances for each following year, an organization that reduces its position in the league table through clear action and results will reduce its cash flow burden associated with this element as well. A company that views the CRC Energy Efficiency Scheme as an opportunity rather than a threat may be smiling all the way to the bank.

Daniel Stouffer has a lot of information about the CRC Energy Efficiency Scheme and how a visit to www.verisae.com will aid you.