IEMA Calls for Long Term Policy and Price Certainty in Government's CRC Consultation

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Business and public sector organisations call for long term policy and price certainty in the Government's CRC consultation

"Government urgently needs to address the need for long term carbon price and policy certainty in the CRC scheme. The majority of private and public sector professionals IEMA consulted consider that long term carbon price certainty is vital to enable effective business planning and investment in energy efficiency," said Martin Baxter, Executive Director - Policy, IEMA.

The CRC consultation proposals for simplifying the scheme and reducing administrative costs have also not convinced businesses and public sector organisations. "Most IEMA members do not consider that the Government's proposals will achieve significant cost savings and many will not automatically change their systems if government changes the rules," said Martin Baxter.

In developing its response to the Government's consultation on CRC, IEMA engaged with over 200 environment professionals in the public and private sector in three workshops during May and June this year. The majority of IEMA members recognise that the current CRC scheme has increased action on energy efficiency. IEMA members also found that the scheme has helped drive energy efficiency savings in their organisations by raising the profile of carbon reductions at Board level and this coupled with the need to comply have been effective drivers for energy efficiency in organisations. The aspects of the scheme that are significantly driving improvements by organisations are the requirements to report each year and the need to budget and pay for carbon allowances.

Although the CRC consultation did not address scenarios relating to scrapping the scheme, the Chancellor separately raised this in his Budget statement earlier this year. If the scheme were to be scrapped and replaced by a new tax, IEMA considers that any replacement system must secure similar overall levels of emissions savings as the CRC scheme. A new tax regime would not be sufficient on its own to achieve emission reductions, a reporting requirement would still be needed to help achieve this.

"If the Government were to scrap or simplify CRC, the case for mandatory greenhouse gas (GHG) reporting will be strengthened. With CRC simplification there will be potentially 1,000 fewer organisations in the scheme. These organisations who do have significant carbon emissions, could be left with no additional fiscal, or reporting / reputational driver for cutting their emissions. IEMA members are also clear that regulatory and policy continuity is essential and companies should not be left with a time gap between scheme changes and new policies," said Martin Baxter.