From today, 1 Apr 2010, 5000 UK businesses will have to carry out an audit of their carbon dioxide emissions. Businesses which spend £500,000 upwards on energy have to participate in the scheme.
They have to register by September 2010, and they will be ranked in a league according to the amount of energy they have saved or spent. There will be financial rewards and penalties depending on their position. They will have to buy carbon allowances at a fixed price of £12 per tonne to cover their emissions.
It is estimated that the average cost of administering the scheme will be £25,000 per business.
Business groups are not impressed. The scheme is called the Carbon Reduction Commitment Energy Efficiency programme (CRC) and it looks like being costly to administer and excessively complex. PricewaterhouseCoopers estimate that it will add 6% to the companies' energy bills.
It will also discriminate against those companies which are already energy efficient because it only looks at future energy savings. It is not retrospective.
Some of the big energy companies have already begun offering advisory services to help smaller companies understand how to comply.
There is no evidence that carbon trading has decreased carbon emissions.
It is difficult to see how this legislation will benefit our businesses.
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