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The CBI yesterday warned that the Government’s flagship energy efficiency scheme is untenable in its current form, as it reiterated its call for the incentive behind the Carbon Reduction Commitment to be restored.

Launching a new policy brief, Back to the Answer: Making the CRC work, the UK’s leading business group argues that the Government’s decision to remove the revenue-recycling element at October’s Spending Review has undermined the original purpose of the scheme of encouraging organisations to cut emissions.

The CBI added that the fact that the decision was made just two weeks after the final deadline closed came as an unexpected blow to organisations that had joined the scheme in good faith.

Rhian Kelly, CBI Director for Business Environment, 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 CBI said if the Government restores the original incentive behind the scheme, progress could be made on making it more effective. This could involve two possible 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.

However, if the Government does not restore the original incentive in the CRC, it should scrap the scheme and consult on a more simplified mechanism to encourage energy efficiency across the business community. This mechanism should be distributed across all sectors and avoid the complexity and resulting business concerns the CRC currently creates.

A copy of Back to the answer: making the CRC work is attached. 

Notes to Editors:

The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. With offices across the UK as well as representation in Brussels, Washington, Beijing and Delhi the CBI communicates the British business voice around the world.

Media Contact:

CBI Press Office on 020 7395 8239 or out of hours pager on 07623 977 854.



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