Carbon Reduction Becomes Tax
Datamonitor analyst Neil Atkinson informs just4theplanet:
This unexpected development was not actually mentioned during Mr Osbornes statement, was the governments abrupt decision apparently made without consulting the industry - to retain in the Treasury money collected from large businesses under the so-called Carbon Reduction Commitment scheme.
Prior to yesterday the understanding was that money collected would be distributed back to the industry as a subsidy to encourage energy efficiency in the UK. Now the CRC programme is essentially a tax to penalise those who dont fall in line. It is still a very green policy, but it could fall flat because the penalties arent big enough to discourage non-compliance.
Yesterdays statement confirmed the widely expected cut of 20 per cent in the budget of the Department of Energy and Climate Change. But the headline number contains some positive elements as well as disappointments.
On the more positive side the commitment to spend 800 million to ensure renewable heat operators are paid premium prices for every unit produced is a welcome step towards stimulating growth in this sector. The increases in resources for nuclear decommissioning and the controversial and technologically unproven carbon capture and storage initiative (CCS) will also be met with a cautious welcome from those hoping that the government will take a long-term view of energy policy rather than just responding to the short-term crisis.
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This unexpected development was not actually mentioned during Mr Osbornes statement, was the governments abrupt decision apparently made without consulting the industry - to retain in the Treasury money collected from large businesses under the so-called Carbon Reduction Commitment scheme.
Prior to yesterday the understanding was that money collected would be distributed back to the industry as a subsidy to encourage energy efficiency in the UK. Now the CRC programme is essentially a tax to penalise those who dont fall in line. It is still a very green policy, but it could fall flat because the penalties arent big enough to discourage non-compliance.
Yesterdays statement confirmed the widely expected cut of 20 per cent in the budget of the Department of Energy and Climate Change. But the headline number contains some positive elements as well as disappointments.
On the more positive side the commitment to spend 800 million to ensure renewable heat operators are paid premium prices for every unit produced is a welcome step towards stimulating growth in this sector. The increases in resources for nuclear decommissioning and the controversial and technologically unproven carbon capture and storage initiative (CCS) will also be met with a cautious welcome from those hoping that the government will take a long-term view of energy policy rather than just responding to the short-term crisis.
ABOUT DATAMONITOR
The Datamonitor Group (www.datamonitor.com) is a world-leading provider of premium global business information, delivering independent data, analysis and opinion across the Automotive, Consumer Markets, Energy & Utilities, Financial Services, Logistics Express, Pharmaceutical & Healthcare, Retail, Sourcing, Technology and Telecoms industries. Combining our industry knowledge and experience, we assist more than 6,000 of the worlds leading companies in making better strategic and operational decisions.
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