More on the wider UK cap&trade scheme
We mentioned the forthcoming UK Government white paper which is expected to propose a large increase in the numbers of organizations required to reduce their carbon emissions through indirect monitoring and reduction of their energy usage. This is how the wider scheme is expected to operate.
The FT report of this white paper has also discussed the regulatory burden such a widening would place on small and medium-sized businesses.
“The new scheme would be the latest in a growing list of incentives and restrictions on business aimed at curbing greenhouse gas emissions. EEF, the manufacturers’ group, described the new plan as “a sledgehammer to crack a nut”, saying its research had suggested that one in 10 of its members could be affected.
The scheme’s main targets are meant to be large service-sector organisations such as banks and supermarkets, for whom energy consumption is a relatively small part of total costs. The idea is to create an extra incentive to focus on energy efficiency for managers who generally concentrate on staff and buildings costs.
But the EEF argues that some manufacturers in industries such as defence, electronics and motor components with as few as 50-100 workers could be caught.
In consultations by the Department for the Environment, Food and Rural Affairs (Defra) since the scheme was first suggested in 2005, two possible qualifying thresholds have been suggested for companies: yearly electricity consumption of 3,000 megawatt hours or 10,000 MWh. Ministers think the higher threshold would require about 1,200 companies to take part, or about 5,000 under the lower. The EEF thinks that might include 600 of its members, and possibly thousands of other manufacturers.
The government’s own regulatory impact assessment exercise suggested that with the lower threshold, the cost of administering the scheme would be higher than the investment in energy efficiency that would result from it.”