Climate Legislation

Global legislation

As our understanding of climate change and global warming has increased it has continually risen up the political agenda in a greening of the political process. Under the advise off key climate change scientists across the world there has been an increasing amount of international agreeement that action is essential in order to mitigate against the worst impacts of dramatic changes to the Earth's climate.

The Kyoto protocol formed in 1997 by the United Nations at Kyoto in Japan is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC) which is an international treaty aimed at achieving a stabalisation in the atmospheric concentrations of greenhouse gases. The Kyoto Protoccol was ratified by 187 countries and marked the first step is producing global legislation to tackle climate change and greenhouse gas emissions. It set global targets to reduce greenhouse gas emissions by 5.2% against 1990 levels and introduced mechanisms by which countries could achieve these reductions.

In the UK

Under the Kyoto Protocol the UK Government originally commited itself to a 20% reduction in Greenhouse Gas Emissions by 2010 and had a more long term aim of a 60% reduction by 2050. To achieve these reducctions the Government has used a range of legislation  and campaigns to spearhead a UK reduction in Carbon Emissions.

In October 2008 The Department of Energy and Climate Change (DECC) was created to manage and ccombine both Energy and Climate change Policy. The DECC works to ensure that the right legislative framework is in place to meet UK policy objectives which are to reduce greenhouse gas emissions in the UK, confirm global commitments to tackle climate change as well as ensuring secure and affordable energy supply.

To date the DECC has successfully taken three Bills through Parliament, which are the Energy Act 2008, the Climate Change Act 2008 and the Energy Act 2010. The Climate Change Act formed in 2008 is a piece of legislation which introduced the world’s first long-term legally binding framework to tackle the dangers of climate change.

The Climate Change Act was introduced to create a framework  approach to managing and responding to climate change in the UK, by:

• setting ambitious, legally binding targets of a 34% reduction in Greenhouse gas emissionns by 2020 and 80% by 2050
• taking powers to help meet those targets
• strengthening the institutional framework
• enhancing the UK’s ability to adapt to the impact of climate change
• establishing clear and regular accountability to the UK Parliament and to the devolved legislatures.

The Carbon Reduction Commitment

The CRC Energy Efficiency Scheme (formerly known as the Carbon Reduction Commitment) is the UK's mandatory climate change and energy saving scheme. The scheme which was introduced by the DECC under the Climate Change Act, started in April 2010 and is administered by the Environment Agency. It is central to the UK’s strategy for improving energy efficiency and reducing carbon dioxide (CO2) emissions. The CRC scheme has been designed to raise awareness in large organisations, especially at senior level, and encourage changes in behaviour and energy efficiency.

What does the Scheme involve?

The scheme involves qualifying organisations monitoring their greenhouse gas production and purchasing allowances or permits to emit carbon dioxide. The more emissions they produce the more allowances thry will need to purchase. The scheme essentially applies a financial benefit or cost saving for reducing carbon emssions and imposes potential costs or regulatory fines on organisations who do not make the required energy savings or emissions reductions.

The scheme features an annual performance league table that ranks participants on energy efficiency performance. Together with the financial and reputational considerations, the scheme encourages organisations to develop energy management strategies that promote a better understanding of energy usage.

What are the cost implications?

The Carbon Reduction Commitment has the potential for a range of financial implications for the qualifying organisations. These costs might include those associated with administration and reporting to the scheme aswell as any consulting advice required, or the purchase of technoclogy or new processes to reduce the carbon footprint of the organisation. Other costs will result from the requirements to purchase carbon credits or allowances compulsory under the scheme and the potential for any fines or penalties arising from non-complience or poor performance within the aims of the scheme.

However the good news is that for proactive organsations that perform well and achieve a strong position in the annual league table there are considerable opportunities for financial benefits and cost savings. The money raised through the purchase of emissions credits and required allowances will be awarded back to participants, according to their position in the annual league.  Other benefits from a strong performance may include improved efficiency and reduced energy costs and the additional benefits of an improved environmental image to your end clients and the general public. In many instances it has been shown that a strong environmental image can dramatically improve the bottom line of your organisation.

In many instances the opportunities for financial gain for you and your business may outweigh the financial investment required to achieve an improved environmental performance. Helping both your business and the Environment.

Does my organisation qualify?

Initially the scheme will only target large public and private sector organisations which nationally account for approximately 10% of UK greenhouse gas emissions. Organisations are eligible for inclusion in the CRC scheme if they have at least one half-hourly electricity meter (HHM) settled on the half-hourly market. All organisations that consume more than 6,000 megawatt-hours (MWh) per year of half hourly metered electricity during 2008 qualify for full participation and are required to register with the Environment Agency.

The organisation which are eligable for the scheme but do not meet the 6000MWh threshold will still have to make an information disclosure of their half hourly electricity consumption during 2008. It is estimated that initially around 5,000 organisations will qualify for full participation and will incclude organisations such as supermarkets, water companies, banks, local authorities, universities and all central Government Departments. Qualifying organisations will have to comply legally with the scheme or face financial and other penalties. An estimated 15,000 will have to make an information disclosure. 

In the future the DECC will have the ability under the Climate Change Act to increase the scope and involvement of the CRC or to introduce further schemes aimed at other UK organsations so even if your orgnaisation is not effected by the current legislation this may not exclude you from action under future legislation.

Be prepared - save money

Carbon Target can help your organisation take early action to understand and comply with the CRC or future climate change legislation and to achieve a reduced carbon footprint and improved envrionmental image. If you would like to speak to one of our consultants about the CRC and other environmental legislation please don't hesitate to contact us.