How CRC should be the starting point for tackling climate change locally

April 1, 2010

Luke Hildyard
New Start

The CRC energy efficiency scheme (formerly the carbon reduction commitment), which comes into effect on April 1st, represents a considerable administrative, financial and reputational burden for local authorities. However, research from the New Local Government Network (NLGN) is analysing how the initiative could also provide councils with the impetus they need to take a lead role in the effort to tackle climate change.

The scheme requires organisations using more than 6000MWh of electricity, including local authorities and other public bodies, to record their energy usage and purchase an allowance, initially priced at £12 for every tonne of carbon they emit. All revenue will be recycled back to participating organisations but with a bonus/penalty adjustment taking into account how successfully organisations have reduced their emissions. From 2013 there will be a limit on the total number of allowances available, with permits sold via auction and then traded between participants.

By encouraging energy efficiency the CRC aims to cut carbon emissions, but also to further incentivise the existing financial benefits of reducing utility bills. This is of particular relevance to local government at a time of heightened fiscal authority.

Understandably, there are worries about how successfully councils are likely to be able to comply with such a complex arrangement. A survey for the Carbon Trust Standard in November suggested that just 1% of authorities considered themselves ready for the CRC to start.

With their diverse portfolio of properties, and the challenges of engaging with partner agencies such as schools (whose emissions are attributed to local government under the scheme), it will also be more complex for authorities to audit their carbon than for banks or supermarkets whose estates are more uniform. This could result in the embarrassing situation of public money from councils being channelled to private companies like Tesco or HSBC via the bonus/penalty system.

Thus, it is imperative that local authorities implement the joined-up working across schools and other council departments including facilities, environmental services and the financial and legal teams that will enable them to audit their carbon swiftly and accurately, then put in place the necessary measures to reduce it.

In doing so, and thereby developing a body of expertise that could be used to facilitate wider energy savings across their community, councils would be creating the potential to play a far more significant role in climate change mitigation. New opportunities could include providing support, advice and skills to other public sector partners and major businesses; and stimulating new markets for green products and services on which their local communities could draw.

Because the most effective energy saving measures are often small scale, such as microgeneration or more energy efficient buildings, it makes sense that these initiatives are co-ordinated at a local level that takes into account the nuances of, for example, local housing stock or energy needs.

Cutting emissions from homes represents nearly a third of the planned reductions necessary to meet the UK’s 2020 target as outlined in the 2008 climate change act. If local authorities can use the experience of making their own buildings more energy efficient to replicate the exercise throughout their area, then the CRC could become less of a regulatory chore than a key milestone on the path to a greener future.


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