New U.K. Emissions Scheme Won't Deliver Reductions for Years

New U.K. Emissions Scheme Won't Deliver Reductions for Years

More than 5,000 private and public organizations will get swept into the United Kingdom's Carbon Reduction Commitment in 2010, but experts warn the program probably won't deliver emissions reductions until after 2013.

About 80 percent of the organizations, which include universities, retailers and hospitals, won't cut emissions at all, and as many as 10 percent will struggle with compliance, according to research firm Verdantix.

"The Carbon Reduction Commitment (CRC) begins life as a no-cap, no-trade scheme," David Metcalfe, Verdantix director, said in a statement. "In phase one, from 2010 to 2013, organizations included in the CRC need a robust management system to ensure they submit emissions data on time and buy sufficient CRC allowances. Failure to comply will be very costly. But the sticks and carrots in phase one won't incentivize deep carbon reductions or trigger active carbon trading."

In its report, "Best Practices for the Carbon Reduction Commitment," Verdantix predicts that only some government departments and large blue-chip firms will make emissions cuts during the first phase.

Many organizations will grapple with collecting accurate energy use data. Those that fail to turn in data face stiff fines. Meanwhile, the depressed economy will lead to smaller energy use baselines because many organizations will cut back on spending; The low baselines mean future reductions will be harder to deliver.

To help organizations navigate the CRC, Verdantix created a set of best practices based on its research and interviews with industry experts. Some of the advice includes:

- Make carbon management mandatory: Organizations should come up with a strategy to collect data from fleets, business travel and international emissions.

- Create an action plan before April 2009, when emissions measurement begins.

- Budget for growing costs: such as data management, set-up, etc.

- Prepare for a tough regime from 2013: If no reductions are achieved during the first phase, the U.K.'s Department for Environment, Food and Rural Affairs could impose a much smaller cap on the scheme.

The report is available for purchase for about US$275.