I think the energy and climate department (DECC) is wasting its time trying to simplify the CRC. There’s no doubt the scheme is extremely complicated, and I’ve every sympathy with energy managers who’ve had to get to grips with it.
But surely its complexity is an inevitable result of trying to create a sophisticated mechanism to encourage energy efficiency among a variety of organisations without putting an undue cost burden on them. At least, that was the idea until last month’s spending review when the Treasury ripped the guts out of it by turning it into a carbon tax.
Now DECC is consulting on ways of reforming the CRC. Speaking at a recent ENDS conference, Jane Dennett-Thorpe, head of CRC policy at DECC, outlined some areas for simplification. These include the complex rules governing how different types of organisation, such as subsidiaries, joint ventures and private finance initiatives, are caught by the CRC. Other areas include the supply and metering rules. These have caused the most headaches for registrants calling the Environment Agency’s CRC helpline.
I suspect this is just tinkering at the edges and will not deliver the sort of reform business wants. Indeed, making these intricate rules simpler risks making them simplistic and unfair to some CRC participants.
More fundamentally, Ms Dennett-Thorpe said DECC is considering the Committee on Climate Change’s suggestion of scrapping cap and trade and moving to straight sales of fixed price allowances. In which case, what’s the point of the CRC?
The only certainty is that the reform creates another year or two of regulatory uncertainty, the thing business hates the most.