Carbon Reduction Commitment could heavily penalise public bodies that have little scope for further energy savings
Hospitals and local authorities could suffer “significant penalties” when the government's Carbon Reduction Commitment (CRC) takes effect in April 2010, an energy service consultant has warned.
The scheme is designed to reward organisations that cut their carbon emissions. But consultant McKinnon & Clarke said that the odds were stacked against certain groups that have already substantially cut energy consumption and have little freedom to reduce it further.
Energy and environmental manager Callum Stuart said: “Many public organisations such as hospitals and local authorities have already implemented robust energy-reducing measures, and little more can be achieved without impacting on performance or incurring prohibitive capital overheads.
“Unfortunately, the weighting mechanism used to take account of past performance may put less flexible public organisations at a disadvantage,” he added. “Private organisations will typically have more flexibility to rationalise their use for energy through consolidation and restructuring.”
The 5,000 or so UK businesses and public-sector organisations affected by the CRC will be scored and placed in a league table. Those that demonstrate the most success in cutting carbon emissions will receive bonuses. Those less successful will penalised.
It will be capped in year one at a 10% bonus, but will soar to 50% in year five.
“The reality is big organisations with a lot to gain will streak ahead,” Stuart said. “We fear that public-funded organisations will end up paying huge penalties imposed by the government. They will end up meeting the lion's share of the costs with knock-on implications for public services.”