Renew On Line (UK) 34

Extracts from the November-December 2001 edition of Renew
These extracts only represent about 25% of it

10. New UK green programmes

Green tech tax relief

UK companies that adopt government-approved environmental technologies will become eligible for investment tax relief. The Treasury has launched a consultation paper, asking for views on which environmental objectives and specific technologies should be included in the scheme. The initiative will operate in a similar manner to an existing programme of incentives encouraging uptake of energy efficient technology. Areas for tax breaks could be investments that reduce companies’ impacts on climate change, air quality, water quality and use, waste, land use or toxicity. The ministry also announced further development in its parallel “green fuels challenge,” inviting more proposals for pilot schemes for greener transport fuels aimed at assessing the feasibility of using fuels such as hydrogen, methanol, bioethanol and biogas. See our Feature.

http://www.hm-treasury.gov.uk/press/2001/p89_01.html

UK Emissions Trading Scheme

British firms could become world leaders in the new market for trading greenhouse gas emissions under a £215m government scheme launched by DEFRA. They claim that the new UK Emissions Trading Scheme could cut up to 2m tonnes of carbon a year from the atmosphere by 2010 and generate new job and investment opportunities for industry.

Emissions trading allow a group of companies to achieve a target for reducing greenhouse gas emissions flexibly and cost effectively. Under the scheme participants sign up to delivering emission reduction targets which can either be made by cuts in-house or by buying and selling emission ‘allowances’ on the market to meet those targets. If firms can reduce emissions cheaply and beat their targets, they can sell the surplus allowances or bank them for future use.

The government has pledged up to £215m over five years from 2003-04 to provide incentive payments for companies to join the scheme. This will be allocated through an auction next year. However, there were problems with the UK’s green certificate trading plans following an application by Electricité de France (EdF) to have its cross-channel imports classified as hydro rather than nuclear. The proposal could flood the UK’s green certificate market. EdF owns London Electricity and also SWEB, so it seems reasonable for it to be able to get credit for its own ‘electron vertes’. But cross national boundary trading clearly is the weakpoint of the trading approach as developed so far: see our carbon trading report later.

On EdF see: www.endsreport.com/issue/article.cfm?ArticleID=7776

New UK Efficiency Standards

Electricity and gas suppliers will have to meet challenging new energy savings targets and improve domestic energy efficiency under proposals for the new Energy Efficiency Commitment 2002 - 2005. The EEC will place an obligation on energy suppliers to promote improvements in energy efficiency by domestic consumers, and will replace the Energy Efficiency Standards of Performance (EESoP). According the DEFRA, the EEC will make a significant contribution to carbon savings in the domestic sector and will also help the Government achieve its commitment to alleviate fuel poverty among vulnerable households by requiring suppliers to focus at least 50% of energy benefits on lower income consumers. On average, it estimates,where consumers take up the energy savings offer they could save £10 a year on their gas and electricity bill and for lower income consumers this saving - in terms of lower energy bills or increased comfort - would be greater.

Carbon Wonks

A new Green Alliance report ‘Institutional design for a low-carbon economy’, argues for new institutional structures that would enable ‘the development of a more effective and co-ordinated low-carbon policy making and implementation in the UK’. These include a new low-carbon policy unit within the Cabinet Office; a low carbon Ministerial Committee; low-carbon policy networks to help join up different parts of government and non governmental actors; and low-carbon policy portals, which would act as one stop shops for key client groups, including households, general business, low-carbon businesses and local authorities. The report also called for new partnerships with the business sector.