Can Carbon Reduction Schemes Really Work?

Despite the considerable amount of airtime devoted to climate change and its potentially devastating consequences, we have been long on pledges and promises but rather short on solutions.

At our most recent debate at the House of Lords, GoodCorporation invited business leaders, government departments and NGOs to discuss the UK’s Carbon Reduction Commitment (CRC). Paul Clements-Hunt, Head of the UN Environment Programme Finance Initiative led the debate inviting delegates to comment on the effectiveness or otherwise of the CRC.

The debate raised a number of questions:

Is the CRC effective enough to gain the support of both business and the consumer?

Can it be sold to corporate Britain in an economic downturn?

Can league tables provide an accurate reflection of carbon reduction or are they misleading?

Is there a sufficient incentive to participate fully and is there enough credit for businesses that are successfully reducing their carbon footprint?

When the room was asked if current regulation would enable the UK to honour its carbon reduction commitment, the vote was split 50/50.  The room was also similarly divided when asked if UK businesses were taking the CRC seriously.

Two key problem areas were identified, the timing of the scheme and the communication of requirements.  Many felt that the start year was wrong, that because of the downturn, emissions will be lower anyway, creating a misleading baseline.

An element of gamesmanship appears to be going on with some suggestions that businesses were doing very little to make reductions now, saving all their efforts until required to do so by the Carbon Reduction Commitment in order to maximise the apparent scale of reduction and achieve a high league table position.

It was suggested that although the threat of climate change has been acknowledged, there is still a huge need to identify the steps that can be taken to address the problem.  Some businesses felt well informed, while others felt that the DECC needs to do more to communicate the requirements of the CRC.   Anomalies in the assessment of emissions were also discussed for example, a company that reduces business travel and switches to video conferencing will be penalised under the CRC, as the scheme only measures emissions within the business site and does not take external emissions such as transport and travel into consideration.

Some felt that the scheme is not tightly regulated and that there are insufficient penalties for non-compliance.  Others questioned the likely effectiveness of a countrywide scheme in tackling such a tangibly global problem and called for a worldwide solution to be developed and implemented. It was noted that international businesses could be caught out having to comply with multiple schemes in different markets at considerable cost.

Many felt that the CRC was a force for good, that the UK government should be applauded for leading the way in developing a viable scheme to encourage carbon reduction and thereby honouring its commitments.  It was agreed that the process of measurement was in itself a useful step to take on the road to reduction and that by embracing the CRC it would encourage businesses in a new way of thinking which would produce results.

Others were encouraged by the support for climate change solutions by figures such as Obama.  In some cases, this has led to sustainability becoming a board issue.

If CRC is successful and proves to be a viable tool for delivering carbon reduction, the UK will be leading the world in meeting reduction targets.  We should be maximising the help we give to businesses to follow the scheme in order to ensure its success.

GoodCorporation Business Ethics Debate July 2009