11 December 2009 | Rebecca Ellinor
Too few organisations are prepared for an emissions trading scheme that starts next year, a sustainable procurement expert has said.
The UK government will introduce the Carbon Reduction Commitment (CRC) in April as part of its efforts to cut greenhouse gas emissions by 1.2 million tonnes of carbon a year by 2020.
Energy and climate change minister Joan Ruddock estimates about 5,000 private and public sector organisations with an annual energy spend greater than £500,000 will be obligated to take part in the scheme. It involves monitoring and recording emissions use and buying permits to release CO2 emissions.
But in an interview for SM on procurement’s role in climate change to be published in January, Shaun McCarthy, director of Action Sustainability and chair of the Commission for a Sustainable London 2012, said he believes many organisations are not ready for the introduction of the scheme and a lot do not even realise it will apply to them.
“I think [the government has] made a bit of a dog’s breakfast of the way it has communicated this to the businesses who will be affected,” he said.
Permits will initially cost £12 per tonne of CO2. After 2012 their price will be determined by auction. There will be a league table ranking participants according to performance. The Environment Agency will administer the scheme.
Many purchasers who are familiar with the CRC do not consider the amount their organisations will have to pay for emissions to be onerous, nor do they think they are likely to be affected by new, more stringent CO2 targets as a result of the United Nations Climate Change Conference in Copenhagen this month.
But Chris Bowden, chief executive of energy procurement consultancy Utilyx, advised buyers to be cautious. “Whether or not they reach an agreement at Copenhagen doesn’t really matter. Eventually there will be an agreement – it will just take time. In any case we already have significant regulatory pressure in the UK.
“There is no guarantee that because carbon prices are cheap now, they will stay cheap.”