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UK Climate Strategy Climate Changes: Is It Enough?

The Climate Change Levy has been recognised by many as an incentive to look at energy usage and reduce it, and it has certainly focussed minds at boardroom level. As a result of the Levy negotiations we have organised many site visits to inform the talks and from those visits industry and Government has learnt that:

* Some companies have effective monitoring systems in place. But other companies do not and they need to build up a much better picture of their energy usage. Climate neutral printing and glass processed with 100% sustainable energy.  since glass can withstand high temperatures, glass splashbacks are perfect to use behind ovens or grills. No other material is so easy to clean as glass.

* Such visits provide a greater understanding of some sectors’ energy usage and also help to identify gaps in energy management. They also show that performance does vary within and between companies despite the fact that the companies honestly believe they are doing, or have done, all they can; and

* Site visits help to list priorities for future action.

That process therefore has in turn has informed Sector Initiative Papers, action plans within the Energy Efficiency Best Practice Programme drawn up by trade bodies and the Programme jointly; and these include “no-cost” and “low-cost” measures that can be delivered immediately. But other measures may involve significant research, development and investment, and will therefore probably involve the new Carbon Trust.

For us, and for you, this will be a period of change. Best Practice for example has had a strong and valued tradition of providing general information. But this left you to implement it, and we are now moving to a position where the Best Practice programme is much more “hands on”.

Not surprisingly the sector plans are quite wide ranging as they cover a variety of organisations from the largest to quite small SMEs, who nevertheless use significant energy, and we will need to work closely in partnership with the Devolved Administrations in Scotland, Wales and Northern Ireland, and the Government Offices in England, to deliver and signpost both national and local services in line with the UK Climate Change Strategy, and our international obligations.

Some high priorities for both industry and Government this year are:

* Seminars to assist with target setting

* Site visits to further understand energy usage

* Cross sectoral technology training and

* General awareness raising for companies to understand energy usage.

In particular many sectors are wanting more site visits. We have been piloting site visits over the last couple of years, learning in the process many of the lessons I have already mentioned, and around 1,700 site visits should have been completed by the end of this financial year since the pilots started (including visits supporting the negotiations).

We expect to double the number of visits and double the number of consultants in the year ahead, and we have called this broad programme “Action Energy” for the time being because it is about keeping up the momentum. Continued support following a site visit is essential to ensure the reports are not left to gather dust. Packages of measures suited to an organisation’s particular needs will be delivered if necessary, but obviously we look to industry to do as much for themselves as possible, as they will benefit from the savings.

The value of the information gathered in site visits can not be overstated as, apart from helping the individual company, it will inform the shape of Best Practice (and the Carbon Trust’s agenda) in areas such as R&D, sectoral support, and CHP needs, and the more we are in tune with industry’s needs, the better we will be able to meet them.

130m [pounds sterling] Carbon Trust and a financial kick-start for emissions trading

The Chancellor’s Spending Review announcements on 18 July 2000 included a new Carbon Trust with a first year budget of 130million [pounds sterling] and a greenhouse gas incentive to kick-start carbon trading. This additional spending will help improve energy efficiency in business as part of a wider package of environmental expenditure.

The Carbon Trust is being set up this year to coordinate a new 130million [pounds sterling] programme to accelerate the take up by businesses of low carbon technologies, and the money available to businesses will rise to 170million [pounds sterling] in 2002.

This includes enhanced capital allowances on energy-efficient investment, and around 30million [pounds sterling] recycled from the Climate Change Levy for other measures. Around 20million [pounds sterling] is being spent on renewables by other government departments.

This additional expenditure is an integral part of the Climate Change Levy package, and the Truth will set up a joined-up programme including R&D, fiscal incentives, and advice to encourage businesses, especially SMEs, to implement energy efficiency measures.

The Trust will be run by a not-for-profit company limited by guarantee, but further decisions on its organisation, membership and management are still being taken.

The Government also announced a Greenhouse Gas Emissions Trading Incentive that signalled concrete backing for the early start of a UK emissions trading scheme, which enables companies to volunteer for challenging emissions reduction targets, delivering genuine environmental improvement.

Further details of the incentive will be announced in due course. It will be for a limited period only to kick-start the trading scheme and lever in the environmental and wider benefits this should provide. A trading scheme will enable organisations who can considerably reduce their energy and carbon use to earn `carbon credits’, which can be traded with those less able to make savings.

A temporary financial incentive, and an early opportunity to gain experience in emissions trading, could leave the UK well placed to influence international developments, as well as setting up UK business and the City to make the most of the opportunities presented by this new market.

Business and environment organisations have been consulted about the size and design of the incentive, and will be consulted about detailed arrangements.

International progress on action to tackle climate change, by reducing carbon use in energy, following the Kyoto summit was discussed at The Hague last November, and the Carbon Trust will serve as the focus for strategic and executive action to ensure business adapts successfully to the challenges presented by climate change.

In particular, it will help businesses make a full contribution to the UK’s Kyoto obligations and toward achieving domestic [CO.sub.2] obligations by 2010.

The Trust will be business-focused, maintaining competitiveness and preparing business for future climate change targets. It will take over elements of the Energy Efficiency Best Practice Programme and specifically address regional needs with more support for local partnerships and business networks stimulating local initiatives.

The Government recognises that carbon emissions trading is a key part of longer-term solutions to reduce greenhouse gas emissions, and similar developments are taking place in Europe and internationally.

But a range of instruments is necessary if organisations of all sizes, and from all sectors, are to contribute to improved energy efficiency and reduced greenhouse gas emissions.

The government therefore believes that tax, regulation, voluntary agreements and trading should be viewed as complementary, rather than alternative, approaches, and will be working to ensure that all the different possible measures form a consistent and coherent framework.

When Lord Marshall published his report on `Economic Instruments and the Business Use of Energy’ in November 1998, he recommended a business-led initiative to design a dry run pilot domestic trading scheme for greenhouse gas emissions.

Following on from this, the CBI and ACNE (Advisory Committee on Business and the Environment) set up the UK Emissions Trading Group (ETG) to take forward the design of a domestic trading scheme.

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