| SPOTLIGHT |
The government’s controversial decision not to proceed with revenue recycling in the CRC Energy Efficiency Scheme was “a difficult one, taken against a background of unprecedented pressure on the public finances”, the Energy Secretary has admitted as he launched a consultation on delaying the second phase of the scheme.
Speaking at a CBI event, Chris Huhne said: “We had to focus on getting the best value for money – and sending a clear price signal to participants. Given a blank slate, we would do things a little differently.”
The minister gave assurances that the Department of Energy and Climate Change would engage with stakeholders to make the scheme work better for participants and government.
The decision not to continue with revenue recycling – which would have seen the profit from carbon sales returned to those businesses and public sector organisations that reduced their carbon the most – was first announced in the Comprehensive Spending Review.
The Treasury’s decision to keep the proceeds was immediately dubbed a £1bn “green tax”, with the Local Government Information Unit predicting that the change would cost unitary authorities £1m a year and metropolitan councils £600,000 in 2012.
The revisions to the scheme covered in the consultation paper include proposals to extend the introductory phase, postpone the start of phase II and subsequent phases and align the treatment of footprint years.
Delaying phase II of the scheme – where carbon emissions are to be traded – by two years means that participants will not need to register for that phase until 2013.
The postponements will provide “a suitable window” in which the government can consult on options for simplifying the scheme.
The Secretary of State also announced that the government was proposing to exempt more than 12,000 information declarers from the scheme.
Information on the consultation can be downloaded here. The deadline for responses is 17 December 2010.
