DEFRA Carbon Initiatives Break Ground

It seems that the British, like the rest of us, like their acronyms. This seems to be especially true when it comes to the thorny problem of climate change. DECC absorbed DEFRA and BERR to put forward a more consolidated front, but however you look at that, the British are certainly blazing a trail within this arena and have passed what is effectively the first legally binding legislation with teeth.

There has been a significant shift in the way of thinking as a consequence of the Carbon Reduction Commitment, born out of the Climate Change Act of 2008 and the result of a unified DEFRA carbon approach to the issue. The Commitment signifies an innovative approach to climate change and energy saving and the enactment of a number of “carbon budgets.”

It is likely that many will seek to mirror the effects of the British government’s novel approach, should the DEFRA carbon scheme be successful. The British government has worked with considerable speed, especially when you consider the traditional constraints of the European Union system.

In a new era, carbon will become a commodity and will have an established price per ton. The British government is at pains to point out that those who are forced to participate in the Carbon Reduction Commitment will enjoy a net financial benefit in this new arena. They maintain a significant incentive will now be available should an organization reduce its carbon emissions.

As the UK government is set to emphasize, benefits to participants in the DEFRA carbon scheme may amount to around $1 billion by the year 2020. Any revenues derived from the scheme will be neutral to the exchequer, the UK version of the Treasury Department. Revenues will be recycled to participants in this way.

While the government is ready to encourage and provide financial incentives, in a sense at least, it is not afraid to wield a stick in addition to dangling the carrot. Participants in the DEFRA carbon scheme known as the Carbon Reduction Commitment may face reputational harm if they are not able, for one reason or another, to perform well in terms of carbon reduction. A league table will be published for all to see and judge.

Around 20,000 organizations will be expected to participate in the CRC in one form or another, but only about 5,000 will be required to actively participate by documenting and measuring their carbon emission and by purchasing allowances from the government accordingly.

The UK has set considerable goals in the fight against climate change and global warming with the introduction of this sweeping legislation. Commencing in April of 2010, the goal is to reduce carbon equivalent emissions of at least 4MTCO2 per year within 10 years. This is a reduction of 26% of emissions compared to a 1990 baseline but only the start of a push to achieve huge reductions by the year 2050.

Daniel Stouffer has a lot of data about DEFRA carbon and how a visit to www.verisae.com can aid you.