Anne Williams shares her views on the current energy efficiency options facing UK Business….
There are several reasons for businesses to reduce their energy consumption and more particularly for the government to provide incentives and disincentives to help to convince businesses that is the case.
Firstly, consumption reduction goes directly to the bottom line, many companies expend an enormous amount of effort on their energy buying strategies without stopping to think that the surest way to reduce costs is to reduce consumption.
Secondly, consumption reduction reduces carbon emissions and that improves our world and also improves a company’s CSR status. Consumers look to use companies that have strong green credentials so being a leader in terms of efficiency efforts will give you marketing collateral. In addition, there are several taxes that have to be paid that can be reduced as a by-product and exemptions for some capital investment can be achieved.
Finally, the availability of fossil fuels is not infinite. They are a finite resource and the quicker we work our way through the less there will be, coupled with this the UK is now a gas importer long gone are the days when we could claim self-sufficiency from our North Sea treasures. We have a limited electricity generating resource and we must find alternative generating methods whilst reducing consumption to ensure that we have a secure supply of energy going forward.
None of this information is new. We have known all of this for a very long time and as a result successive Governments have developed various initiatives to ‘encourage’ businesses to reduce their carbon emissions and ‘go green’. The problem has been that there has been no single approach. There are price signals or taxes (CCL and CRC). Tax exemptions such as Climate Change Agreements and Enhanced Capital Allowances. Finally, there are audit and reporting schemes such as Energy Savings Opportunities Scheme, ESOS. The whole policy landscape has become untidy and complicated.
The current Government launched a review of the whole system at the summer budget and has issued a consultation paper which is aimed at businesses and asking what they consider to be the correct approach. The overall aim of the review is to simplify the number of initiatives and to reduce the cost of compliance to businesses and the consultation paper asks a number of questions about how the issue of carbon reduction and energy efficiency should be approached.
There are a number of questions but the fundamental question is how should businesses be encouraged to reduce their energy consumption? Do you believe it should be carrot or stick or a combination of the two? Should companies be forced to report their carbon emissions or would a tax serve to crystallize the minds of finance directors country wide?
The good news is that you can have your say now and full details of the consultation can be found at:
Should you wish to respond to this consultation then please reply to the Treasury at:
firstname.lastname@example.org, or alternatively send responses to Khalid Aly, Energy & Transport Tax, 1 Yellow, 1 Horse Guards Road, HM Treasury, SW1A 2HQ