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I've been trawling through the Government's response to the consultation on Carbon Reduction Commitment (CRC) scheme. This will mean that firms that pay more than about £500,000 for energy a year will have to purchase allowances to a set Government cap and have to buy allowances beyond that. The idea is that 'polluting' companies will have to buy credits off 'clean' companies.
It's pretty dry stuff, naturally, and responses have been aggregated - we don't, unfortunately, know what the construction industry thinks about the cap-and-trade scheme, which will set carbon prices at £12 a tonne in the first year. But quite interesting is Question 24, which asks companies at what price they think carbon should be priced at. Given that these are big companies, for all their talk of the importance of reducing carbon emissions, 69% of 137 responses from them decided that the minimum, £8/tonne would be the best price, whereas only 15% plumped for the likely £12/tonne figure. Only 10% went for £16/tonne. This is despite the fact that the EU carbon trading scheme virtually collapsed due to low prices in its first period from 2005-2007. New results about carbon intensive industries' results are expected later today.
In fact, several have complained that the CRC will be a waste of time, including a British IPCC co-author who says it will have no effect. Indeed, based on the maths of a fellow reporter over at BusinessGreen, the maximum penalty for a company involved in the scheme would be about £4,000. It's hardly grounds for a dynamic new futures market ...
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