Government to Earn Revenue by the CRC
The Carbon Reduction Commitment (CRC) scheme is expected to act as a carbon tax mechanism, as the Government expects to earn around £3.5B (US$5.5B) over the next four fiscal years.
In spite of recycling it to participants in the scheme, the Government has full plans to generate as much as possible from the scheme.
An initial consultation with the industry is very important, says John Alker, Director of policy and communications at the UK Green Business Council.
While he says that the decision of the Government has surprised him to the core, he also adds that this plan is likely to make the scheme simpler.
The debit raised by the labor Government was kept in mind, while making the decision, said Climate Minister Greg Barker.
This decision would lessen the exposure given to the progressive businesses, which often acted to bring about an improvement in energy efficiency. He also confessed that the changes which had been made, would result in an increase in the costs for businesses.
"Discrepancies between [the CRC] price of carbon and the price paid for carbon emissions covered by the EU Emissions Trading Scheme are likely to emerge, undermining the search for a consistent carbon price signal throughout the UK economy”, said Harry Manisty, environmental tax specialist at PwC.