Could Carbon Rules Endanger The UK ‘s Green Plan?

At the meeting, junior environment minister Dan Norris promised to “take BT’s comment on board”, but those involved in creating the accounting rules seemed unlikely to move, explaining that BT’s complaint went against accounting precision.

The use of low-carbon sources in electricity can only be taken into account once, experts said. So if the generator has claimed the credit, consumers should treat electricity as grid-average. This sort of move has made BT’s wind project and uneconomic, and wiped away much of its efforts to reduce its carbon footprint.

“Accuracy has led to collateral damage on motivation,” said Lois Guthrie, technical director to the Carbon Disclosure Project, and secretary of the Climate Disclosure Standards Board, a body working to create world standards for carbon reporting.

There are several difficulties with carbon reporting, which must be accurate and standard enough to allow firms to be compared, and yet be easy enough to fulfil so firms will be able to take part in it.

It has to handle emissions produced directly by the companies (known as Scope 1) along with emissions produced to generate the electricity they use (Scope 2) and emissions produced by suppliers and customers in their ecosystem (Scope 3).

Building a common system

“If all the world’s tax systems can interconnect, then all the world’s carbon accounting systems can interconnect,” said Guthrie. “The big four accounting firms have all given input and we are at an early enough stage to co-create the principles and avoid fragmentation. We need a common language, with clarity and rigour.”

Despite the difficulties, those involved hope to get reliable carbon accounting agreed before the international Climate Change summit in December: “We want international agreement in time for Copenhagen,” said Peter Young, chairman of the Aldersgate Group, a coalition of companies and environmental groups that set up the meeting.

“A low carbon economy is not just a sideshow – and carbon reporting is at the heart of it,” said Young. There are difficult questions, but our aim is simple. The UK can lead the way, and there is an opportunity for competitive advantage and green jobs.”

Other initiatives

Other government initiatives include up to £6m to start a ‘smart grid’, £11 million for regional efforts, and a new Office for Renewable Energy Deployment in the Department of Energy and Climate Change.

The Department for Energy and Climate Change has published a Low Carbon Transition Plan (PDF), and the Department for Transport has published Low Carbon Transport: A Greener Future (PDF) as well as an impact assessment of the carbon transition strategy.