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Is this the end for CRC, as we know it?

Posted by malcolm on Wednesday, December 1st, 2010 at 13:03

Guest article by Dan Lowe, UKSolutions, a LINX member

November has been a month of snow, US government WikiLeaks, royal wedding announcements and the launch of a formal consultation to gain the initial views on how to simplify the Carbon Reduction Commitment (CRC).daniel_lowe_uksolutions_mdThis formal consultation has raised concerns over the stability of the scheme and whether it will, in fact stand the test of time. As the founder and managing director of one of the UK’s private leading datacentres, UKSolutions, I believe that the CRC may be for the chop as with so many other former government initiatives. Since the launch of the CRC initiative on the 1st of April, very little has actually happened. The CRC has caused much confusion amongst UK businesses and more recently, this confusion has taken the form of anger towards the coalition government’s decision to retain revenue generated from the sale of allowances – effectively seen as a bottom line tax on growth. To many UK businesses, the CRC appears to be yet another tax, with no discernable benefits to the environment. Furthermore, the fact that the CRC is aimed at large organisations employing thousands of people, in many cases government departments themselves seems ironic, one might say. The recent news of a consultation process emphasises the concerns surrounding the initiative and indicates that alarm bells are clearly ringing in the government. As it stands, the CRC will not succeed as a solution in reducing the UK’s carbon footprint and these flaws need to be addressed before simply putting into effect a fruitless scheme, with the potential to damage a number of UK businesses, in what is still an economically fragile time. Although the CRC is now not expected to precipitate a return to the Stone Age or significantly affect UK datacentre companies, experts do believe that it has the very real potential to threaten growth and innovation in the datacentre industry, especially within the managed service field – the looming ‘tax on the Cloud’. Based on initial cap-and-trade estimates, the cost of the CRC will only add between five and 7.5 percent to the cost of operating a UK datacentre. However, this will undoubtedly impact the competitiveness of UK datacentres. We should be careful not to pigeon hole the CRC - this is not to say that the CRC has no place in the market; on the contrary, of course there is a place for it. However, in order to manage the UK’s carbon production issues there are a number of key factors that need to be addressed in order for both the industry, and the UK to prosper both financially and environmentally from the CRC.

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