Selling Hot Air part two

The Carbon Reduction Commitment (CRC) is something we're going to hear more about in the next few months. Unlike the EU trading system, which for most people is off their radar, the CRC is carbon trading coming closer to home.

From next year, any large organisation in the UK will now have to measure their carbon emissions for energy use and from 2011 they will have to buy carbon allowances (permits) at £12 a tonne of CO2. By large organisation, we're looking at companies that have a turnover of over £50million a year. Under the EU trading scheme, it was very energy intensive companies involved, but the CRC includes supermarkets, car dealerships, commercial property owners, colleges, schools, hospitals and government buildings.

Whereas I was suggesting that the EU trading system has a price floor, the CRC has one and prices cannot fall below £12/tonne. In addition, there is a league table of all companies involved - the less CO2 you emit the higher your league position. This last bit of legislation is very clever: companies might be tempted to pay the cost of pollution by buying carbon allowances, but now they have to consider the impact on their brand if they have a low league table ranking.

Gradually, the UK is carbonising its decision making. If you're a school and you want IT equipment, the person in charge of the budget will need to know what is the carbon impact. Less impact means less cash needed to buy carbon, or more income from selling surplus allowances to carbon hungry businesses. Building a new supermarket will need require calculations on how much future energy it will use to appraise the extra costs of buying carbon allowances. If a school is switching to low carbon IT equipment, then providers will need to go greener themselves; if Tesco are building a green supermarket (and, before you laugh, they are actually doing this!) they will need green architects, builders and so forth. Low carbon decision making will be forced on smaller firms whether they like it or not. The smart ones will be ahead of the game and gain extra business.

The CRC, if it has a successful launch, is likely to be replicated across the EU and the US. The green revolution is starting...Just one question, when is the government going to tackle the elephant in the room? Who will dare to touch transport?