UK Cap and Trade Leaves Consumers With Nothing

Posted on 26. May, 2009 by Ross in Government Policy, United Kingdom

Whilst US taxpayers have a massive cap and trade windfall to smile about, UK consumers are largely unaware that they will be left with nothing from the Carbon Reduction Commitment: the UK equivalent to cap-and-trade from which around half the companies involved will actually profit.

Last week, carbon market analysis firm Point Carbon released a report which found that American consumers would profit from the imminent US cap-and-trade bill to the tune of $747 billion between 2012 and 2030. Amongst the targets for redistribution of America’s new carbon tax were direct relief schemes for low-income households, protection from heating oil price increases, and substantial aid for local power and gas companies which would benefit consumers indirectly. This demanded half of the projected $1.5 trillion which cap-and-trade is expected to cost US businesses.

Carbon Reduction Commitments

Compared to their counterparts across the pond, UK companies are extremely supportive of the British Government’s answer to cap-and-trade. It’s hardly surprising though: the Carbon Reduction Commitment (CRC) scheme is revenue-neutral, with many of the companies involved not just able to profit from the carbon trading aspect of the scheme, but because the funds generated from the scheme will be recycled directly back to the companies involved!

The scheme, due to start in April 2010, will involve around 5,000 businesses with UK operations and will cost an average of around