Carbon Trust Cuts To Fund Green Investment Bank?

Posted on 29. Jun, 2010 by Ross in Government Policy, United Kingdom

According to the Sunday Times, the Carbon Trust is now facing the axe as part of efforts to fund the new green investment bank that successive governments have touted. Whilst green start-ups will be initially excited at the prospect of less red tape and quangos, businesses around the UK look set to lose a vital partner in their efforts to cut energy use and save money.

The Carbon Trust performs a variety of roles for the government. Numerous green entrepreneurs have received grants from the Carbon Trust to push forward with low-carbon technologies such as renewable energy and energy management software, whilst businesses could apply for interest-free loans for energy efficiency projects via the Carbon Trust’s Big Business Refit. The Carbon Trust has been promoting carbon labelling initiatives here in the UK and around the world, and has been a key player in promoting low-carbon business models into the corporate boardroom. The organisation is also vital to the first phase of the CRC Energy Efficiency scheme, being the guardian of the early action metric via it’s Carbon Trust Standard award.

However, the Carbon Trust’s investment arm is responsible for putting the organisation into the firing line. Applicants for funding have often complained of excessive bureaucracy within the Carbon Trust, and there is an obvious overlap between it’s agenda and those of the Technology Strategy Board and the Marine Renewable Deployment Fund.

With funding for the green investment bank needing to come through cuts (the previous Labour government had intended to finance it through asset sales, but these are now earmarked by the emergency budget for paying off the deficit), these funding bodies are obvious targets both to divert funding from and to grab expertise from as well. With the aim of the green investment bank being to fund national-scale infrastructure projects such as the smart grid, there would be little room left for all the other important functions that the Carbon Trust fulfils.

Initial instincts would suggest that the budget and the staff of the Carbon Trust’s investment arm would be cut from the organisation and go towards forming the new green investment bank, leaving the rest of the Carbon Trust to continue to cut carbon emissions through other means. However, the Conservative party fought their election campaign with promises to cut business support services like Business Link and the Regional Development Agencies, and the Department for Business, Innovation and Skills (BIS) saw the biggest budget cuts aimed at it after the election. With Liberal Democrat Vince Cable at the helm of the BIS ready to be the fall guy for cuts in business support, it would be easy for the Conservatives to see the Carbon Trust as yet another ‘needless’ business body ready for political pruning.

What the cut of the Carbon Trust would do the CRC Energy Efficiency Scheme would need urgent addressing. 50% of the early action metric is achieved by attaining the Carbon Trust Standard, and this year the early action metric will be responsible for 100% of the league table ranking points, with it still impacting the scheme until April 2013. Destruction of the Carbon Trust would scupper the process which thousands of companies are going through to limit their obligations and maximise their returns under the UK’s cap-and-trade scheme, leaving many businesses with wasted manpower and resources mid-way through the Standard achievement process.

If the Carbon Trust gets cut it will be small and medium-sized businesses which suffer most through a lack of support and finance, whilst the big companies which muscle in on big infrastructure will be laughing all the way to the (green investment) bank.

Image by Fotos_von_Carlos @ Flickr