When the information packs subsequently arrive, organisations will need to determine whether they fall under the provisions of the regulations and then submit data on their energy use. For some, the recent extension of the deadline for submission to 2011 will be a relief; for others it may provide some breathing space but will not deter them from reducing their energy use regardless of the CRC.
Whatever the impact of the extension, clearly some work still needs to be done making firms aware of these regulations. Awareness of the demands and implications of the scheme seems to range from extensive to patchy depending on who you ask - but it’s often thus with green legislation.
For those who don’t know, the CRC will apply to those organisations with a minimum electricity consumption of 6,000 MWh. Those that do qualify will be required to buy allowances to cover their total carbon emissions for each year – one allowance per tonne of CO2 is set at an initial price of £12. The revenue raised from selling allowances will be 'recycled' back to participants according to the progress they make in reducing emissions.
A league table will be published detailing the best and worst performers in terms of reductions. Those at the top will receive a bonus payment; those at the bottom will face a penalty. The hope is that this will provide the incentive for organisations to improve their energy efficiency.
A clear business case
The Environment Agency has high hopes for the scheme and, at the beginning of November, declared that it believed the scheme could slash energy bills and cut carbon emissions by 50% more than it had anticipated.
The reason for this may be very simple. There is a strong business incentive to meet the legislation regardless of the carrot or stick of government action. Many organisations are already well ahead of legislation when it comes to meeting environmental targets, not least because there is a very strong business case for reducing energy use. Our own recent survey found that well over half of facilities managers think the main driver of improved energy efficiency is not to meet government rules and regulations but to cut carbon emissions, which in turn will save money.
The postponement of the CRC deadline and greater awareness of its demands and implications may be important factors in its implementation, but many organisations are already making progress in this area and will maintain their own momentum in cutting emissions and energy use.
Green by-product of an economy in the red
This is certainly one aspect of the wider economy that has been defined and encouraged by the recent downturn. A report called ‘Behind the Green Facade’, which appeared earlier in the year from law firm Taylor Wessing, found that levels of employment in the sustainable development sector have continued to rise regardless of the recession and that the people who work in this sector overwhelmingly believe the UK already possesses the technology, resources and skills to drive the sustainability agenda forward.
Most of the people surveyed also believed that cost is not the biggest obstacle to sustainable buildings. Around nine out of ten end users believe that a typical organisation would be willing to pay more rent in order to secure a long-term sustainable building.
That result can only come about because these organisations are looking beyond short-term cost savings on rent towards longer term developments that cut energy use and reduce the carbon footprint of their business.
One of the most interesting aspects of the economic downturn has been the amount of time people have spent looking beyond it. Past experience tells us – or should tell us – that adversity in the economy sparks both a renewed focus on property and a great deal of innovation in response from the professions involved in the design and management of buildings. Certainly, the development of the facilities management profession has largely been characterised by what evolutionary scientists would term punctuated equilibrium: ongoing steady development interspersed with periods of innovation in response to rapidly changing conditions.
Already the wider economy has seen a great deal of focus on cutting cost. The most obvious manifestation of this is the shedding of jobs, which is at least quick and relatively easy. But after people, the second highest expense for most organisations is property. The challenge now is to use the renewed focus on this particular resource as the driver for change - to become a discipline that sees itself and is seen by others as strategic, progressive and value-adding.
The good news is that this process is already well under way. Preparations for the CRC and the business drive towards greener buildings prove it.
Neil Harrison is Customer Marketing Manager at RS Components.