UK Energy Efficiency Scheme

Please note: The content of this article is in the process of being updated to reflect the latest CRC scheme design. Updated content will be posted shortly. The Department of Energy and Climate Change (DECC) website contains complete details on program requirements and design.

Will an Energy Efficiency Scheme Work in the US?

The United Kingdom is one of America's closest trading partners and there are many similarities between the ways that both countries do business and trade. Consequently there is a lot of interest being shown in the UK's new CRC Energy efficiency scheme, just about to get underway. The British Parliament acted quickly to focus the attention of the country on the need for action, with a new scheme designed to make a significant difference to the total amount of greenhouse gas emissions.

The CRC energy efficiency scheme is shortly due to open its doors and the 5000 or so organizations in the UK affected are getting ready to register. From the spring of 2010, these companies must record their energy use for the next 12 months and this figure will be used to calculate the amount of carbon emissions they are responsible for. When this figure is calculated, each company will then be required to buy the rights to make further emissions at the initial rate of 12 per ton.

All eyes are on the U.S. Senate to see if they will help to pass legislation dictating that an energy efficiency scheme be deployed among businesses nationwide.

If an energy efficiency scheme such as the program now in place in the UK would work in that country, why not in the US? Indeed, the House of Representatives have already converted the Waxman -- Markey Bill to the American Clean Energy and Security Act. Within the Act there are provisions for a cap and trade scheme, broadly along the lines of the UK version. Does this signify that the US is next? This remains to be seen, as the historically recalcitrant Senate is next to consider these options.

Will the US Senate, appointed guardians of the US legislature, allow a cap and trade-based energy efficiency scheme to be written into law by Pres. Obama? This is a major question facing the country during 2010. It appears that the bruising the legislature suffered during the passage of the recent health legislation will have an impact. 2010 happens to be an election-year for Senators and many of them are not willing to be more controversial.

Controversy Blurs the ACES Act

Could it be that individual agendas doom the passage of an energy efficiency scheme in the US anytime soon? This appears to be a strong possibility as many Democratic Senators warily eye their seats in the upcoming 2010 elections. As Republicans almost unanimously reject the idea of an energy efficiency scheme in the US, Democrats worry that if they pushed through the existing ACES Act, associated controversy would be self damaging.

An energy efficiency scheme linked to a cap and trade program has not been actively pursued in the USA before. While the Chicago Climate Exchange operates a voluntary scheme, this is on a much different level and there is no precedent otherwise. Critics advocate that too much pressure would be put on organizations affected and that overall, the introduction of an energy efficiency scheme of this type would put the US at the trading disadvantage, globally.

US Pressured to Expedite the Energy Efficiency Scheme

The overall, global battle against climate change is reaching a critical phase according to most environmentalists and scientists. There seemed to be little good news to bring out of the Copenhagen summit and individual territorial agendas appeared to take precedence. As the US is one of the largest contributors to the problem, there will be much pressure within the Senate to progress the energy efficiency scheme currently under question.

Voluntary efforts will be far from enough to try and reverse the adverse effects of global warming. If a cap and trade-based energy efficiency scheme is not passed by the US legislature, many eyes will then turn to the Environmental Protection Agency to see if their recent findings, that carbon emissions are a health hazard, will lead to mandatory restrictions.

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