Policy Options to Encourage Energy Efficiency in the SME and Public Sectors
29 November 2006
By Daniel Radov et al. with contributions from Enviros Consulting
UK policy on climate change includes a range of measures targeting energy use and greenhouse gas emissions across a broad spectrum of the economy, including the domestic sector, businesses, the public sector, and transport. Aside from the Climate Change Levy (CCL), which applies to all but the smallest business users, many of the other key policies designed to reduce energy use and carbon emissions by business have focused on large, energy-intensive users. These additional policies, which include the Climate Change Agreements (CCA) and the UK implementation of the EU Emissions Trading Scheme (EU ETS), establish quantitative targets (in terms of energy use or emissions) for covered organizations.
To supplement these policies, the Government is now considering measures to encourage less energy-intensive sectors to accelerate their uptake of measures to improve energy efficiency and thereby reduce carbon emissions. One of the measures being considered is a new cap-and-trade scheme, dubbed the UK Energy Performance Commitment (EPC), which would target large organizations in the non-energy-intensive category.
In this context, the Government believes there may be further scope for a policy designed to reduce emissions from smaller, less energy-intensive organizations in both the business and public sectors. These organizations would include many Small- and Medium-Sized Enterprises (SMEs) and certain public sector organizations. In this report for the Department of Environment, Food and Rural Affairs, a team led by NERA Associate Director Daniel Radov identifies and analyzes potential additional policies to complement current policy frameworks. The report assesses possible policy options to achieve carbon saving for the target group that represents a gap left by current policies. The report evaluates a number of different emissions trading options as well as "softer" options such as benchmarking and advice programs.
