19/11/10

By Claire West

A formal consultation has been launched to gain initial views on how to simplify the Carbon Reduction Commitment (CRC), raising concerns over the stability of the scheme and whether it will stand the test of time. Daniel Lowe, founder and managing director of one of the UK’s private leading datacentres, UKSolutions, believes that the CRC may be on its way out.

Daniel commented: “Since the launch of the CRC initiative on the 1st of April, very little has actually happened. The CRC has caused much confusion amongst UK businesses and latterly that confusion has moved to anger towards the coalition government’s decision to retain revenue generated from the sale of allowances — seen as a bottom line tax on growth. To many UK businesses, the CRC appears to be yet another tax, with no discernable benefit to the environment.”

Daniel added: “Furthermore, you could argue that the government has finally joined the dots on who the affected organisations will be, the fact that the CRC is aimed at large organisations employing thousands of people and in many cases these are government departments themselves —ironic, one might say.”

“The recent news of a consultation process emphasises the concerns surrounding the initiative and indicates that alarm bells are clearly ringing in the government. As it stands, the CRC will not succeed as a solution in reducing the UK’s carbon footprint and these flaws need to be addressed before simply putting into effect a fruitless scheme, which could potentially damage a number of UK businesses in what is still an economically difficult time,” Daniel continued.

Although the CRC is now not expected to significantly affect UK datacentre companies, datacentre experts believe that it will threaten growth and innovation in the datacentre industry especially in the managed service field — the looming ‘tax on the Cloud’.”

“Based on initial cap-and-trade estimates, the cost of the CRC will add between five and 7.5 percent to the cost of operating a UK datacentre. This will undoubtedly impact the competitiveness of UK datacentres; although not the return to ‘mud huts’ proposed by some industry pundits. This is not to say that the CRC has no place in the market, of course there is a requirement to manage the UK’s carbon production, however, a number of issues need to be addressed in order for both the industry and the UK to prosper both financially and environmentally,” Daniel concluded.