Government Business

The public sector has a vital role to play not only in reducing carbon emissions but in showing others, such as the private sector and householders, how it can be done, and how successful and straightforward action can be. 
 
We all know that the need to take action on climate change is urgent. The UK is already leading the way by committing to cut greenhouse gas emissions by 80 per cent in 2050 and, critically, by 34 per cent by 2020 – just 11 years away. 
 
On the international stage, where Ed Miliband and I are working toward agreeing a global deal at the Copenhagen climate talks in December, the UK’s domestic record and action in cutting emissions matters. And that means that the UK’s public sector record in cutting emissions also matters.

Financial sense
The action taken by our public sector at home is not just important for a global climate deal and protecting our planet. It makes financial sense too. All organisations that are facing squeezed budgets need to be smarter about the energy they use, not just because this can cut emissions, but because it can also cut energy bills. 
 
The public sector can play an important part in building a low carbon Britain in three key ways:

First of all, public sector organisations can lead by example on their own estate, whether in government departments, or in schools or hospitals. It can show people what it means to work in a modern, green office. I am proud of the enthusiasm of public servants to take meaningful action to reduce waste and tackle climate change. 
 
Secondly, the public sector can use its purchasing power to create markets for energy efficient products and services, helping to pioneer new technology. 
 
And thirdly, it can influence behaviour at a local and national level and empower people to take action in their own homes, businesses and local communities.

Making a commitment
The groundbreaking Carbon Reduction Commitment (CRC) targets carbon dioxide emissions not covered by existing government regulation and will help provide an incentive for large public and private sector organisations to record and reduce their energy use. 
 
All public sector organisations, including hospitals and local authorities that have at least one settled half-hourly meter, and consume more than 6,000MWh of electricity through half-hourly meters in 2008 (equivalent to an annual electricity bill in the region of £500k), will qualify for the CRC. All central government departments will automatically participate, whether they meet the qualification criteria or not.
 
Mandatory Half Hourly Meters (HHM) are required in accordance with the Balancing and Settlement Code where a site’s average peak electricity demand exceeded 100kW in three out of the previous 12 months.

Carbon allowance
The scheme will begin in April next year, starting with a three year introductory phase. Organisations will have to report their carbon emissions to the Environment Agency, which administers the scheme, and they will have to purchase allowances for every tonne of CO2 they produce. The first allowances will go on sale in 2011 and all the revenue from the sale of allowances will be recycled back to participants, six months after government’s allowance sale. 
 
There will be a bonus/penalty element based on emissions performance and the organisation’s relative position in the scheme’s performance league table. It is the league table that will provide the ultimate incentive for good performance as organisations will be able to see their relative performance against similar organisations. Hopefully this will spark some healthy competition to be the greenest and most efficient, but I also expect the public sector to work together to embed energy efficiency across the country.
 
Not only does this scheme cover ten per cent of the UK’s emissions, but it has the potential to reach a much wider area, as people who visit hospitals, schools or police stations will see for themselves that responsible energy use is the norm. 

Creative solutions
In the beginning, for many organisations, this scheme won’t be about complex low carbon technology, but simply about making sure that lights are not left on all night, that new electrical equipment meets energy efficiency standards and that people are aware of the energy they use. However, I am looking forward to seeing the innovative and imaginative solutions people will employ to reduce their carbon emissions, such as intelligent heating and lighting systems.
 
In my department, for example, staff now use laptop computers instead of desktop computers. Not only are modern laptops much more energy efficient, they can also enable staff to work from home or “hot desk” which leads to even greater efficiency savings and can transform the way we work, improving flexibility and diversity. 
 
The CRC is a mandatory scheme and all large organisations need to find out whether they qualify. Anyone can register for updates [www.defra.gov.uk/carbonreduction] or can visit our website [www.decc.gov.uk/en/content/cms/what_we_do/lc_uk/crc/crc.aspx] to see our helpful user guide. 
 
Next month we will be launching a scheme which will offer support for the public sector to procure energy efficient technology.
 
In these difficult times it would be too easy to delay action to reduce carbon emissions, but now is not the time to row back. By reducing energy use we can save money as well as saving energy, and be less vulnerable to changes in energy prices. We estimate that the CRC will save the sector £1billion while at the same time reducing carbon emissions by at least four million tonnes of CO2 per year by 2020. So I encourage everyone to start preparing for CRC and start taking action now.