Objectives of Group:
From the introduction of the Climate Act into UK legislation in November 2008, legally binding targets are now forcing the government to reduce UK green house gas emissions by at least 80% by 2050, and CO2 emissions by at least 32% by 2020, against 1990 baseline levels. These emissions reductions will have to come from all sectors, both private and public. A new independent body, the Committee on Climate Change, will be advising the Government on how best to achieve its emissions targets. Whether or not the UK's portion of international aviation and shipping emissions are to be included in the Act’s targets is still open to debate. But if not, the Government must explain why not to Parliament by 31st December 2012. The implication is that if aviation and shipping are not included in the emissions reductions targets all other industry sectors will need to reduce their emissions further to compensate for the shortfall. We doubt that this will be politically deliverable.
The Carbon Reduction Commitment (CRC) will be the key method by which the government will manipulate costs of emissions to force the market to hit the Climate Act targets. If you are one of the 20,000 businesses with half hourly meter readings you are likely to be affected by the CRC from next year, if only because you need to register. If your business used in excess of 6,000 MWh of electricity in 2008, you are likely to have financial obligations under the commitment. These thresholds will then be reduced progressively to extend the coverage of the CRC to increasing numbers of organisations, both public and private.
In addition, over the next two years all government supply chains will have to comply with central and local government Sustainable Procurement requirements, though these will be phased in depending on materiality of the environmental impact associated with the service or product supplied. Increasing concerns linking fossil fuel and other resource use, climate change and aviation’s growing environmental impacts are encouraging aviation and defence primes to ensure that their future success isn’t limited by the failure of the supply chain to adapt. Some primes are now openly advising that environmental performance, to a recognised standard such as ISO 14001:2004 is an advantage, if not yet a necessity. This provides valuable assurance that environmental risks are properly contained and that resource use is sustainable. Thus, environmental performance is becoming a valuable differentiator that goes beyond price and delivers competitive advantage for those able to demonstrate their ability to grasp these new opportunities.