Councils to face green tax burden

Councils already struggling to balance their books across the region are now having to plan how they will pay for fines they could be landed with if green targets are not reached.

For many, street lighting, is a major source of emissions and as reported in the Yorkshire Post on Saturday some authorities across Yorkshire are looking at whether switching off lights at night or dimming them will help make savings to current budgets and in some cases ensure they can continue to provide services in future.

Critics of the Carbon Reduction Commitment (CRC) in its current form have argued it penalises councils and others for the CO2 they emit, rather than rewarding them for taking positive steps to reduce energy consumption.

The Government has recently announced a review of the CRC and last night the Local Government Association (LGA) welcomed the move saying it hoped an opportunity would be seized to ensure the CRC was used as a positive way to reward success.

A report prepared for members of North Yorkshire County Council, where a programme to switch off lights at night has been backed, earlier warned that the Government: “has stated that it intends to impose a fine on organisations that fail to implement carbon reduction measures” and said the introduction of a carbon tax means it will become liable for £130,000 tax each year.

It added: “There are increasing pressures on local authorities to make savings in energy consumption and service costs.

“The county council has a target to reduce its carbon footprint by 20 per cent by 2015 and the current budget position has forced us to look closely at how we make best use of our resources to maintain those services that the public value most.”

The CRC is a mandatory scheme covering large business and public sector organisation, who produce 12 per cent of UK carbon emissions.

When it was first touted, the green measure was due to make councils, businesses and other big energy users buy “allowances” at £12 for every tonne of carbon they emitted. The best performers would have received rebates if they slashed emissions.

But in 2010 the Government decided the scheme would now simply penalise organisations for the amount of carbon dioxide they produce.

Last night a spokesman for the LGA said: “Government last month announced it would be simplifying its Carbon Reduction Commitment. The LGA will be encouraging them to find a way of bringing the scheme back to a position where participants could be rewarded for reducing carbon, rather than simply paying.”

North Yorkshire County Council pays out around £1.5m in street lighting energy costs and produces over 10,500 tonnes of carbon emissions. In Kirklees, where a switch-off trial has been backed, street lighting generates more than 11,840 tonnes of CO2 a year.

A report, earlier considered by members of Kirklees Council’s cabinet, said of CRC charges: “This is currently £12 per tonne of CO2 emissions which costs the council about £140k per year for its street lighting. However this is set to increase to about £30 per tonne of CO2 by 2020, which will mean a cost of about £350k per year.

“This pattern of increasing costs is set against budgets cuts and austerity measures.”

Critics are also concerned the scheme is too complicated and caught up in red tape. It requires those taking part to report on and pay a tax on energy used, and ranks them in a performance league table.

The Government is currently carrying out a consultation on CRC following concerns from businesses the scheme involves too much red tape.