Carbon Emission in the UK - Report Example

Carbon Emission in the UK Name Institution Tutor Date Introduction There is an increasing scientific consensus that the mounting concentrations of carbon dioxide (Co2) emission is a major contributor of climate change. The level of damage that is linked to the carbon emission remains uncertain however the risk is that the damage could be huge and even catastrophic. Lowering this risk would need retraining the rise in CO2 emission and ultimately limiting the existing level of emission to a level that can stabilize in the atmosphere. This basically implies that the anthropogenic emissions have to finally reduce towards zero as the atmosphere and the ocean attain an equilibrium. Various initiatives have been adopted across the globe in order to reduce the level of carbon dioxide emission. What is eminent today is that CO2 emission is rising instead of reducing despite of the numerous actions adopted in order to reduce this menace. The debate on climate change in the UK is equally advanced through strong legal grounds for climate change, development of sophisticated institutional arrangement and ambitious targets to lower carbon emission (Fankhauser et al, 2009). Over the years, the UK has come up with various initiatives to manage carbon dioxide emission. This paper seeks to examine the current political and technological drivers that are linked to the mitigations of CO2 emission in the UK. The paper will focus on various key issues concerning Carbon management in the UK. The global Socio-economic and Environmental impact of Carbon Management (in the UK) The UK has adopted various approaches of carbon management. Some of the approaches include the use of policy which is aimed at reducing the level of carbon emission both in by the public and private sector and even in households. There is a strong correlation that exists between carbon management and costs saving. Dance, (2010) discloses that firms that have actively been involved in carbon management are experiencing a lot of benefits in terms of cost saving through avenues such as waste minimization, energy reduction, reducing fuel use and travel substitution. For instance government programmes such as the United Kingdom CRC Energy Efficiency Schemes which makes carbon reduction a mandatory action for companies, has made carbon reduction a reality in many companies. The implication is that companies have gained more avenues for carbon management. Interviews conducted on CEO disclosed that the companies were able to cut on their energy spending due to the use of alternative sources of energy. Another social- economic implications of carbon management is that the public may not be willing to pay for products that are development out of the low carbon management initiatives. For instance; the automobile industry has adopted initiatives of lowering the level of carbon for instance through the productions that do not emit carbon. The adoption of low carbon technology is basically a useful approach. Okereke (2007) however contends that such as approach is not very effective for the market. Surveys have in the recent years indicated that the automobile market continues to produce vehicles that have low emission, however only a few consumers are enthusiastic about paying the premium for the products that are environmental friendly. The adoption of such carbon management approaches are therefore bound to affect the automobile market in the even that consumers continue to decline. Marden and Gough, (2011) highlight that a key impact of carbon management programmes in the UK is that the consumer will eventually pay for program. There is a growing dependence on the mandated markets and the emissions trading approach. This basically implies that the burden of Cost of Mandated Programmes (CMPs) is incurred by the consumers and eventually on the households. According to DECC (2010) the increasing prices of fuel in addition to the implications of some of this measures has resulted to an estimated fuel bill of 70% from £694 in the year 2003 to £1200 in the year 2008. Estimates by the DECC further disclose that the domestic prices of gas will be 12% more than the prices of electricity which are estimated to be 40% by the year 2010. Some estimates indicate that carbon management initiatives are likely to affect consumers in terms of higher costs. One of the economic implication of carbon management in the UK is that the initiatives adopted are bound to affect the economic progress of the country. The UK climate change Act recommends that there should be a cut in the level of GHG by 80% to by the year 2050. The regulation also recommends that biding veiling of carbon emission for a period of five years. Such initiatives of carbon emission are indeed useful in attaining the objective of reducing the level of carbon emission. Dinan, (2008) argues that although carbon management aims at reducing the level of carbon emission, nonetheless, lowering the level of emission would also impose costs on the economy. This is due to the fact that many economic activities are usually based on fossil fuels which release carbon in the form of carbon dioxide when they are burnt are the major economic drivers, lowering carbon emission will therefore definitely affect the economic progress of the UK. It can therefore be stated that although carbon management is beneficial in terms of lowering emission levels nevertheless there are negative economic implications. Contemporary Issues in Carbon Management, particularly with respect to the economics of carbon accounting and financing The Issue of Carbon Disclosure / Reporting One of the big questions that faces organizations today is whether they should conduct carbon reporting. The increasing emphasis on climate change has resulted to the development of carbon accounting as a corporate tool that is aimed at integrating climate change considerations into main stream business practices. Similarly, carbon reporting is an areas has that attained significant academic attention. The concept of carbon reporting was devised by Bebbington and Larrinage (2008). The authors propagated that in addition to the standard reporting of the levels of carbon emission, the uncertainty and risk that are linked to climate change should be disclosed by organizations. The existing practices of carbon reporting do not incorporate these significant aspects. In addition, in many organizations carbon reporting is frequently part of sustainability reports as opposed to being an activity that stands alone. Organization also provide their carbon information separately however these are not in terms of corporate reporting to the stakeholders (Wells, 2013). It can be stated that the isolation of carbon reporting offers limited attention to the practice of carbon management. In addition, the critical practice of Carbon Accounting Management (CMA) will not be effectively undertaken if reporting is not considered a significant practice. There is therefore need to come up with an integrated approach that incorporates carbon reporting together with the mainstream reporting practices of the company. The Scope and Boundaries of Emission Accounting A significant contemporary issue of further consideration is the concern of the choice of organizational boundaries for carbon accounting. When reporting and accounting are linked to the trading and capping of emission, such as what takes place in the EU, boundaries are set during installation. An increasing number of experts and governments see the benefits of aligning carbon reporting and financial reporting essentially in the definition of organizational boundaries. This has been articulated in the guidance of voluntary disclosure by the UK government. An important debate however remains concerning the scope and the boundaries of emission accounting. The questions that arise include whether organizations should compare carbon performance with their financial performance. Another debate arise in relations to reporting and accounting indirect emissions that are outside the boundaries of the company for instance should Greenhouse gas emitted by the activities of the company outside its boundaries be reported (OECD , 2010). Should there be reliance on existing standards or should new standards be formulated. The foundations of carbon financing and accounting were formulated behind the background of an increasing concern concerning the lack of clear guild lines by standard setters and authorities. This has resulted to the emergence of numerous frameworks and standards that have been developed with the objective of accommodating certain industries .The situation has resulted to a great deal of confusion due to the absence of comparability (Fankhauser, et al 2009). There is a dilemma therefore of whether companies and institutions should use or comply to the routine accounting standards or whether new standards should be formulated in order to conduct carbon accounting practices (CDSB, 2013). Issues Associated with the implementation and enforcement of regulation and policy related to Climate Change (in the UK) The issue of climate change has brought about a raging debate not only on the global context but also in the context of the United Kingdom. The UK has ratified both local and international regulation and polices such as the Kyoto protocol with the objective of dealing with the issues of climate change. There are various policy and regulation issues that are linked to climate change. The capability to attain or meet the requirements of the stipulated regulations/ policies One of the key issues that arises concerning the policy and regulations on climate change in the UK is the capability to attain or meet the requirements of the stipulated regulations/ policies. The UK government is credited to have adopted one of the most legally binding and demanding targets lower greenhouse gases and carbon emission in the world. For instance the United Kingdom climate change Act of 2008 requires that the UK should lower its greenhouse emissions by 80% by the year 2050 and by 2020 at least 34% should be reduced. Also through the regulation, the UK has established three transitional carbon budgets together with a Climate Change Committee that is charged with the role of setting and also meeting the targets of the budgets. Such regulatory initiatives can basically be described as useful in resolving the challenge of climate change. The big question however is whether the UK can actually attain the requirements of the regulations. A case in point is when looking at the ratification of the Kyoto protocol. It can be stated that since the ratification of the protocol the year 1997, the UK has worked hard to reduce the emission levels of the set target of 8%. However, it can be stated that as far as emission is concerned the UK needs more time perhaps until the year 2020 in order to fully meet the targets set by the Kyoto protocol (Poplawski, 2014). A member of the House of Lords John Gummer also raised concerns concerning whether the ambitions targets of UK climate ambitions can be attained within the stipulated time frame. According to Gummer most of the time frames that were set by the UK are actually flawed and meeting the deadlines is actually not a reality (Tallis, 2015).On the basis of such findings it can be stated that the implementation and enforcement of regulation and policy related to Climate Change is definitely a reality that cannot be easily attained. The Impact of Policies on climate change on innovation and competitiveness A significant issue of concern to policy makers has been linked to the effect of climate change polices on the innovation and competiveness of business. In the event that polices are poorly designed then they have the ability to place businesses at a poor position compared to other nations that have not applied the same policies. On the other hand if policies are well designed, then the policies that prices carbon can result to low carbon innovations and also reduce the level of emission. The enforcement of climate change polices may therefore influence the innovation and competitiveness of business (Bassi, et al, 2013). Only few studies have been conducted to examine the impact of climate change on the competiveness and innovativeness of businesses. Some of the studies have been those conducted by Martin et al. (2011) to examine the effect of the Climate Change Levy (CCL) and the Climate Change Agreement (CCA) on production, energy efficacy and employment. Calel (2013) on the other hand examined the influence of the EU ETS on development expenditures, then intensity of CO2 and patenting activity and research. The findings of the study by Martin et al. (2011) disclosed that the Climate Change Levy (CCL) package was a unilateral policy innovation that has been adopted by the United Kingdom but not in the recent of the EU. The CCL has brought about damaging implication on the global competitiveness of the industries in the UK. When precisely examined, businesses will ultimately react to the implementation and enforcement of CCL through closing down their branches to countries that have environmental policies that are less strict. It can be stated that such findings basically imply that the enforcement and the implementation of climate change polices does affect innovation and competitiveness. This particular concern therefore raises the need for the adoption of alternative mechanisms that can assist in resolving the challenge of carbon emission. In general the impact of policies on climate change on the innovation and competitiveness of businesses is one that should be re-examined further. International cooperation on climate change Policies International cooperation when it comes to climate change is a significant aspect. This is based on the fact that climate change is not just a problem that affects the UK but rather it is a global problem. Consequence international cooperation in policy enforcement and implementation is a key issues that is to be examined. Having a strong international co-operation and leadership to attain the mitigations levels put up under the Kyoto Protocol is fundamental way of dealing with the problem of climate change. The UK government therefore needs to adjust their domestic policies so as to be in line with the climate change objectives. They further need to bring in market-based measures like carbon taxes, subsidy reforms and emission trading systems, and to put together these policies with programs that are focused for technology diffusion and development. The UK government also needs to formulate long-term mitigation policies as well as strengthen their partnerships with other countries in order to effectively handle the menace of climate change (OECD, 2001). An Analysis of Environmental / energy auditing techniques In the UK According to the New UK mandatory Energy Assessment Scheme of 2014, there are key recommended techniques that are to be used when conducting an environmental / energy audit. One of the techniques is to measure the total energy consumption. The total energy consumption comprises of energy supplied to a company, the energy that is consumed by the assets that the company holds and the energy that is used when conducting its activities. In the context of landlords they will have to integrate the energy that is supplied to the common sections of their buildings and in certain circumstances the energy that is supplied to their tenants (Sebastian and Ferm, 2014) Determining areas of significant energy consumption is another approach of conducting environmental / energy auditing. This basically involves the identification of areas of significant energy consumption which have to account for 90% of the entire energy consumption. Once the areas have been recognized, a company should carry out an ESOS assessment on the identified areas (Sebastian and Ferm, 2014) The identification of energy saving recommendations is another significant approach when conducting energy audits. The energy audit should examine the energy efficiency and consumption of the company and make recommendations for reasonably cost effective and practical ways to improve the identified area. Currently there is no standard approach that can be used to implement the recommendations (Sebastian and Ferm, 2014) When evaluating the existing Environmental / energy auditing techniques in the UK, it can be stated that the techniques used can be useful in reducing the cost of energy while at the same time lowering the levels of emission essentially from harmful greenhouse gases. A case in point is when looking at the first step which is measure the total energy consumption. When companies, households and even institutions measure their total energy consumption levels, they will be aware of their level of energy consumption which a fundamental step in making changes in the level of energy consumption. In most cases companies, households and institutions operate without being aware of the amount of energy that is utilized in their operations. This can be a dangerous environmental implication based on the fact that no initiatives can be undertaken to reduce the level of energy consumption. The determination of areas of significant energy consumption is another significant approach of conducting environmental / energy auditing. Companies and consumers can identify the key areas of energy consumption so as to be aware of areas that need reduction. A significant amount of saving costs can be attained by controlling the amount of consumption is different areas. In order to effectively implement this particular step, there is need for adopting a continuous energy monitoring system that will assist the organization to be aware of the key areas of energy consumption. Coming up with energy saving recommendations is also useful in approach to assist companies and institutions to make suggestions concerning how they can adopt cost effective ways of utilizing energy without affecting the environment . As the prices of energy continue to increase and companies have received a lot of pressure to lower their carbon footprint. It is therefore essential for companies to adopt cost effective measure that can be used in lowering their energy consumption. It can be stated the Environmental / energy auditing techniques in the UK are at the moment useful based on the fact that they assist in examining the compliance of organizations to attaining cost effective ways of energy utilization. There is however need to come up with a more detailed system of audit or a parameter that can be used to compressively cover all areas that are linked to energy consumption and utilization. Conclusion The above discussion has presented various key issues concerning carbon emission in the UK. One of the key areas of discussion involved the global socio-economic and environmental impact of carbon management. Some of the issues noted include the fact that carbon management can lead to the cutting of costs. Also it was noted that the public may not be willing to pay for products that are development out of the low carbon management initiatives. The paper also takes note of the policy issues that are related to the implementation and enforcement climate change. Some of the key areas noted is capability of the UK will meet its stipulated policy targets and the effects of the policy on innovation and competiveness of businesses. In conclusion, it can be stated that the UK has actually adopted effective policy and carbon management practices, however there is need for this practices to comply to global targets. This is because climate change is actually a global problem. References Bebbington, J and Larrinage, C, 2008, Carbon Trading accounting and reporting issues , European Accounting Review , 17(4), p697-717. Bassi, S, Dechezleprêtre, A and Fankhauser, S, 2013, Climate change policies and the UK business sector: overview, impacts and suggestions for reform, Centre For Climate Change Economics and Policy. Climate Disclosure Standards Board, 2013, Rethinking Financial Accounting for Carbon, CDSB. Calel, R, 2013, Emissions Trading and Technological Change, London: London School of Economics and Political Science. DECC, 2010b, Estimated Impacts of Energy and Climate Change Policies on Energy Prices and Bills. London: HMSO. Dance, S, 2010, The carbon management strategic priority, Carbon Disclosure Project . Dinan, T, 2008, Policy options for reducing CO2 emissions, Congressional Budget Office. Fankhauser, D, Kennedy and Skea , J 2009, “Building a Low-carbon Economy, The Inaugural Report of the UK Committee on Climate Change”, in: Environmental Hazards, 8: 1-8. Fornaro, J, Winkelman , K and Glodstein, D, 2009, Accounting for Emissions Emerging issues and the need for global accounting standards, Journal of Accounting . Marden, S and Gough, I, 2011, Fiscal costs of climate mitigation programmes in the UK: A challenge for social policy? , London School of Economics. Martin, R, Wagner, U and Muûls, M, 2011, Climate Change, Investment and Carbon Markets and Prices – Evidence from Manager Interviews. Okereke, C, 2007, An Exploration of Motivations, Drivers and Barriers to Carbon Management: The UK FTSE 100, European Management Journal, 25 ( 6), pp. 475–486. OECD, 2010, Transition to a Low-Carbon Economy Public Goals and Corporate Practices: Public Goals and Corporate Practices, OECD Publication. OECD, 2001, Organisation For Economic Co-Operation And Development. Policies To Enhance Sustainable Development: 3-29 Poplawski, P, 2014, What would be the consequences of not meeting Kyoto carbon targets? The Institution of Environmental Sciences , Sebastian , C and Ferm , J, 2014, New UK Mandatory Energy Assessment Scheme, Retrieved From < http://www.klgates.com/files/Publication/2869ec14-5657-471f-83dd-50d269ad2d08/Presentation/PublicationAttachment/25eddb1c-e255-4ea1-9fea-7f46c8ee7f90/New_UK_Mandatory_Energy_Assessment_Scheme.pdf> The Climate Change Act, 2008, Tallis, J, 2015, Is the Green party's climate change plan realistic, The guardian. Wells, G, 2013, Sustainable Business: Theory and Practice of Business Under Sustainability Principles, Edward Elgar Publishing. Read More

Surveys have in the recent years indicated that the automobile market continues to produce vehicles that have low emission, however only a few consumers are enthusiastic about paying the premium for the products that are environmental friendly. The adoption of such carbon management approaches are therefore bound to affect the automobile market in the even that consumers continue to decline. Marden and Gough, (2011) highlight that a key impact of carbon management programmes in the UK is that the consumer will eventually pay for program.

There is a growing dependence on the mandated markets and the emissions trading approach. This basically implies that the burden of Cost of Mandated Programmes (CMPs) is incurred by the consumers and eventually on the households. According to DECC (2010) the increasing prices of fuel in addition to the implications of some of this measures has resulted to an estimated fuel bill of 70% from £694 in the year 2003 to £1200 in the year 2008. Estimates by the DECC further disclose that the domestic prices of gas will be 12% more than the prices of electricity which are estimated to be 40% by the year 2010.

Some estimates indicate that carbon management initiatives are likely to affect consumers in terms of higher costs. One of the economic implication of carbon management in the UK is that the initiatives adopted are bound to affect the economic progress of the country. The UK climate change Act recommends that there should be a cut in the level of GHG by 80% to by the year 2050. The regulation also recommends that biding veiling of carbon emission for a period of five years. Such initiatives of carbon emission are indeed useful in attaining the objective of reducing the level of carbon emission.

Dinan, (2008) argues that although carbon management aims at reducing the level of carbon emission, nonetheless, lowering the level of emission would also impose costs on the economy. This is due to the fact that many economic activities are usually based on fossil fuels which release carbon in the form of carbon dioxide when they are burnt are the major economic drivers, lowering carbon emission will therefore definitely affect the economic progress of the UK. It can therefore be stated that although carbon management is beneficial in terms of lowering emission levels nevertheless there are negative economic implications.

Contemporary Issues in Carbon Management, particularly with respect to the economics of carbon accounting and financing The Issue of Carbon Disclosure / Reporting One of the big questions that faces organizations today is whether they should conduct carbon reporting. The increasing emphasis on climate change has resulted to the development of carbon accounting as a corporate tool that is aimed at integrating climate change considerations into main stream business practices. Similarly, carbon reporting is an areas has that attained significant academic attention.

The concept of carbon reporting was devised by Bebbington and Larrinage (2008). The authors propagated that in addition to the standard reporting of the levels of carbon emission, the uncertainty and risk that are linked to climate change should be disclosed by organizations. The existing practices of carbon reporting do not incorporate these significant aspects. In addition, in many organizations carbon reporting is frequently part of sustainability reports as opposed to being an activity that stands alone.

Organization also provide their carbon information separately however these are not in terms of corporate reporting to the stakeholders (Wells, 2013). It can be stated that the isolation of carbon reporting offers limited attention to the practice of carbon management. In addition, the critical practice of Carbon Accounting Management (CMA) will not be effectively undertaken if reporting is not considered a significant practice. There is therefore need to come up with an integrated approach that incorporates carbon reporting together with the mainstream reporting practices of the company.

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