Morse Identifies Loopholes in CRC Regulations

Tom Jowitt is a leading British tech freelance and long standing contributor to TechWeek Europe

The government’s CRC laws are flawed, as companies can simply offshore their data centres and it doesn’t take into account power from renewable sources, warns Morse’s Brian Murray

IT services provider Morse has identified what it believes are a number of serious flaws with the British government’s looming CRC (carbon reduction commitment) regulations.

The UK’s Carbon Reduction Commitment is now called the CRC Energy Efficiency Scheme and is due to begin in April 2010. However Morse feels it has the potential to pose a “serious threat to UK businesses and could even have little, no or possibly negative effect on global emissions.”

One of the largest loopholes, according to Morse, is the fact that rather than reducing emissions in the UK, large organisations could simply relocate their more emission-heavy operations (such as a data centre) to countries with less stringent regulations.

This would mean the UK and the CRC loses out on funds that the CRC would have generated. It also means that there is no incentive for these organisations to pursue a more efficient, low-emission business model.

This sentiment was echoed last month by hosting company UKSolutions, which warned that the CRC was a “pretty poor piece of legislation” and that it would actually make it more expensive for some companies to move to a more efficient IT option.

The other serious loophole that Morse has identified is that the CRC does not do enough to take into account where energy comes from. For example, an organisation taking all of its energy from renewable sources such as a wind farm or solar, is treated exactly the same as one relying on non-renewable power such as a coal fired power station. This is despite the fact that the two examples would be responsible for wildly different carbon emissions, from the same amount of energy used.

“As a company we applaud the intentions of the CRC and the move to reduce carbon emissions at some of the largest organisations in the UK, whom to date have not been subject to any regulation in this area” said Brian Murray, a principal consultant at Morse.

“The government is clearly trying to use financial incentives to encourage businesses to reduce carbon emissions. In principle, there is nothing wrong with this, as there is nothing more likely to grab senior management’s attention than cost. However, an important factor seems to have been neglected and that’s the fact that businesses will do almost anything to keep their expenses as low as possible.”

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“The CRC effectively targets what the government feels is the most energy consumptive companies, and is not based on energy consumption over a year, rather it is based on power consumption,” Murray said, speaking to eWEEK Europe.

“With CRC funds are collected, which go into a pot, and some of this is redistributed back to the companies, depending on their league table rankings,” Murray explained. “The problem is the things they have taken into account. It doesn’t consider if people are using more or less power, and it doesn’t take into account the supply chain for that power, whether sourcing the power from coal fired power stations or renewable energy.

“It also doesn’t consider companies achieving energy savings, by moving their power hungry infrastructure overseas,” Murray warned. “Most people have a balance of stuff onshore and offshore, and they can just shift that balance accordingly.