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carbon emissions update - measuring your carbon footprint

5 December 2008

It has been a big few months for UK carbon emissions news. The social and political climate change agenda continues to affect all businesses, providing both opportunities and risks.

Last week, the Climate Change Act 2008 formally passed into law. The Act commits the Government to reducing carbon emissions for the nation by 80 by the year 2050.

Last month we also saw the first UK auction of carbon emission allowances. Four million allowances were sold by the Government, at a total value of £54.4m. By 2012, the revenue figure is expected to rise to more than £1 billion. If there was any doubt, it is now clear that carbon trading is big business.

In addition, the end of October saw the BSI finally publish its specification for the assessment of greenhouse gas emissions related to goods and services (PAS 2050). It is intended that the standard will enable companies to assess the carbon footprint across the life of a particular product on a consistent basis.

PAS 2050 is described as an audit tool which will enable businesses of all sizes to measure the amount of carbon dioxide emitted during the production, consumption and disposal of their products.

Although use of the PAS 2050 is not legally binding, looking to the future it is likely to become a key tool in keeping track of the carbon footprint of your operations. This will be useful to companies in that it might enable environmental marketing of their products, or allow them to take advantage of government incentives, and conversely may provide a tool to minimise adverse regulatory intervention in a business.

For instance, many informed consumers now choose products based on environmental information. Consumer requirements for product information have an impact further up the supply chain. In times of rising energy costs, these consumer decisions can be based on both moral and economic grounds.

We have seen an increase in the number of environmental claims made by companies about their products, but at the same time this has given rise to an increase in the number of complaints made to the Advertising Standards Agency. Sometimes this is described as greenwash because the claims are not substantiated by hard evidence. Trading Standards may also use their new powers to prosecute traders who falsely claim environmental credentials, for instance by displaying the Energy Saving Recommended logo without authorisation. They can already use existing powers to prosecute those who fail to comply with their obligations to reduce product packaging.

Even prior to the Climate Change Act, local authorities have been required to use their resources and powers to reduce carbon emissions per capita in their area, and businesses are incentivised to reduce emissions through Climate Change Agreements. In the future, certain large organisations are to be subject to the Carbon Reduction Commitment, which will require them to monitor and report their total energy use emissions.

It remains to be seen what further legal developments may be subsequently introduced in order to achieve the Governments carbon goals.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

Richard Barlow

Richard Barlow

Partner and Head of Government Sector

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