In the 1999 Budget the Chancellor of the Exchequer announced the introduction of an energy tax for non– domestic consumers — the Climate Change Levy (CCL). The Government claimed that the CCL would save 2 million tonnes carbon (MtC) per year by 2010. The impact of the CCL was higher than expected and is likely to lead to carbon reductions of 3.5 MtC per year. To “soften” the financial blow of the CCL, industrial sectors were presented with the opportunity to enter into voluntary agreements with the Government. In return for adhering to the Climate Change Agreements (CCAs), by reducing energy consumption and carbon emissions, companies receive an 80% rebate on the CCL. At the time of negotiation, it was believed the CCAs would deliver savings of 2.5 MtC in 2010. This figure has since decreased to 1.9 MtC in 2010. With five years remaining until the current Agreements expire, the Government has decided to extend the CCA programme until 2017. In this paper the authors analyse the performance to date of CCAs, based on empirical data from stakeholders, and present a series of recommendations in relation to the continuation of the Agreements beyond 2013.
European Energy and Environmental Law Review