U.K. Groups Recalculate Costs of Mandatory GHG Reporting

by | Aug 2, 2011

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Environmental groups in the UK are making their case for the value of mandatory carbon reporting after a government study put a price tag of about $9.8 billion (£6 billion) for the cost of such a reporting policy to British businesses over ten years, reports the Financial Times.

The report, “The costs and benefits of mandatory greenhouse gas reporting,” researched by adelphi [sic] and published in partnership by the Aldersgate Group, Christian Aid, The Co-operative and WWF disputes the findings of the Department for Environment, Food and Rural Affairs (Defra) impact assessment.

The rebuttal assessment, modeled after the Defra IA, finds that when analyzing the impact scenario of mandatory greenhouse gas reporting by large companies, Defra overestimates the total costs by up to $7.5 billion (£4.6 billion) and underestimates the benefits by up to $1.6 billion (£980 million).

Overall, the report found, Defra’s IA has taken a fairly narrow focus when looking at benefits, rarely taking into account wider social and environmental benefits that arise.

The U.K. environmental department is under pressure from the Treasury and from some business lobbying groups to abandon the policy because of its potential costs on corporate Britain. And this momentum to drop the reporting plan comes despite parliamentary support for reporting (137 MPs having signed an early day motion on the issue) and pre-election promises of coalition parties, the Financial Times said.

Companies already face carbon reporting commitments under the European Union emissions trading scheme and Britain’s carbon commitment. The new system would go further by including all greenhouse gases and not just carbon dioxide, the Financial Times said.

The groups that commissioned the report argued that the findings show that mandatory carbon reporting would be good for business and play an important part in the transition to a low-carbon economy. “The best companies are already measuring and managing their carbon as a matter of best practice, and it’s time the laggards were made to do so as well. Voluntary carbon reporting has played its part but now it’s time for mandatory carbon reporting to be brought in to really drive efficiency savings and drive down greenhouse gas emissions, said WWF-UK’s Sue Charman.

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