I’m a big fan of unintended consequences, particularly when they arise due to hasty, ill-considered carbon policy. Well, thank goodness that the coalition has woken up to the unintended consequence of the Carbon Reduction Commitment (CRC). Now that they have revised the scheme I can talk about it freely without letting the cat out of the bag.

Prior to the Comprehensive Spending Review, the CRC would have raised money by charging large businesses for emitting carbon and used the money to reward those that cut their emissions year on year. The scheme started in April with a measurement year to establish a baseline against which future reductions would be rewarded. The blindingly obvious consequence of this is that anyone who wanted to benefit from the CRC would consume as much energy as they possibly could in the measurement year, so that they could then progressively turn their lights off and get the cash reward whilst still emitting more carbon than before the scheme was introduced (call me an old cynic!)

Fortunately, the Coalition has announced that it is now going to keep all the money raised, so the CRC has simply become a Carbon Tax. This will cost millions and has been dropped on the business community with no prior warning, so I can’t see it lasting for long, but at least there is no longer a financial incentive to emit even more carbon than business as usual.