Tobias Parker of Sustain argues the Chancellor should quit attacking green firms and get on with reforming the tax system
George Osborne's apparent attack on the government's carbon reduction framework earlier this week at the Conservative Party Conference has left businesses, environmental campaigners and groups committed to a low carbon economy in a state of irritation and confusion.
It's ironic that in the same week in which those at the top of the Conservative Party aspired to mediocrity in carbon management, two groundbreaking international standards for measuring and managing business carbon use were unveiled in London and New York. The new accounting standards from GHG Protocol, to measure emissions from corporate value chains and from a product's lifecycle, will ensure that companies get a much fuller idea of their total carbon footprint.
Those businesses that have been eagerly awaiting these initiatives and who have already been rigorously tracking and reducing emissions use through, for example, the GHG Global Reporting Initiative (GRI), may now feel that the time, energy and money behind these efforts have all been wasted. Indeed, despite recent strides in legal commitments and technologies, there is a real fear that those who control the purse strings in Government will be reviewing and watering down Britain's carbon targets.
I want to reassure conscientious businesses that these investments have not been in vain. It's important for these businesses to remember that they are moving towards a more economically sound future with significantly lower energy costs.
On Monday, George Osborne blamed a "decade of environmental laws and regulations [for] piling costs on the energy bills of households and companies". This does not recognise either the importance of environmental legislation in protecting us against future risk, the financial savings that can be made through cutting out wasted and unnecessary energy, and providing a more balanced - and therefore secure - portfolio of energy sources.
There is an alternative approach which I would like to suggest to Mr Osborne. Rather than blanket costs for all companies, I recommend a tiered taxing system which demands payment of taxes from businesses according to the products and services they produce and the carbon management systems they have in place.
For example, if a company is designing and delivering low carbon goods or services, they should pay lower taxes or receive more tax credits than a company who is producing no such product or has no such strategy in place.
Investment would rush in; businesses would relocate to the UK. A tiered tax system would truly encourage voluntary, pro active and motivated investment in this area. We'd see businesses automatically working to adopt more sustainable policies to save substantial amounts of money and of course, those who did not want involvement would not be obliged to participate, but would continue paying taxes as they have always done.
Redesigning the tax regime in this radical way would truly be a task fit for the self styled 'greenest government ever' and mark the Coalition as the most reformist government for decades. The question is whether David Cameron as leader can nudge his Chancellor of the Exchequer back to the future.
Tobias Parker is the chief executive of Sustain
