The Confederation of British Industry (CBI) has warned that the Carbon Reduction Commitment (CRC), the government's flagship energy efficiency scheme, is untenable in its current form.
The lobbying group says that the government's decision to remove the revenue-recycling element at October's Spending Review has undermined the original purpose of the scheme of encouraging organisations to cut emissions.
Rhian Kelly, CBI director for Business Environment says, ' We now have a carbon reduction scheme that actually adds to the cost of doing business.
' The government pulled the rug out from under organisations that signed up to a scheme to reward them for becoming energy efficient in good faith.'
The CBI says if the government restores the original incentive behind the scheme, progress could be made on making it more effective.
This could involve participants being able to buy carbon allowances at a fixed price, or moving the CRC to a full cap and trade system.
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