The limits of complexity and capacity in climate policy: What can we learn from Britain?
Introduction
In a wave of reorganization initiated by Her Majesty’s Treasury Spending Review, the British government has brought reform to the UK’s gleaming new climate program: the Carbon Reduction Commitment and Energy Efficiency Scheme (the CRC). The CRC, an ambitious organizational GHG trading scheme, is facing substantial restructuring under the banner of simplification. As a part of this reconfiguration, the program will: shed some of its more complex elements including a carbon trading regime with indirect linkages to the European Union Emission Trading Scheme (EU ETS); reduce the scope of its reporting requirements; and, in a development that has raised eyebrows around the world, scrap its revenue recycling provisions, effectively converting the program’s performance-based economic incentives into an ad hoc carbon tax levied across participants and expected to deposit £1bn per annum into public coffers (the program was previously revenue neutral).
A yawning deficit in Britain easily explains the overnight amendments to the CRC’s revenue provisions. But the sudden and sweeping reform of the program’s other design elements demand closer consideration and a number of tough questions regarding the British approach to regulatory complexity and capacity in climate programs.
