Climate levy had 'little effect on business emissions'

The Climate Change Levy (CCL) has had relatively little effect on business emissions since its introduction in 2001, according to a report issued by the government's Environmental Audit Committee.

In particular, small and medium-sized enterprises and large non-energy intensive organisations have made little progress.

Although carbon savings have occurred, these were "strongly front-end loaded" and eased off soon after the introduction of the levy.

It appears there is a significant "gap between economic theory and the actions of businesses in the real world", the committee noted.

The committee found that most energy savings had come from increased awareness rather than as a result of the tax.

It recommended that Climate Change Agreements should be reformed so their targets are in the form of absolute reductions in carbon emissions, rather than relative improvements in energy efficiency.