Analysis indicates that the Carbon Reduction Commitment (CRC) will result in an overall net present value benefit to participants of around £1 billion.
The CRC is designed to help secure emissions reductions cost-effectively from across the economy, and will promote changes in behaviour and infrastructure. The costs to the public purse per tonne of carbon dioxide will be close to zero, as carbon savings have been modelled to be at least 4 Mt CO2 by 2020. Only the costs of the initial setting up of the scheme and enforcement action by the regulators will be paid from the public purse. It is designed to be broadly revenue-neutral to the Exchequer.
The revenue raised from the sale of allowances will be recycled to participants. For participants taken as a whole, the costs of participating will be outweighed by the savings from the reduction in energy bills.