Kate's Comment

Thoughts on British ICT, energy & environment, cloud computing and security from Memset's MD

CRC down on the farm

Response to the CRC changes in the Autumn Statement

Intellect UK (Britain’s high tech trade association) and I have been fighting hard to get the CRC scrapped over the last couple of years since it was a truly cretinous piece of legislation and they repeatedly ignored our recommendations during the many consultations. It is particularly damaging to data centres, which though energy-intensive are a vital part in decarbonising our society by supporting dematerialisation of goods and service, transport avoidance, smart grid and so forth. This issue is particularly acute since data centres are very mobile (think cloud; you don’t need to “lift and shift” servers to move your applications and data any more) and under the CRC it becomes a lot simpler to off-shore one’s energy intensive operations that actually becoming more efficient – not something that would be good for the environment overall!

Instead we advocate an expansion of the Climate Change Levy – simple taxation at source which is also very fair (it would cause small increases in energy costs for all businesses, not just large and/or energy-hungry ones – but therein lies its political un-palatability). We have had a small win in today’s Autumn statement though; while the CRC remains it has, we hope, been mortally wounded. The Treasury Web site tells us that they intend to scrap the league table – ridiculously complex and fundamentally pointless since it compares apples with oranges – and the CRC as a whole is coming under review in 2016. I hope that it will be canned at that point.

This is the excerpt from the Treasury Web site:

Carbon Reduction Commitment (CRC): simplification – The Government will simplify the CRC energy efficiency scheme from 2013 and the Performance League Table will be abolished. The Department of Energy and Climate Change will publish details of these simplifications. The Government will review the effectiveness of the CRC in 2016. This review will consider whether the CRC remains the appropriate policy to meet industrial energy efficiency and carbon reduction objectives, and will consider alternative approaches that could achieve the same objectives. The tax element of the CRC introduced at Spending Review 2010 will be a high priority for removal when the public finances allow.

Anyway, the CRC was a complex (as well as daft) piece of legislation which was always hard for laypeople to get their head around. Below is a delightful analogy from Emma Fryer from Intellect UK’s climate change group, with whom I work closely in my position as chair of the CCG. She also includes the new changes.

Introducing CRC Down On The Farm

The farm was producing too much manure. It was piling up everywhere and making a bad smell. The farmer noticed that the big animals – the horses, the oxen (it was an old fashioned farm) and the cows (as I mentioned, it was an old fashioned farm) produced the most manure. So he gathered all the large animals together and said “We need you to produce less manure, so we’re going to introduce a scheme – the Manure Reduction Commitment or MRC – to help you do that. It will make you more conscious of your manure output and also help you to become better, happier animals”

The animals were sceptical but as they couldn’t speak, they couldn’t say much about it. The farmer continued: “This is how it works. We are going to pool all our fodder. The animals that produce the most manure will have their fodder reduced. The animals that produce the least manure will get extra fodder”. This actually was more complicated than it sounded because the animals ate many different kinds of fodder and all types had to be accounted for separately, by the grain.

Until this point the animals hadn’t thought about how much manure they produced. Now they had to spend a lot more time than usual looking behind them to check their manure output instead of getting on with their jobs. The horses and oxen (who did all the heavy work around the farm, ploughing and harrowing and taking stuff to market and generally making the place work) were worried because they knew that they produced the most manure. If they got less food to eat would they still be able to work as hard? The farmer assured them that they would simply become more efficient, fitter and sleeker. The crafty pigs weren’t too worried because they knew that if they made their deposits in the other animals’ stalls when nobody was looking they would still get plenty of fodder.
Then the farmer’s accountant visited and said, “Hey, you are missing a trick here. Instead of redistributing the spare feed, why not keep it yourself and sell it?” The farmer thought about this (but not for very long) “What a great idea!” he shouted. So that’s what he did.

After a while it became apparent that things were not going terribly well. The horses and oxen were too thin and weak to do the heavy work. The horses were lucky, they could see that things were better in the next door farm so they jumped over the fence and escaped. The next door farmer was delighted to have some new horses and looked after them really well so they stayed there and worked for him instead. The oxen couldn’t jump so they had to stay where they were, getting thinner and more miserable. The cows, who also produced a lot of manure, were not producing as much milk because they too were going hungry. While they couldn’t leave, one of them did manage to kick the accountant quite hard in the groin when he next visited.

The farmer didn’t know what to do. He clearly needed to stop starving the animals on which the farm depended so heavily, but he had got used to the extra money and had already bought a number of things with poor resale value – a fancy car and a box set of Downton Abbey. He wondered whether, instead of just taking food from the larger animals, he could take a little bit from all the animals in the farm to share the burden more equally. There were dozens of sheep and hundreds of chickens. If each chicken gave up just a few grains he could keep the farm going and buy the next box set of Homeland. However, the chickens generated a large income for the farmer’s wife. She did not want the farmer messing with her chickens or using his stupid scheme to steal their feed. The farmer was afraid of his wife and of the endless histrionics that would result from even the smallest incursion on the chicken feed.

So he abandoned any plan to spread the burden across the whole farm. Instead, he decided to simplify the scheme by classifying wheat and oats as barley. He also stopped telling everyone which animals produced the most manure. The oxen were relieved that only the farmer knew about their manure output, but they still didn’t have enough to eat. The farmer could pretend that he had solved all his problems without doing anything at all. To celebrate his cleverness, he bought his wife a new hairdryer. Six months later the farm went bust.