Inventory and description of the instruments/incentives used by the local authorities in the UK to stimulate
the development and the integration of the cleantechs at SME level.
Note: The problem with BAT (Best available technique) is that it can be too costly for adoption, rendering businesses uncompetitive. It is modified in the
term BATNEEC; “Best available Technique, not entailing excessive cost.”
The use of Local Authority tools can help ensure that BAT is also BATNEEC
The coding in “Scope” below relates to Kachan & Co’s categories:
A) Renewable energy generation, ranging from wind and solar to fuel cells and nuclear.
B) Energy storage, including batteries, thermal, hydrogen etc.
C) Efficiency, a catch all position relating reducing consumption of all resources including energy, water and to quote “creation of new stuff”
D) Transportation including the infrastructure for fuelling/charging and managing traffic
E) Air and Environment covering all emissions and waste management
F) Clean industry, relating to innovation in materials, goods and packaging
G) Water, from production and distribution to efficiency, and quality
H) Agriculture, which includes all growth of resources, both land and marine
Theoretical Options.
Instrument
Pigouvian
taxes and
subsidies
Classification Scope Description
Economic
A, B, Compensation for external costs, by
C, E, subsidising BAT or raising the cost of
F.
environmentally harmful goods,
enabling BAT to compete and gain
competitive advantage. Can be offset
by adjusting other taxes to ensure that
it is revenue neutral. Subsidies can be
ongoing until goods are competitive in
their own right.
Example
Subsidy given to wind
power generation in
order to enable it to
complete with fossil fuel
powered production
during its start up stages.
Carbon tax in petrol
pricing and road tax
bands encouraging use of
economic engines.
Charging waste disposal
to encourage recycling.
Limitations
As the purchasers are more likely to buy BAT,
government ends up worse off. (They either pay
more of the subsidy or receive less of the
tax.) Public opinion: pigouvian taxation is an
excuse to raise overall taxation –offset not
seen. Most effective in the short term Assumes
there is an optimum level of pollution that is
not subject to location. (Taxes apply at the
same rate in all areas regardless of
sensitivity) Tend to be “ad hoc tax” because
they have been developed over time. The
whole tax package needs review
Instrument
Clean tech
installation
subsidy
Recycling
Tax-subsidy
Permits. (C
ommand
and
control)
Tradeable
pollution
permits
Classification Scope Description
Economic
A, B, The promotion of clean tech supported
C, D, by grants and subsidies to cover part or
E, F,
all of the cost of adoption/installation.
G, H, Generally involves one-off payments
but can be handled through tax credits.
Economic
A, B, Taxation on harmful activities that is
C, E, recycled as a subsidy to invest in clean
F.
tech that reduces the harmful activities.
Regulation
E, F,
Licensing the quality and quantity of
G.
material a business can release into the
environment including waste, thus
stimulating recycling.
Example
Subsidies to install
insulation in buildings.
Regulation
USA Power plants were
allocated tradeable
pollution permits limiting
the release of SO2. This
enabled those that could
improve performance at
low cost to do so and sell
to those that were unable
to change so easily.
Now adopted in Europe.
The incandescent
lightbulb. CFC’s
Banning
Regulations
substances /
technologies
E, G.
Licensing the quality and quantity of
material a business can release into the
environment. Their tradeable nature
encourages investment in better
performance rather than simple
compliance within the set limits
A, B,
C, D,
E, F,
G, H.
When there are competing
technologies, and the cleaner one has
no evident drawback and is sufficiently
competitive, then, if the benefits are
sufficient to warrant government
action, the poorer technology should be
Control of sewage
discharge by water
companies. Exhaust
emissions testing as part
of MOT
Limitations
Requires monitoring and enforcement
mechanisms to ensure that the subsidy is spent
as intended. May not be available to new
business and therefore act as a barrier to entry.
Taxation should be sufficient to fund subsidies.
May not be available to new business and
therefore act as a barrier to entry.
Requires monitoring and enforcement
mechanisms including the installation of
potentially expensive measuring
systems. Assumes there is an acceptable level
of pollution. Non-tradable permits are an “end
of pipe” measure; Clean Tech looks for
more. Could be a barrier to entry (must obtain
permits and measurement technology)
Tradable permits do more to encourage
reduction but need a market system, a real;istic
price for carbon and sufficient businesses to
facilitate the trade.
Tradeable permits negate any effort to tie
permit to location. Trade may be reduced as
cost of meeting tougher regulations rise.
Therefore most effective when introducing new
areas of control.
Requires market acceptance. Could create other
costs; eg if the alternative technology is
produced by different organisations, it could
result in job losses / business failure.
Instrument
Classification Scope Description
withdrawn.
Certification Voluntary
self
regulatory
A, B,
C, D,
E, F,.
Exhibitions
A, B,
C, D,
E, F,
G, H
D, E.
Knowledge
exchange /
Partnership
s
Urban design Structures
Businesses adopt these standards
voluntarily. They are audited, and
entail continual improvement.
Importantly, they cascade down the
supply chain offering competitive
advantage.
The provision of exhibition centres and
Travelling or static, temporary or
permanent sites.
Example
Limitations
ISO14000 series. EMAS
Can be a barrier for small businesses because of
the wide range of issues and expertise required.
The coming Gastech
exhibition and
Excel. Seimens exhibition
centre
Controlled traffic access / bus priority lanes / transport hubs /
parking controls / design to reduce volume of journeys. Tree
planting / regenerate or rebuild.
The challenge of the SME:
Too small to have specialists and significant resources
Can operate without chamber of commerce knowledge – no “central register”
Wide range of activities leading to diverse needs.
Promotion and take up required. Timing of
temporary exhibitions must match need, or the
content could be forgotten. Cost and time
involved can be deterrent to small businesses.
Many techniques are long term. Can have
unforeseen consequences