I think there is now a huge consensus of opinion that we have a real climate crisis on our hands here on planet earth. A mixture of carbon emissions, other pollutants and deforestation etc have significantly raised the temperatures year on year and now we are suffering with more droughts and floods.
Action Needs To Be Taken Immediately To Arrest Climate Change
But although the powers-that-be know that action needs to be taken immediately to arrest the impact of climate change there is a great deal of dragging of feet as countries across the world deal with the cost of the pandemic as well as the war in Ukraine.
And the UK is no different, with it now looking increasingly likely that we will not reach our target of being a net zero carbon country by 2050.
The Net Zero Message Will Be A Difficult One To Deliver
Zara Duffy, Northern Ireland head at Chartered Accountants Ireland, wrote an excellent article in the Irish News recently about the need for greener policies, even though there will be a resistance to change from many businesses as they struggle to bounce back from the recent challenges. She wrote that the government must take the lead and provide support and direction to SME’s so that the UK can have effective green policies in place to reduce carbon emissions.
Below is part of the article where she wrote:
“Chartered Accountants Ireland would like to see closer engagement between Government and representative bodies to help businesses to understand their role in the decarbonisation agenda. When it is restored (hopefully sooner rather than later), the Northern Ireland Executive could create and lead a forum where professional bodies, Government agencies and other industry bodies meet regularly to collaborate in communications to the enterprise sector.
“The net zero message will likely be a difficult one to deliver while many companies, SMEs in particular, struggle to bounce back from the Covid-19 pandemic, as well as weathering the more recent challenges. Those struggling to survive in the short to medium term may be less well-disposed to receiving messages urging them to invest in change creating benefits for the longer term.
“As well as an effective and supportive message to business from Government, climate change and the drive to net zero will increasingly influence tax and budgetary policy. Carbon and climate objectives must feature significantly in future UK budgets. Tax policy can be used to help drive behavioural change which in turn should have the desired result of decreasing carbon emissions.
“Businesses, particularly SMEs, have a crucial role in meeting the UK’s net-zero emissions targets. However, they will only be able to deliver if they are supported by the right policy framework. The UK tax system could be used to accelerate business commitment to net-zero targets by implementing policies such as:
• Requiring the amount of carbon tax paid to be clearly stated on receipts while also setting out environmentally healthier alternatives on the same receipts;
• Re-introducing the 100 per cent enhanced capital allowances regime for products on a refreshed and annually updated energy technology list, including the payable tax credit, and promoting the scheme to encourage greater uptake;
• Providing a higher rate of enhanced R&D tax relief, say 150 per cent, for SMEs undertaking innovation in green technology; and
• Allowing enhanced tax relief for investors in renewable energy generation under the Enterprise Investment Scheme, the Seed Enterprise Investment Scheme and the Venture Capital Trust Scheme.
“There is no doubt that the current energy crisis is a daunting challenge. There is, however, now a chance to establish new policies that consider the current economic climate as well as encouraging the journey to climate neutrality, which may be the most important challenge of our lifetime.”
The above proposed policies would all make a real difference and really incentivise SME’s to introduce green measures that would benefit both themselves and the climate in the medium to long term.