Climate Change Agreements – Cambridge Econometrics joins consortium to evaluate UK scheme

Cambridge Econometrics is pleased to join other partners including CAG Consultants (lead), UCL and Winning Moves, to evaluate the Climate Change Agreements (CCAs) scheme for the UK Government’s Department of Business Enterprise and Industrial Strategy (BEIS).

The Climate Change Agreements (CCAs) play a key role in the Government’s aim to support businesses to improve their energy efficiency by at least 20 per cent by 2030, as announced in the Clean Growth Strategy.

The CCAs accompany the Climate Change Levy (CCL), a key UK energy tax introduced in 2001 to drive an increase in energy efficiency in the non-domestic sector, in response to the Marshall Report on “Economic Instruments and the Business use of Energy”.

The CCL is a tax on supplies of electricity, gas, solid fuel and liquefied petroleum gas payable by business and public-sector organisations. The CCAs were introduced to reduce this impact on industry by giving them a CCL discount in return for meeting negotiated energy efficiency targets.

Sophie Heald, Project Manager at Cambridge Econometrics, said:

“We will apply sophisticated macroeconomic modelling techniques to assess the impact of the CCA scheme on energy consumption, industry costs and competitiveness, ultimately allowing BEIS to determine the effectiveness of this policy.”

Mary Anderson, Partner at CAG Consultants, said:

“This challenging evaluation will explore whether and how CCAs have influenced both energy efficiency and competitiveness within energy-intensive industrial sectors in the UK.  The evaluation, led by CAG Consultants with UCL, Winning Moves and Cambridge Econometrics, will bring together evidence from quasi-experimental assessment, macro-economic modelling, qualitative and quantitative research. Verco will act as technical advisors to the consortium in this complex policy area.”

Paolo Agnolucci, Senior Lecturer in Environmental and Resource Economics at University College London, said:

“This is an exciting project with some serious technical challenges related to data matching, small samples and the scheme not being compulsory. We will be delivering this by building on our great experience of quasi-experimental evaluation gained though our work on ESOS, Salix, RHI and WHSDS. From an academic point of view, this is a great opportunity for putting advanced quasi experimental assessment at a good use and deliver research which has a direct impact on the formulation and assessment of governmental energy policy.”