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You've heard of Countryfile? Well, this is carbonfile, reporting on the joys and beauties of climate change policy. Think of us like the John Craven of carbon.

A new carbon trading scheme is about to be launched in the UK. It's called the Carbon Reduction Commitment (CRC) and is designed to encourage big organisations that are not covered by other climate change legislation to reduce their energy consumption. From next year, organisations including banks, hotels, supermarkets and government agencies will have to take part. But there are strong criticisms surrounding the scheme.

What is the CRC?

Organisations that are not in the EU Emission Trading Scheme but use a large quantity of electricity will be required to measure their emissions and buy a corresponding number of credits. In the first three years (2010 to 2013), an unlimited number of credits will be available at a fixed price of £12 per tonne of carbon dioxide. Following that, a fixed number of credits will be auctioned.

All of the money raised by the government will be 'recycled' back to the participants, with companies that achieve greater emissions reductions receiving a larger share.

And what's wrong with it?

There are a number of issues with it, but we'll focus on what we see as the most fundamental one: the CRC is likely to have a very limited impact on emissions. It does provide an incentive to reduce emissions, but a large proportion of those reductions are likely to be achieved through more efficient use of electricity, which creates a problem. (Putting on our best John Craven serious voices.) Here's the rub: when the participants in the CRC reduce their electricity consumption, emissions from electricity go down. Energy generators are included in the EU Emission Trading Scheme, so their demand for EU Emission Allowances (the credits that we cancel) also goes down. These allowances are in short supply, so other sectors will buy the surplus allowances and use them to emit more. So where the CRC reduces electricity consumption - which is its main purpose - the net impact is likely to be zero.

What can I do about it?

The CRC is unlikely to have a big impact on consumers, and in this case we think it's more effective to engage directly with the companies you buy from rather than try to change the policy environment they work in.

If you think your organisation might be affected by the CRC, we'd be happy to explain the policy in more detail and show you what it will mean in environmental and financial terms - just get in touch at info@carbonretirement.com.