Carbon is a cabaret, old chum.

“Money makes the world go around” sang Liza Minnelli in the musical ‘Cabaret’. Set in 1931 Berlin, a particularly dark and gloomy historical period with Germany polishing her guns in preparation for war, the story’s Kit Kat Klub is a decadent, seedy and immoral place where anything is for sale. Unperturbed by the growing unrest around them, the Kit Kat Klub-goers party on with raucous delight.

In 2008 London, the deepening low in the financial crisis inevitably prompted comparisons with the 1929 Wall Street crash, however the champagne parties that marked the end of the likes of Lehman Brothers had a more distinct ‘cabaret’ feel to them. The pattern of dishonesty and outright greed on the part of the financial institutions together with the staggering incompetence on the part of policy makers will make a great musical in a few years. As the FTSE-100 nosedived and British banks imploded, the Lehman Brothers PA system, known as the hoot, blared out the R.E.M. song as “It’s the End of the World as We Know It”; surely someone can choreography that into a great West-end finale?

Fun for the future perhaps, but rather depressing now, especial when one considers that similar models to these that are so spectacularly failing in the financial world form the basis of modern environmentalism. Cap and trade policies which involve putting limits on greenhouse-gas emissions and allowing companies to buy and sell the right to produce carbon is the equivalent of the sub-prime fiasco because at the end of the day no one will accept the high carbon prices that are required to make a significant dent in global warming.

Far from accepting that high fuel prices are a fair short-term trade for averting long term climate change, a little economic pain has been enough to quickly undo much of the good work done so far. The environmental movement may have made us care about global warming but they haven’t really made us willing to sacrifice anything financial tangible about it.

If the £37bn of taxpayers money to save the banks is seen as rewarding the irresponsible, what would you call the almost £7 million wasted every day by UK industry due to poor energy efficiency? This is not through lack of knowledge or awareness. As many as 80 per cent of all energy saving surveys that show significant energy savings are not being implemented even though they would produce very quick paybacks against any upfront investment. If greed fuelled the banking crisis, reticence, intransience, and let’s face it, incompetence by many energy wasting users will continue to pile on the pressure to the environment long after this current credit crisis is forgotten.

To help the money flow in the energy saving direction, the Carbon trust has announced it has doubled the maximum size of its interest-free Energy Efficiency Loans from £100,000 to £200,000 for small businesses. This will surely help those companies that are prepared to jump through the hoops to secure the loan and not worried about having them treated as ‘on balance sheet’ under statutory accounting rules and the resultant negative affect on certain key business indicators.

An alternative of funding energy saving projects is to rent the whole project from a leasing company. This allows net cost savings to be made right from the start and qualifies as an ‘operating lease’ and thus is accounted for ‘off balance sheet. For example, take a refrigeration project that can be shown to save electricity worth £30,000 a year but requires a capital investment of £60,000. The leasing company pays the £60,000 and rents the plant to the client over five years. The rental is £13,000 per annum which is more than covered by the energy saving of £30,000 per annum. So the project is cash rich from the start. Mary Poppins would perhaps see the £17,000 annual saving is the ‘spoonful of sugar that helps the medicine go down’; carbon reduction ‘in the most delightful way’.

Many organisations have trapped themselves into a dead-end by only considering payback periods of eighteen months or less. This is ‘cutting your nose off to spite your face’ when you consider that under some rental schemes, provided the project has a break even of four and a half years or less then the rental payments will be more than covered by the energy savings.

There is money available in the forms of loans and other financial schemes available to make significant energy reduction a possibility. Perhaps money really will 'help the world go around' after all.