An energy white paper, published today, confirmed the introduction of the Energy Performance Commitment in a bid to cap councils' CO2 emissions.
But the Local Government Association is unhappy with the scheme, saying the costs of implementing it could prevent councils from investing in other energy-saving schemes.
David Mulholland, policy consultant at the LGA, said: 'We expect that climate change will be included in the comprehensive performance assessment and that there will be a new indicator requiring authorities to take action on energy consumption. Our concern is that the Energy Performance Commitment could just be a replication of the new performance framework.'
The commitment is likely to apply to up to 5,000 bodies that fall outside the remit of the current European-wide carbon trading initiative.
It has been initially suggested, in the government's energy review last summer, that a cap could be placed on bodies that consume more than 3,000 mega-watt hours a year, which would affect all councils.
As with other carbon-trading schemes, organisations would be able to buy and sell carbon quotas with an overall output cap set by government.
Ministers are understood to be undecided on the final format of the scheme and will call for a further round of consultation before introducing the legislation to set it up.
The white paper is also expected to include plans for more nuclear power stations and the expansion of energy efficiency and renewable sources, such as tide and wind, which prime minister Tony Blair has said is necessary to help reduce harmful greenhouse gas emissions.
Policy & politics