MPs warn taxpayers to pick up bill for missed Whitehall carbon targets

The government is likely to miss its own targets for cutting emissions across the public sector and as a result will end up having to pay taxpayers' money to private sector firms under its new carbon trading mechanism.

That is the stark warning which is to be released later today as part of a damning new report from the Environmental Audit Committee of MPs accusing the government of making "little or no progress" in its efforts to curb carbon emissions and in some cases even backsliding on previous progress.

The report concluded that while good progress had been delivered in some areas, such as the 10 per cent cut in vehicle emissions that has been achieved since 1999, a failure to deliver cuts of more than seven per cent in emissions from buildings meant the government would fail to meet its overall target to cut emissions 12.5 per cent by 2010/11.

The report also found that some recent improvements in Whitehall's environmental performance have been reversed in the past year. It noted that the proportion of renewable energy being used by the government fell from 28.3 per cent in 2006/07 to 22 per cent a year later, while recycling rates fell from 38.5 per cent to 35 per cent over the same period.

The committee warned that not only was the government at risk of missing its own environmental targets, but the soon-to-be-introduced Carbon Reduction Commitment (CRC) meant that taxpayers may have to foot the bill.

Under the CRC, which is expected to cover about 5,000 businesses and public sector bodies, those organisations that exceed their emission caps will have to pay penalty fees into a central fund that will be distributed between those that come in under their targets.

Tim Yeo, chairman of the EAC, warned that under the rules any public sector department missing its target would have to pay penalty fees that could be distributed to private sector companies that have successfully delivered emission reductions.

"Unless the government gets its house in order, taxpayers could end up paying a heavy price to buy carbon credits from the private sector," he warned. "In too many areas, such as emissions of carbon dioxide from offices, it has made little or no progress and in others it is backsliding."

The committee recommends that the government undertake a full review of its sustainability targets and upgrade those targets that have been met easily. It also calls on ministers to step up efforts to ensure government procurement policies are used to increase demand for green products and improve processes for measuring civil servants' performance against environmental metrics.

A spokesman for the government said that it welcomed the committee's report and would respond to its findings in due course.

He added that there was "no evidence to suggest the taxpayer will incur additional tax burdens through departmental involvement in the Carbon Reduction Commitment programme".

He also insisted that "significant progress" has been made in improving the government's performance on sustainability across its operations and estate and that departments continue to perform well against their sustainability targets.