Huhne confirms "ambitious but achievable" carbon budget

Chris Huhne has confirmed that the government will enshrine aggressive emission cuts in law, promising to halve output by 2025 and put the UK on course for a 60 per cent decrease by 2030.

As widely expected, the Energy and Climate Change minister unveiled the UK's fourth carbon budget in the House of Commons today, accepting the recommendations of the independent Committee on Climate Change (CCC).

The carbon budget runs from 2023 to 2027, and is part of efforts to meet legally binding emissions cuts of 80 per cent by 2050, setting the UK apart from all other nations by establishing legally binding targets beyond 2020.

"By agreeing to the CCC's proposed level, we are demonstrating our desire to drive the changes needed to turn the UK into a dynamic, low carbon economy that is attractive to investors in the new and growing low carbon sectors," Huhne told the Commons.

"We are also sending a clear signal to the international community that the UK is committed to the low carbon economy. This will help us reach agreement in Europe on moving to a 30 per cent emissions reduction target, and build momentum toward a legally binding global climate change deal."

Huhne said that, while the CCC had recommended that the targets should be met by domestic cuts rather than relying on carbon trading, the government intends to "keep our carbon trading options open to maintain maximum flexibility, and minimise costs in the medium long term".

He added that the government would review its progress in early 2014 to see whether the UK is still aligned to goals set down by the EU's Emissions Trading Scheme, and will alter its trajectory should the country be off track with Brussels.

The carbon budget has proved controversial in the Cabinet, and Huhne was reliant on the personal intervention of the Prime Minister in the face of stiff opposition from Chancellor George Osborne and Business Secretary Vince Cable.

A leaked letter suggested that Cable is concerned that the strict targets would damage the UK economy, but Huhne argued that adopting the budget will provide greater confidence and certainty to companies investing in low-carbon technologies.

Perhaps in a nod to his colleagues, Huhne recognised that energy intensive businesses would be most affected and said the government would take steps to reduce the impact of the policy on the cost of electricity for these businesses as part of a package of measures.

"By providing long-term clarity for investors, the Fourth Carbon Budget places the UK at the leading edge of the global low-carbon industrial transformation," Huhne concluded. "It is a framework not just for action on climate but for growth and prosperity."