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The Government has confirmed its agreement to the Committee on Climate Change's advice for greenhouse gas emission reductions of 50% against a 1990 baseline to be achieved in the period 2023-27. Media reports said that the proposals had been challenged by the Department for Business, Department for Transport and by the Treasury and were only agreed following an undertaking to review the targets in the light of actions by other countries.
The Energy and Climate Change Secretary, Chris Huhne, said that the proposal is in line with advice from the independent Committee on Climate Change. It sets a fourth carbon budget of 1950 MtCO2e for the period that will span from 2023 to 2027, putting the UK on course to cut emissions by at least 80% by 2050.
The Government plans to review progress in EU climate negotiations in early 2014. If at that point the UK‟s domestic commitments are on a different trajectory than the EU Emissions Trading System trajectory agreed by the EU, the UK can then revise the budget to align it with the actual EU trajectory.
Before the end of the year, Mr Huhne said, the government will announce a package of measures to reduce the impact of government policy on the cost of electricity for energy intensive industries and to help them adjust to the low-carbon industrial transformation.
Mr Huhne told the House of Commons: "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."
"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."
Business Green reported that Mr 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".
The carbon budget has proved controversial in the Cabinet, and Mr Huhne was reliant on the personal intervention of the Prime Minister in the face of reported stiff opposition from Chancellor George Osborne and Business Secretary Vince Cable.
A leaked letter suggested that Mr Cable is concerned that the strict targets would damage the UK economy, but Mr Huhne said that adopting the budget will provide greater confidence and certainty to companies investing in low-carbon technologies.
The CBI responded to the Government's announcement with Katja Hall, CBI Director of Policy, saying in a press statement: "We support a 50 per cent emissions reduction target by 2025, but we won't achieve this unless the Government gets the short-term policies right.
"With the green economy potentially bringing in £200 billion of investment into the UK's energy sector alone, we need policies that will foster growth by decarbonising our energy supply, increase energy efficiency and support the competitiveness of our manufacturing base. As a result, we support the Government's decision to address the impact of the target on the competitiveness of energy intensive industries.
"Ultimately, it is the success of measures such as the Green Investment Bank, electricity market reform and the Green Deal that will decide whether we meet ambitious emissions targets."