Emissions targets to be part of the Budget

Ed Miliband, the climate change minister, tells Andrew Grice how the Government will make Britain a greener country

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The Government will next week announce a groundbreaking, legally-binding target to cut Britain's carbon emissions by at least 34 per cent by 2020 to combat climate change.

Ed Miliband, the Energy and Climate Change Secretary, told The Independent yesterday that the Government would not achieve the target by buying large amounts of "offsetting" credits – effectively paying poor countries to cut carbon on Britain's behalf. Instead, it will cap the proportion of the target that can be achieved by offsetting.

"I want to achieve as much as we can through domestic action," he said. "There will be a cap on credits from overseas. We are going to be sending a strong signal about that."

The world's first "carbon budgets" for the next 15 years will be unveiled by the Chancellor Alistair Darling in his Budget next Wednesday. He will embrace proposals by the Independent Committee on Climate Change, chaired by Lord Turner of Ecchinswell, which called in December for an interim 34 per cut in emissions from 1900 levels by 2020. Lord Turner said the figure should rise to 42 per cent if a new global deal on emissions was signed at crucial talks in Copenhagen this December.

Ministers are also likely to implement Lord Turner's proposals to ensure "deep domestic emissions cuts" by limiting the amount that could be achieved through offsetting. He proposed that less than 10 per cent be met by offsets outside the European Union if the target is a 34 per cent cut, rising to 20 per cent after a global agreement. Previously, the Government had planned to "buy" up to half of its carbon credits.

The Government is already committed to reducing carbon emissions by 80 per cent by 2050 but has not yet fixed a target for 2020. The 34 to 42 per cent target range recommended by the Turner committee was higher than expected and Mr Miliband admitted it would be "challenging".

He said: "If you are going to have the radical decarbonising of 80 per cent by 2050, we need to take action early. There are industrial opportunities to taking action early."

Mr Miliband added: "This is a very important moment. It is a world first. A Budget which is a financial Budget but also has legally binding carbon budgets that we will have to stick to. It is an extraordinary transformation. It is a massive greening of the Government, part of the change in culture we need. We are leading the world."

"Carbon budgets" covering 2008-12, 2013-17 and 2018-22 will be approved by Parliament by 1 June. Detailed policies to ensure the ceilings are not breached will follow this summer.

Mr Miliband accepted that would require "dramatic and profound change" in the areas outlined by the Turner report – greater regulation of power plants and cars and more financial incentives to encourage people to use energy efficient goods. He wants "clean coal", using carbon capture and storage, to play a part and will announce a review later this month.

The Climate Change Secretary admitted it could cost 1 per cent of GDP – about £15bn – to hit the 2050 target. "There is no question that there are costs to our economy and our society of acting. But the costs of not acting are greater than the costs of acting."

Resulting higher consumer energy bills could be reduced by "a revolution in energy efficiency", he said, adding: "It is illusory to think that there is a 'high carbon, carry on as we are' future."

Mr Miliband said: "The events of the last year do signal a move to a more active industrial policy by this government. Financial services is an important part of our economy. But we do need to prepare for, invest in and intervene to have the industries of the future located in Britain. A green industrial revolution will happen. The question is whether Britain is going to be at the forefront of it.

"Climate change is a very very big threat to our way of life. We have got to do more to bring that home to people. At the moment, people think it is happening, they accept the science, but they probably think it is going to happen to someone else. We do have a duty to say to people it is going to happen to future generations in this country if we don't take action." But Mr Miliband does not want to rely on threats. "There are positive opportunities – industrially, for the transport system, air quality – a whole range of issues where can say going green means a better quality of life for our country," he said.

He wants to encourage a "popular movement" on climate change to push world leaders towards a deal in Copenhagen, admitting the politicians cannot do it by themselves. He will issue a "manifesto", including a slimline guide for the public, ahead of the December summit.

Although success will not be easy, he is optimistic, saying the election of President Barack Obama provides a "unique window of opportunity".

The US Environment Protection Agency (EPA) announced yesterday that it will regulate carbon dioxide emissions, deciding after a review of scientific research that it and five other greenhouse gases pose a serious risk to health. The move marks a major change in policy to that of the Bush administration.

Alistair Darling's forthcoming Budget could also include incentives for offshore wind farms, because the drive for renewable energy has been stalled by the credit crunch. Mr Miliband is "sympathetic" to pleas by the industry for help. "If we want to be at the forefront, it is important to nurture the renewables sector through this difficult time," he said.

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