Alan Simpson: A welcome development - but it barely scratches the surface

The launch of the Government's draft Climate Change Bill, along with David Cameron's announcements from the Tories, should both be welcomed for their profile if not their depth. Neither scratches the surface of what we need to do and the urgency of setting ambitious targets right from the start.

There has been an institutional reluctance rooted deep inside the Treasury to block anything that looked as though it was going to set binding annual targets. This is the "mindset" problem the Government now faces. The more David Miliband wants to run with the issue, the more Gordon Brown slams on the brakes. The most serious issue of our time then gets locked into the politics of confusion and cowardice.

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Parliament will have to set a minimum target of 3 per cent carbon savings a year. A rolling five-year programme should not be a problem because we're probably going to have to double this percentage in the early years just to break even when the going gets harder. The secret of getting there is to stay focused on the big picture not the small one.

The UK obsession with emissions trading and carbon offsetting is no more than a flirtation with Mickey Mouse economics and Donald Duck accounting. If carbon trading was going to work, it would only be on the basis of a carbon allocation to every citizen. The current approach is bonkers. It gives credits to those who pollute, and none to those who do not. It creates a fictional commodity that then gets traded speculatively. Bankers love it, not least because they take between 8 per cent and 30 per cent for handling the transactions. Everyone else in the real economy hates the idea because it creates a volatile and insecure market against which you are asked to make investment decisions. For the public, it is simply a turn-off.

There is a much better approach. In 1956 Britain introduced the Clean Air Act. We didn't mess about with soot-trading or breathing credits. We just told industry it had to change to smokeless fuel. There were claims that the economy would collapse, but it never did. And today's economy won't collapse if we make the shift into renewables.

Alan Simpson is a Labour MP