Environmentalists warn that emissions targets are out of date
If they can actually do it, the government's pledge to cut global warming emissions by one third in just over a decade should transform the way the UK economy works.
However, critics warned that the cuts would still not be enough to avoid dangerous climate change, and warned that other spending pledges were not nearly enough to meet the target.
Darling has now promised to cut greenhouse gases by 34% by 2020 through so-called carbon budgets, which fix binding limits on greenhouse gas emissions over five-year periods. The 34% target is in line with the advice of the government's independent watchdog, the Committee on Climate Change. "This represents a step change in the UK ambition on climate change," said the budget report.
The budget report said the government "aims" to do this without purchasing controversial carbon credits from cuts made in other countries, but said these "offsets" could be a "fallback option". It also said the target cut would be higher if there was "satisfactory" global agreement on cutting emissions, but stopped short of committing to the higher 42% cut recommended by the CCC in those circumstances.
"These budgets give industry the certainty needed to develop and use low carbon technology – cutting emissions, creating new businesses and jobs," said the chancellor.
Nobody expected the government to reject the emissions targets put forward by its watchdog, which are designed to help reach a promised reduction of 80% by the middle of this century.
However, the formal announcement makes the UK the first country in the world to set legally binding targets.
Environmental campaigners and business groups commended the government on committing itself to firm targets. However, there were immediate warnings that not enough was being done.
Friends of the Earth, the charity which led a mass public campaign for the Climate Change Act which created the targets, said the 34% cut was no longer enough.
"Setting the first ever carbon budgets is a ground-breaking step - but the government has ignored the latest advice from leading climate scientists and set targets that are completely inadequate," said Andy Atkins, the organisation's executive director. "A 42% cut by 2020 is the minimum required if we are to play our part in avoiding dangerous climate change."
There was also widespread criticism that the rest of the budget did not include enough money for renewable energy like wind and tidal power, and energy efficiency for homes and other buildings. The budget also promised up to four "demonstration" projects for carbon capture and storage for coal and gas power plants, and £60m of new spending on research and development of the unproven technology, but critics said these partial capture schemes were not enough if the government goes ahead with plans for up to eight new coal plants.
James Cameron, vice-chairman of Climate Change Capital, a low-carbon investment fund with more than US$1.5bn (£1bn) under management, said: "The idea of a carbon budget is to be applauded and must become a permanent feature of how we direct our economy. But the reality is that creating a low carbon economy requires more than high-level commitment. The scale of investment required is huge, and thus far the commitments to stimulate the economy and reduce emissions have been small gestures, albeit in the right direction. They have identified the correct areas to be targeting with strategic intervention but the orders of magnitude are much too small."
The budget report said a full strategy on how the targets will be met is due this summer, but that the "latest government modelling" showed it was on course to meet the 2020 and two interim targets.
"The strategy will strengthen the long-term policy framework, taking into account recent consultations on heat and energy saving, renewable energy and zero carbon homes," added the report.