Isra-Mart srl : carbon budget review in 2014 is not a get-out clause, says Barker

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Climate change minister Greg Barker has denied that reviewing the government's ambitious fourth carbon budget in 2014 represents a "get-out clause" secured during inter-departmental horse-trading.

Reports had suggested that the Department for Energy and Climate Change (DECC) ensured backing for halving emissions by 2025 and effecting a 60 per cent cut by 2030 by promising concessions to a sceptical Treasury and Department of Business, Innovation and Skills (BIS).

Both departments were concerned the deep cuts would damage the economy, and Barker admitted to BusinessGreen that the package of measures announced by energy and climate change secretary Chris Huhne yesterday had been subject to "strong stress-testing".

Once set, the budget can only be changed if external circumstances shift and after consulting the Committee on Climate Change. However, no cap will be set for the EU's emissions trading scheme (EU ETS) after 2020, which is the only relevant action that could force a change to the budget.

Barker therefore insisted reviewing the UK's progress against the EU's carbon-cutting efforts in early 2014 did not constitute a get-out clause and should not undermine investor confidence.

"There's no clause. These measures were thrashed out in government and the package we came to was all the better for that," he said. "This is an ambitious and important policy shift. It's unsurprising it was subject to strong scrutiny [but], as a result, we can be confident we're taking the right steps for the economy as a whole."

He added that there is now "buy-in right across the cabinet to the package announced today. I think BIS are as happy as DECC with this package."

The climate change minister went on to say that the long-term commitments offered investors security they had not previously experienced and would ensure UK businesses could compete in the global marketplace.

"This is a very transparent set of measures and provides great certainty to business and longevity to allow long-term investment to flow," he said. "The investment horizon for those looking to invest in low-carbon technologies in Britain has shifted."

The government has come under sustained criticism from renewable energy industry figures. It has been claimed that decreasing payments under the feed-in tariff scheme and establishing a green investment bank that cannot borrow additional funds until 2015 have undermined investor confidence.

The Energy and Climate Change Committee was also hugely disparaging of the government's electricity market reforms, reporting that the measures proposed to attract investment in low-carbon generation were over-complex, expensive and fell short of the changes required.

But Barker defended the government's record, claiming that its policies were necessary to ensure the country met its renewable energy targets.

"Any change in the short term will cause concern, but we had to face the fact that we were at the very bottom of the European renewables table," he said. "With that trajectory, we would have failed to meet our 2020 targets. So we could either take steps to repair and shift to a more ambitious trajectory, or maintain the status quo and fail to meet the targets."