Vince Cable has refused to support new carbon reduction targets recommended by the Committee on Climate Change
The business secretary, Vince Cable, has clashed with his Lib Dem cabinet colleague Chris Huhne by telling him he will not support carbon reduction targets recommended by the government's independent climate change advisory body.
David Cameron will decide next week whether to accept the proposals by the Committee on Climate Change for a fourth carbon budget, covering the years 2023 to 2027, championed by Huhne, the energy secretary.
Three carbon budgets were set in 2008 but now the UK must agree a fourth as the government attempts to cut greenhouse gas emissions by 80% by 2050, compared with 1990 levels.
In a letter leaked to the Guardian, Cable tells his party's leader, Nick Clegg, and the chancellor, George Osborne, that he is "unable to give clearance to the proposal as it stands" and calls for an urgent cabinet meeting. In his letter, dated 19 April, Cable says the proposed carbon budget is not "cost effective" and asks for a Treasury impact analysis to be made available to all involved in the decision.
He writes: "Agreeing too aggressive a level risks burdening the UK economy, which would be detrimental to UK, undermining the UK's competitiveness and our attractiveness as a place to do business.
"I have a number of concerns about supporting the CCC's recommended level at this time.
"It is important that we strike the right balance between our pursuit to decarbonise the UK economy whilst ensuring that UK economic growth and employment is sustained."
His argument rests on a concern that Huhne's plan relies on the securing of a cap on emissions trading across Europe that may not materialise. If this were not achieved, the UK would be left cutting carbon emissions unilaterally, which would risk putting industry at a disadvantage compared with outside competitors and "could lead to significant fiscal costs".
Instead, Cable argues for a weaker carbon target. "This level keeps us on course to meet our 2050 target and entails a steeper reduction in emissions than the previous government set for carbon budgets, which easily justifies our position as greenest government ever."
Insiders say the official evidence Cable points to in support of his compromise figure is a model that assumes no new investment in low-carbon energy sources until the second half of the 2020s. They are concerned Cable's solution would mean no new investment in the clean energy industry.
Cable also proposes buying "carbon offsets" to help the UK meet its carbon targets in the 2020s, instead of cutting emissions and boosting green industries in the UK.
This is opposed by some who believe the UK should change its behaviour rather than pay China or others to cut emissions elsewhere.
The CCC's chief executive, David Kennedy, told the Guardian that a decision to embrace his committee's fourth carbon budget would be "of crucial importance. It will be the key test of the government's commitment to the low-carbon agenda".
In another leaked letter, dated 17 April, William Hague, the foreign secretary, says that he "strongly supports" Huhne. He writes: "I agree that we should not reject the fourth carbon budget recommended by the Committee on Climate Change … in order to retain public support for our climate policy at home we need to be able to point to similar effort abroad. If our domestic resolve is seen to be weakening, we will lose traction elsewhere."
John Sauven, the executive director of Greenpeace, said: "The Liberal Democrats' leadership keep saying they will learn from their kicking in last week's election by putting clear water between their party and the Conservatives' right wing on issues like protecting the environment. But this letter reveals that Vince Cable is trying to water down the measures aimed at protecting the environment and boosting a green economic recovery.
"Cable's proposals would cost more and slow the modernisation of the UK's energy infrastructure so we'd lose out on new jobs and new export industries to countries like Germany and China, which are already blazing ahead of us."
"Vince Cable needs to remember the honourable roots of the Lib Dem party and the strong voice they have been for protecting the environment and stopping climate change in recent years. Now is not the time for him to abandon the principles and values of the Liberal Democrat tradition in his party."Last night an aide of the business secretary insisted that things had progressed since the 19 April letter. The aide said: "Vince supports the government commitment to be the greenest ever. He is impressed by the Committee on Climate Change's report and we're now working closely with the Department of Energy and Climate Change to finalise plans."
It is understood that Philip Hammond, the transport secretary, has also raised objections to the CCC's proposals.