Government unveils sweeping plans to transform UK into low-carbon economy

The low-carbon transition plan covers all sectors, from home insulation and generating power, to electric cars and high-speed trains

• Alok Jha, green technology correspondent
• guardian.co.uk, Wednesday 15 July 2009 15.32 BST
• http://www.guardian.co.uk/environment/2009/jul/15/government-low-carbon-plans

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The government has unveiled detailed plans for transforming the UK to a low-carbon economy and meeting its targets for reducing greenhouse gas emissions.

The measures, which touch on all aspects of life, from home insulation and power generation to electric cars and high-speed trains, are designed to achieve emissions cuts of 34% by 2020 compared with 1990 levels.

Under the plans, which are projected to create 1.2m "green jobs", every government department will be required to meet a carbon budget alongside its financial budget. The announcement is the first time the government has laid out in detail where the carbon axe will fall and how much each department will be expected to cut.

Miliband warned, however, that domestic energy prices would rise in 2020 to pay for some of the required changes. He hoped this would be offset with energy efficiency savings in 7m homes and financial help for the poorest consumers.

"The proposals published today are the first time we have set out a comprehensive plan for carbon across every sector – energy, homes, transport, agriculture and business," said Miliband. "Our transition plan is a route map to 2020. It strengthens our energy security, it seeks to be fair in the decisions we make, above all it rises to the moral challenge of climate change."

In the government's white paper on energy and climate, called the UK Low Carbon Transition Plan and published today, half of the proposed carbon cuts to 2020 would come from changes to the power sector, 15% from making homes more efficient, 10% from workplace improvements, 20% from changing how we travel and 5% from agriculture and land use.

This means that 40% of UK electricity by 2020 will come from low-carbon sources including renewables, nuclear and clean coal. The white paper also launches consultation on the details of the government's feed-in tariff, re-named the "clean energy cash-back" scheme, which will pay people and businesses a premium for generating low-carbon electricity. A similar scheme for renewable heat will follow in April 2011.

The white paper details plans for a "pay as you save" scheme for homeowners to receive loans to insulate their homes, with money repaid by savings in energy costs.

Philip Sellwood, chief executive of the Energy Saving Trust welcomed the scheme. "People tell us that the biggest barrier that stops them from making their homes more energy efficient is the need to find money to pay for the up-front costs. Our research shows that householders are more likely to make larger investments, including micro-generation and solid-wall insulation, if the costs can be spread through the savings they make on their energy bills."

Other measures in the white paper and the industrial and transport strategies, also published today, include:

• Up to £6m to start development of a "smart grid", including a policy road map next year.

• Launch of the new Office for Renewable Energy Deployment in the Department of Energy and Climate Change (DECC) to speed up the growth of renewables in the UK.

• DECC to take direct responsibility from Ofgem for establishing a new grid access regime within 12 months.

• Up to £180m would be made available to promote wind and tidal power – this includes setting up a low-carbon economic area in the south-west to promote marine technologies and money for up to 3,000 wind turbines off the UK's shores by 2020.

• £15m to establish a Nuclear Advanced Manufacturing Research Centre that will develop the next generation of nuclear power infrastructure.

• £10 million will go to improving infrastructure for charging electric vehicles.

• Challenging 15 villages, towns or cities to be test-beds for piloting future green initiatives.

The shadow energy secretary Greg Clark welcomed the white paper, which he said was familiar since much of it borrowed from Conservative policy. "Over 12 years we have had 15 energy ministers, but no energy policy. Does [Miliband] recognise that while other countries have spent the last decade diversifying their supplies of energy, Britain has become even more dependent on imported fossil fuels – threatening our energy security, our economic competitiveness, and our climate change objectives?"

He added: "The secretary of state stands in a position of great moment. He must decide whether he breaks with the past and implements rigorously the measures that both he and I know are needed, or whether the next six months will prove, like the last 12 years, to have been a time of opportunity lost."

John Sauven, executive director of Greenpeace, said: "If this plan becomes a reality, it will create hundreds of thousands of green jobs and make Britain a safer and more prosperous country. This will be good for the British economy and, in the long-run, save householders money as we reduce our dependence on foreign oil and gas. Ed Miliband appears to be winning important battles in Whitehall. But it's crucial that these plans now get full cross-party support and more backing from the chancellor. The renewable energy industry is too important to become a political football and this strategy for green jobs deserves more than the current paltry sums being offered by the Treasury."