Clegg and Davey reaffirm Coalition’s commitment to green economy

"We want to build a more sustainable economy for Britain, and for all Europe's citizens. That means sending a clear signal to business: that the EU is committed to a low carbon future," the fellow Liberal Democrats said.

And they reiterated that "moving to 30 per cent is a key commitment in the Coalition's programme." 

Making the case for the green economy, they pointed out that the global low carbon economy is worth more than £3 trillion and in the UK already supports 900,000 jobs. 

"The world's savviest states are embracing low carbon markets. We can't afford to lose out," they said. 

"That's why the Coalition has introduced a Carbon Price Floor – a minimum cost to give investors the certainty they crave. We want Europe to take a similarly tough line. In the forthcoming talks, we'll be calling for a more ambitious EU emissions target, and a set-aside of permits to strengthen the ETS (European Trading System). A Europe-wide agreement to a 30 per cent reduction in emissions by 2020 will drive up investment."

They said a more ambitious target was not only good for the environment, but good for business and that "72 major companies – including M&S, Nike, Unilever, Coca-Cola, and Google – support an agreement to cut emissions by 30 per cent.

"As many business leaders recognise, the real risk is moving too slowly, not too fast."

Clegg and Davey want to see tougher carbon penalties for businesses because a big fall in the price of carbon has reduced the incentive for firms to cut their greenhouse gases (GHG). Under the EU ETS, companies that emit high levels of GHG have to pay for each tonne of carbon they emit. But an over-supply of allowances and the recession has forced down the price of carbon. 

"In 2006 a tonne would fetch around £28. Now – thanks to the downturn, and a glut of permits – it's barely £6. That's bad for the environment: when it's cheap to pump out carbon there's less incentive for firms to go green. But it's also bad for the economy, because it makes Europe less attractive to low carbon investment," Clegg and Davey said. 

This week, senior Tories moved to block a Coalition plan to make people pay for energy efficiency improvements when they build an extension, after a media backlash that described it as a "conservatory tax". The move weakens Government plans to decarbonise the UK's building stock and reveals a growing Tory/Lib Dem split over green policy. There are around 200,000 extensions built every year in the UK and the proposed change to building regulations was going to be a key tool in encouraging take up of the Government’s Green Deal programme launching in October.