The Government has narrowly avoided losing a vote on an amendment to add a decarbonisation target to the Energy Bill.
The amendment, tabled by chairman of the Commons Energy and Climate Change Select Committee and Tory MP Tim Yeo, would have forced the Government to introduce a decarbonisation target for the energy sector by next April.
Ultimately the ammendment, signed by 50 MPs including four Tories and nine Lib Dems, was beaten by 290 votes to 267.
Introducing the amendment at today’s vote Yeo said that the Government’s plan to wait until 2016 to set its target to cut carbon emissions by 2030 was creating uncertainty amongst investors.
He said this would lead to higher energy bills for consumers, telling MPs he wanted the Government to bring forward the date for setting a target to April 1 of next year and that he also wanted the Energy Bill to be strengthened so that ministers do not avoid setting the target for energy suppliers.
Yeo said the failure of shale gas exploration to take off in the UK as it had in the US, left investors doubting whether the Government wanted to decarbonise electricity generation.
He said: "The problem with this St Augustinian coyness, this promise of possible future chastity in the matter of greenhouse gas emissions but 'Please God, not just yet', is that by 2016 many investment decisions will have been made.
"If these lock Britain into a high greenhouse gas emission future, they will either prevent us from meeting our climate change commitments, or else will lead to the construction of fossil-fuelled generating capacity which has to be subsequently scrapped.
"And 2016 is also after the next general election. Delaying a decision until then creates another needless but harmful element of doubt about the Government's true intentions. I therefore urge MPs on all sides to support this amendment.
"Doing so will remove an element of uncertainty whose presence hampers investment, increases the risk of a capacity crisis and raises electricity prices unnecessarily. This amendment will not impose on the Government today any commitments it does not already claim to embrace."
Labour MP Barry Gardiner (Brent North), a member of the Energy and Climate Change Select Committee, said one of the Government's great mistakes was not considering energy policy in the wider context of British industry.
He said: "If we look at the way in which investors are viewing the United Kingdom at the moment, we can see there is a concern over policy risk, there is a concern about what the future shape of our energy policy will be.
"Siemens, for example, told us if we wait until 2016 to set a decarbonisation target for 2030, it and many other competitors were likely to delay or cancel planned investment in the UK.
He added: "If we ignore what industry is saying we do so at our peril."
But Energy Minister Michael Fallon urged MPs not to rely on "blind faith" and vote for "decarbonisation by dogma or default".
Setting a target to cut carbon emissions before 2016 would lead to higher bills for consumers and higher costs for businesses, he said.
And a target should not be set until the Government assessed the costs of carbon capture and storage and was better placed to see what was happening in the wider economy.
"I would ask those of us here who share the responsibility of Government to be a little more careful,” Fallon said.
"Not to risk higher bills now for our hard-pressed industries and constituents. Not to force out generating plants before we have the new investment that this Bill will deliver.
“And above all not to drive up cost for those industries struggling to compete against lower energy costs abroad. Let us have economic and industrial policy that is coherent.
"An energy policy by design, not decarbonisation by dogma or by default that could only drive our industries offshore. There is a better way forward and it's in this Bill."
Tory former minister John Redwood (Wokingham) said the Government should concentrate on cutting consumers' energy bills instead of reducing carbon emissions.
He said: "People facing fuel poverty are also facing the great problem that in recent years we have had a succession of particularly cold and bitter winters, with heavy snow fall and ice, and we have had a series of cold and damp summers.
"Whilst I will not go in to the arguments about how we can measure these rise in temperatures, and how much global warming we are actually experiencing, the cruel fact of life for people facing the energy bills is that they need to use more energy because it is so cold and we have had snow and frost in May this year, at the very time when energy prices are being put up, partly by market forces and partly by deliberate act of policy by the Europeans to make energy dearer to stop people using it.
"We need to take on board that there is serious problem with people affording their heating bills."