The Government will not weaken emissions targets, according to Energy Secretary Ed Davey, despite reported pressure from the Treasury.
Davey said the 'fourth carbon budget', governing emissions from 2023 to 2027, would remain as it was set in 2011 by his predecessor, Chris Huhne, effectively requiring a 50 per cent greenhouse gas cut on 1990 levels.
The Energy and Climate Change Secretary’s decision was backed by environmentalists, who had claimed that Chancellor George Osborne wanted to weaken the budget due to concerns the target would make the UK less competitive than EU rivals.
Ministers had been under pressure from the Government's own climate advisers to maintain the target, with the Committee on Climate Change (CCC) warning last year there was nothing to "justify a lowering of ambition" and if anything, the plan should be tightened.
Davey said he had also listened to the "vast majority" of businesses, investors and environmental groups who had told him that any change to the budget would be unjustified, deter investment and undermine efforts to secure a global deal on climate change.
He said: "The fourth carbon budget, which caps the UK's emissions, will not change. It covers 2023 to 2027, and will cement the UK as a global leader in combating climate change in an affordable way.
"We are increasingly seeing other countries who recognise our shared responsibility to tackle climate change join us in ambitious action.
“We are close to a new EU climate deal that would cut emissions by 40 per cent across Europe by 2030 – meaning that there would be a level playing field for British business and industry with our biggest trading partners when it comes to cutting emissions.
"In reviewing the fourth carbon budget, I was reassured by the vast majority of business groups, investors and environmental groups who agreed that any change would be unjustified, would deter investment and undermine our efforts to get a global climate deal in 2015."
He added that support for energy intensive industries, set out in the 2014 Budget, underlined the Government's commitment to protecting the competitiveness of UK business.
The announcement was the culmination of a promised review of the target in 2014, which raised the possibility it could be relaxed if Europe was not making similar efforts to tackle climate change, but Davey said current estimates showed UK and EU levels of ambition for tackling climate change were likely to be extremely close during the mid-2020s.
The review was announced in 2011 when the Government agreed to accept the recommendation of the CCC to effectively halve emissions by 2025, following wrangling in Cabinet over the goal. The five-year carbon budgets aim to put the UK on track to meet its legally binding long-term goal of an 80 per cent emissions cut by 2050.
But in its latest progress report to Parliament earlier this month, the CCC warned that the UK was not on track for the mid-century goal and would fail to meet the fourth carbon budget target without stronger and more ambitious policies.
In response to the announcement, David Nussbaum, chief executive of WWF-UK, said: "Looking ahead, we need the next Government – of whatever political complexion – to ensure policies are in place to attract the significant investment in low-carbon infrastructure needed in the coming decade to meet the emission cuts set out in the budget."
Gareth Stace, head of climate and environment policy at EEF, the manufacturers' organisation, backed the Treasury's review of the target to make sure the UK could meet it at least cost and while rebalancing the economy towards manufacturing.
He said: "We support the Government's decision today, but would urge that future targets must emanate from clearer strategies for how each sector of the economy will contribute to meeting our shared goals.
"Concern remains about calls for an increased EU 2030 target whilst the Committee on Climate Change is already warning of a major policy gap in achieving our targets as they stand."
Nicola Walker, director for business environment at employers organisation CBI, said it was sensible to maintain the fourth carbon budget at this point. "The priority now must be to ensure a successful conclusion to negotiations across Europe on a robust but credible emissions reduction target so that our climate ambitions are aligned," she added
Chairman of the Parliamentary Energy and Climate Change Committee, Tim Yeo backed the decision, saying there was "no sound economic or scientific basis" for reducing UK ambition to cut action on climate change.
"I congratulate the Government on resisting the calls coming from some quarters to downgrade the ambition of the UK's carbon budgets.
"Doing so now would have sent out the wrong message to the international community just when the US and China appear to be taking positive steps towards agreeing a deal in 2015 to limit emissions.
"It would also have sent a confusing signal to energy investors and businesses at a time when the UK cannot afford any delays in upgrading our energy infrastructure and replacing aging and dirty power stations with cleaner forms of power like nuclear and renewables."