John Gummer, the new chair of the climate change committee, has condemned George Osborne's gas plans. Photograph: Bruno Vincent/Getty Images
The independent Climate Change Committee (CCC) has today warned unequivocally that the government would breach the Climate Change Act if it pursues Chancellor George Osborne's plans for a surge in new gas investment.
In what will be seen as an explosive intervention in the simmering rowbetween the Lib Dems and the Chancellor over whether to include a target to decarbonise the electricity sector by 2030 in the upcoming Energy Bill, the CCC today stated categorically that "extensive use of unabated gas-fired capacity (i.e. without carbon capture and storage technology (CCS)) in 2030 and beyond would be incompatible with meeting legislated carbon budgets".
In an open letter to Energy and Climate Change Secretary Ed Davey, signed by the CCC board, including the new chair, Conservative Peer Lord Deben, the group criticises the "apparently ambivalent position of the government about whether it is trying to build a low-carbon or a gas-based power system", warning that after extensive discussions with investors and energy companies it has become clear current policy uncertainty has created a "very poor" investment climate.
The letter also criticises recent statements from DECC in support of increased gas investment, which were wrung out of the department by Osborne during long-running negotiations over the future of renewable energy subsidies.
"We are writing to express the great concern of the Committee on Climate Change about the recent Government statement "that it sees gas as continuing to play an important role in the energy mix well into and beyond 2030...[not] restricted to providing back up to renewables"," the letter states, adding that while there is an important medium term role for gas that has already been factored into the UK's carbon budgets, "unabated gas-fired generation could therefore not form the basis for Government policy, given the need under the Climate Change Act to set policies to meet carbon budgets and the 2050 target".
The letter represents a major blow to Osborne who has been campaigning for the Energy Bill to increase support for gas investment. A leaked letter from Osborne to Davey earlier this summer revealed he wants to ignore CCC recommendations for the Energy Bill to include a target requiring the electricity sector to decarbonise by 2030 as part of wider efforts to turn the UK into a "gas hub".
The letter argues this approach would be in breach of the Climate Change Act and reiterates the CCC's recommendation that the Energy Bill use secondary legislation to include a carbon target for the electricity sector of 50gCO2/kWh that would come into place from 2030 and effectively ban the use of both coal and gas fired power plants without CCS technology.
It argued such a target would provide investor certainty while also allowing "flexibility for periodic review (e.g. prior to drafting a Delivery Plan) and possible modification based on new information about technology costs, gas prices, carbon prices and feasible build rates".
The letter has the potential to spark a major political row between the Lib Dems and Osborne as the Chancellor continues to push for an increase in support for gas investment through both the Energy Bill and the government's upcoming gas strategy.
The Treasury had signalled that in return for its support for modest cuts to renewable energy subsidies earlier this summer it had insisted on a commitment to shelve the decarbonisation target.
But Energy and Climate Change Secretary Ed Davey stressed at the time that the debate about the target was still on-going, noting that the Department of Energy and Climate Change still needed to formally respond to the CCC's recommendations.
Significantly, a motion has been tabled at the Lib Dem conference that supports the target and criticises the apparent retreat from climate change policy being undertaken by Osborne and others in the Conservative Party.
The argument over the target is now likely to reach the top of the government with pressure mounting on Cameron to face down critics of the government's green policies and adopt the CCC recommendations in full.