The EAC said the government is “pursuing contradictory policies” by stating a commitment to ambitious action on climate change – such as a European 40 per cent emission reduction target – whilst still “giving subsidies for fossil fuels”.
Energy minister Amber Rudd told the committee that while “there are various subsidies for various elements of fossil fuels” to ensure security of supply the government is “focused on renewables as a replacement as far as possible”.
However, in the 2014 Autumn Statement, Chancellor George Osborne unveiled further tax breaks for oil and gas exploration, including “an immediate 2 per cent reduction in the rate of the supplementary charge, from 32 per cent to 30 per cent, taking effect on 1 January 2015”.
EAC chair Joan Walley said the UK government “appears to be actively encouraging unsustainable development” and that “it is time we put the break on tax breaks and subsidies for the fossil energy fuelling climate change”.
She added: “The UK must not risk undermining the sustainable development goals due to be agreed next year. Ministers must also get our own house in order.
“The government has made significant commitments to international development and climate funding, but this will only be a sticking plaster if we don’t take serious steps to transform our own economy and work with others to do the same.”
The EAC report also states that the “enormous potential” of community energy has been “undermined” by the Financial Conduct Authority (FCA) deciding not to register new community energy co-operatives.
The Department of Energy and Climate Change (Decc) told the committee it wants to “strike the right balance” between consumer and investor protection and “realising the full potential of community energy”.
The EAC says to achieve this, the FCA needs to make it easier for community groups to register as energy co-operatives and that the government needs to “clearly set out the steps it is taking to achieve this”.