Coalition 'united on carbon cuts'

Deputy Prime Minister Nick Clegg has dismissed claims of rifts within the coalition Government over its commitment to cutting carbon emissions, as he unveiled a £100 million investment in energy efficiency.

Speaking to an energy conference in London's Lancaster House, Mr Clegg insisted ministers were "unreservedly committed" to helping the low-carbon sector, declaring "no-one in Government" wanted to ditch the programme to decarbonise Britain's economy as part of the fight against climate change.

Mr Clegg told an audience of business figures that the UK was "leading from the front" in a global revolution towards cleaner sources of energy.

He announced a £100 million contract by UK Green Investments with fund managers Equitix and SDCL to provide initial funding to encourage foreign and domestic investment in non-domestic energy efficiency.

Many environmentalists were dismayed by Chancellor George Osborne's comment to last year's Tory conference that, while the Government would invest in green energy, "we're not going to save the planet by putting our country out of business".

The Treasury is understood to have demanded cuts of 25% in subsidies for onshore windpower in a tussle between Mr Osborne and Liberal Democrat Energy Secretary Ed Davey, which ended last month with a 10% cut but question marks hanging over the 2030 target for decarbonising the economy.

Mr Clegg, however, sought to play down the spat as part of the "internal discussions and debates on the balance and sequencing of different policies" that are a normal feature of any government.

The Government was warned that progress on technology to capture carbon emissions from fossil fuel power stations and store the gas permanently underground - a process known as carbon capture and storage (CCS) - was falling behind. Carbon capture and storage is seen as a key element in decarbonising the energy system, but has yet to be demonstrated at a commercial scale.

A Government project to fund up to £1 billion for a commercial scale scheme in the UK had to be restarted after the only scheme left in contention for the money, Longannet power station in Scotland, fell through.

Graeme Sweeney, special adviser to oil giant Shell on carbon dioxide who is speaking at the conference, urged the Government to reinforce its commitment to the technology, saying: "The harsh reality is that the growth in CCS is falling behind. Urgent and decisive action is needed to ensure CCS is a commercial option in the future for society to reach decarbonisation goals."