Britain is to enact the toughest laws on carbon emission in the world to reduce its impact on global warming, the Government announced yesterday.

The UK will be the first country to impose legally binding five-year limits on carbon emissions as ministers aim to set an example to the world on how to beat climate change.

Tony Blair declared the proposals a “revolutionary step” as he unveiled the draft Climate Change Bill yesterday to an audience of teenagers at Downing Street. He said that the legislation would strike a balance between the needs of the economy and the requirement to limit the environmental and social havoc likely to be wreaked by climate change over the next century.

The proposals were broadly welcomed by business groups, environmentalists and scientists, though there was some criticism that the Bill did not go far enough.

Among the proposals in the draft Bill are for five-year “carbon budgets” that will limit the quantity of carbon dioxide emitted nationally.

The first target will be for 2008-12 and David Miliband, the Environment Secretary, expects the Bill to receive Royal Assent by Easter next year.

The carbon budget will be set by the Government after taking advice from the new Committee on Climate Change and it will rely on a mixture of market forces, voluntary action and laws to meet targets.

Some of the mechanisms already exist, such as the Emissions Trading Scheme, or are planned, including zero-carbon housing from 2016. But others will be introduced when the need is identified.

Ministers have considerable freedom to determine where and how to impose emission limits but each carbon budget is likely to incorporate individual targets for different sectors. Levels will depend on factors such as how polluting a sector is, the technology available and the likely economic consequences.

The five-year limits are part of a rolling fifteen-year programme designed to achieve a statutory target of at least 26 per cent reduction of carbon by 2020 and 60 per cent by 2050, compared with 1990 levels.

Failure to meet the statutory targets will not result in criminal charges but, said Mr Miliband, the courts will have the power to force the Government to purchase carbon credits to reach the targets.

Aviation and shipping are to be excluded in the initial stages of the scheme but every other sector of society will be subject to the targets.The Government resisted pressure to introduce yearly targets but there will be annual reporting to Parliament on progress.

Mr Miliband said that the legislation would be an “envi-ronmental contract with future generations” and an essential step to limiting the effects of climate change.

He said that it provided a robust framework “for managing carbon and allocating responsibility” for emission cuts to turn Britain into a low-carbon economy.

“This Bill is an international landmark. It’s the first time any country has put carbon budgeting on to the legislative basis. I believe other countries will want to follow this,” he said.

Britain is responsible for about 2 per cent of carbon emissions and cannot solve climate change alone, but Mr Miliband hopes that the Bill will encourage countries such as China and India to sign up to long-term greenhouse gas cuts to ensure global temperature rises are limited to 2-3C (3.6-5.4F), in line with the Stern report.

Peter Ainsworth, the Shadow Environment Secretary, said that publication of the draft Bill was “a welcome step forward” but added that there were flaws. Calling for targets to be set annually by experts rather than politicians, he said: “There is a danger that the five-year approach will enable responsibility for failure to be shunted on from one government to another.”

Richard Lambert, the Direc-tor-General of the CBI, welcomed the aim of giving long-term policy assurances and the flexibility the Bill allows the Government in deciding how and where action must be taken. Tony Juniper, the director of Friends of the Earth, which campaigned for a Climate Change Bill, was “delighted” at the prospect of carbon laws but was disappointed that the aviation and shipping industries are to be exempt from the legislation.

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