Green plan too reliant on voluntary action-MPs

LONDON (Reuters) - Britain's drive to create a low-carbon economy is stalling, because the government is too reliant on voluntary action and the Treasury appears to regard the environment as an obstacle to economic growth, a parliamentary group warned on Monday.

Without a clear policy, Britain is unlikely to attract the billions of pounds of investment needed to develop cleaner energy sources and reduce its reliance on imported fossil fuels, the Environmental Audit Committee, a cross-party group of Members of Parliament, said.

They criticised the government for being too soft on business and relying too much on consumer demand to stimulate growth in environmentally-friendly goods and services.

"Placing no new requirements on business, the government's market-led approach is too focused on voluntary action. Relying on consumer demand to simulate the green economy will not work," the MPs wrote in their latest report on green growth prospects.

The UK's Conservative-led coalition has set legally binding targets for greenhouse gas emissions over four five-year periods to 2027, known as carbon budgets. They are designed to put the nation on track towards an 80 percent cut in emissions by 2050.

However, the government has delayed taking a decision on the introduction of mandatory emissions reporting for big business.

"Making businesses report their carbon emissions is one of the first steps we need to take on the road to a green economy, so it will be a key test of this government's green credentials," MP Joan Walley, chair of the committee, said.

"Rising global demand for commodities and fossil fuels mean that prices will continue to rise in (the) future, so it is incredibly short-sighted of the Treasury not to give business clear incentives to use resources in a smarter way," she said.

The committee report said green investment should play a key role in the country's economic recovery, but the MPs expressed concern that the Treasury sees the environment as a cost or obstacle to economic development.

It said Britain's 2012 budget announced in March had put too much emphasis on plans for new roads and increased oil and gas extraction, with little commitment to a greener economy.

But tax revenue spent on new policies to reduce emissions and create incentives for new low-carbon technologies should be regarded as a long-term investment, rather than a cost, the MPs said.

They called on the government not to eliminate "sensible" environmental regulation as part of its efforts to reduce more than 10,000 pages of regulatory guidance.

"If this process reduces bureaucracy and improves outcomes, as the government claims, then we will support it," Walley said.

"But it would be irresponsible to get rid of sensible regulations in a desperate dash for growth and we will be watching ministers very carefully on this," she added.

(Reporting by Jeff Coelho; editing by Keiron Henderson)