Climate targets to hit household bills

By Nina Chestney and Peter Griffiths

LONDON (Reuters) - Households could face big rises in their energy bills under plans to reduce the role of fossil fuels and cut planet-warming greenhouse gas emissions by more than a third by 2020, Britain's chief climate change adviser said on Monday.

The Committee on Climate Change said the price hike could push more than 1.7 million houses into fuel poverty, when families spend more than a tenth of their income on energy to keep warm.

Warnings of higher fuel bills come as Britain faces a deepening recession, with rising unemployment and plummeting house prices.

"I cannot deny that there will be higher electricity and gas prices," Committee Chairman Adair Turner told Reuters. "But that adverse impact can be offset by energy efficiency improvement subsidies."

Such subsidies could include discounted fuel bills for people on low incomes and grants to pay for energy-saving home improvements.

Bills would rise because companies have to invest significant amounts in renewable energy sources and meet higher carbon prices, Turner's first report to the government said.

Energy and Climate Minister Ed Miliband has already accepted the committee's proposal to sharpen a binding national target to cut greenhouse gas emissions by 2050, to an 80 percent cut from 60 percent.

He said he would study the report further before responding to its recommendations.