Image for As Australia dithers or denies UK pledges to halve carbon emissions by 2025

As Australia dithers or denies the UK announces the most ambitious targets on greenhouse gases of any developed country.

The UK is to put in place the most ambitious targets on greenhouse gases of any developed country, by halving carbon dioxide emissions by 2025, after a tumultuous week of cabinet rifts on the issue.

Agreeing the targets took weeks of wrangling among ministers, but late on Tuesday afternoon the energy and climate secretary, Chris Huhne, announced to parliament that the “carbon budget” – a 50% emissions cut averaged across the years 2023 to 2027, compared with 1990 levels – would be enshrined in law.

Connie Hedegaard, the European Union’s climate change chief, hailed the outcome as “very encouraging” and “an example” to other countries, which she said showed that countries could pursue economic growth while cutting emissions. “This is a recognition that to be very ambitious on public spending [cuts] does not mean you can’t be ambitious on climate change targets,” she told the Guardian.

David Kennedy, chief executive of the Committee on Climate Change, the government advisory body that proposed the target, said: “This is going to deliver higher [economic] growth for the UK. It could well give us lower electricity prices in the future than our competitors.”

But some businesses reacted angrily to the news, arguing that going further than other countries in cutting carbon would damage the competitiveness of British Industry. Terry Scuoler, chief executive of EEF, the industry body for the UK’s manufacturing sector, said: “This is a bad decision for manufacturing.”

Huhne – currently at the centre of claims he persuaded someone else to take speeding penalty points on his behalf – said the government would produce plans later in the year laying out ways to compensate energy-hungry businesses for any competitive disadvantage. The policies necessary to meet the new carbon targets will be set out in October.

Fears that ministers would reject the Committee on Climate Change’s proposals for pollution limits in the fourth “carbon budget” had prompted an outcry from environmentalist groups.

The carbon budget runs from 2023 to 2027, part of efforts to meet legally binding emissions cuts of 80% by 2050, and will put the UK on target for 60% cuts by 2030. There will be a review of the budget in 2014, under a compromise.

The chancellor, George Osborne, Phillip Hammond, the transport secretary, and the business secretary, Vince Cable, were against the so-called fourth carbon budget, and secured the review of the ambitious targets should other EU countries fail to match them.

Environmentalists believe the timing of the 2014 review, shortly before an election, would make it difficult for the Conservatives to weaken the targets. The Climate Change Act also stipulates that the plans can only be changed in response to external circumstances.

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