Cambridge Econometrics predicted carbon dioxide emissions will fall by around three per cent a year in 2009 and 2010 as a result of less economic activity and more use of gas instead of coal to produce electricity. However the continued reliance on coal and gas-fired power stations will mean emissions fall more slowly over the long term. In addition the twice-yearly UK Energy and the Environment report found the Government will not meet its targets to increase electricity from renewables. The “ambitious” EU goal for the UK to produce 15 per cent of all energy from sources such as wind power and biomass by 2020 is set to be missed by a “wide margin”, the analysts said. A separate report from the UK Energy Research Centre (UKERC), based on 500 international studies, said Britain lagged behind other countries in the use of cleaner modes of travel. It added that there was short-term potential in improvements to bus, cycling and walking infrastructure, car sharing or school travel plans. But the report stressed that the biggest long-term impact would come through altering travel patterns so that fewer trips relied on the car.

The reports come as the Chancellor Alistair Darling lays out the first three five-year “carbon budgets” for reducing emissions and the target for cuts by 2020 alongside the Budget on Wednesday. The targets are expected to follow the recommendations of the Committee on Climate Change but fall well below the 42 per cent target recommended by environmentalists. Friends of the Earth wants at least £30 billion to be invested each year to deliver a low carbon recovery. The group is calling for a green investment bank and Treasury- backed green bonds as well as investment in green energy schemes and preventing energy waste.

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