The UK’s Climate Change Bill now looks certain to become law after MPs voted overwhelmingly in favour of the landmark legislation.
MPs cleared the Bill with a huge majority after ministers moved to include greenhouse gas emissions from international aviation and shipping in carbon cutting targets.
The inclusion of the two industries represented a u-turn for the Government following a campaign by environmentalists and a threatened Labour rebellion.
Climate Change Minister Joan Ruddock said: “We agree that action to reduce emissions from international aviation and shipping will be vital to global efforts to tackle climate change.”
The Government agreed those emissions should “either be included in the Bill’s targets and budgets ... or an explanation should be laid before Parliament explaining why this has not been done”.
Tory spokesman Gregory Barker said: “We warmly welcome the Government’s change of heart and measured response to include emissions from international aviation and shipping in the Climate Change Bill.”
The Bill, which makes the UK the first country to commit to legally-binding national targets to cut emissions, will commit the Government to an ambitious target of reducing emissions by 80 per cent by 2050.
It also requires the Government to publish five-yearly “carbon budgets” capping pollution from this year.
Additionally it contains powers to establish emissions trading schemes, require retailers to reduce plastic bag use and for the controversial “pay-as-you-throw” rubbish pilots which aim to cut the amount of waste generated by households.
The law would also bring in mandatory reporting requirements on carbon emissions from 2012 for large and medium-sized companies, but it does not define how big a company should be to be classed as a medium-sized company.
But ministers plan to work out how this should be implemented and may introduce a voluntary scheme if considered more effective.
The Government also announced plans to install gas and electricity “smart meters” in all homes by 2020.
Smart meters allow two-way communication between user and supplier and can display information such as daily usage and the cost of energy used.
Energy Minister Lord Hunt of Kings Heath said: “No other country in the world has moved to an electricity and gas smart meter roll-out on this scale.”
The Government had faced increasing calls to strengthen the Bill ahead of it becoming law – and has bowed to pressure to amend the legislation in several areas.
This month the Government’s climate change committee, set up as part of the Bill to advise ministers on reducing emissions, backed the long-standing view of environmentalists on key issues.
The committee, chaired by Lord Turner, recommended the Bill’s long-term target to cut emissions by at least 60 per cent of 1990 levels by mid-century should be upped to 80 per cent.
It also said the figure should include all the six major greenhouse gases – not just carbon dioxide – and all sectors including aviation and shipping.
In response, Energy and Climate Change Secretary Ed Miliband announced the Government would amend the Bill to include the tougher 80 per cent target.
Environmental groups hailed the Bill, welcoming the decision to include international flights and shipping.
Friends of the Earth executive director Andy Atkins said the move was the final part of the jigsaw and would mean “the world’s first climate change law will also be a world-class climate change law”.
Conservation campaigners WWF congratulated the Government for its “ambitious piece of legislation” which sets the UK up as a world leader on climate change.
But WWF chief executive David Nussbaum urged the Government to ensure at least 70 per cent of the emissions cuts take place in the UK – and are not bought in through “offsets” from schemes abroad.