The draft Climate Change Bill shows the Government is learning some lessons from the failure to meet its 2010 carbon dioxide reduction targets, the Environmental Audit Select Committee concludes in its Seventh Report of Session 2006-07, Beyond Stern: From the Climate Change Programme Review to the Draft Climate Change Bill published on 30 July. However the Committee warns that very significant issues remain, commenting that the Government's policy towards the UK's 2050 target is clearly incoherent - while the Government remains committed to limiting global warming to a rise of 2oC; it also acknowledges that, according to recent scientific research, a cut in UK emissions of 60% by 2050 is now very unlikely to be consistent with delivering this goal. The Committee are calling for further action by the Government as a matter of urgency:

• The UK's targets for 2020 and 2050 must be significantly toughened;

• The proposed Committee on Climate Change must be given a stronger role, including a duty to audit the Government's emissions figures;

• International aviation and shipping emissions must be included within the UK's targets;

• Use of international carbon credits should be strictly limited and transparently reported; and

• Government must focus more on the total amount of carbon emissions the UK can "safely" emit over the next forty years, rather than on simply hitting annual emissions targets in individual target years.

The Chairman of EAC, Tim Yeo MP, said: "This report reveals a number of weaknesses in the Government's climate change policy. Carbon-saving measures have not delivered as much as predicted, and forecasts of future emissions have consistently drifted upwards. To make things worse, these forecasts have not been updated often enough, which means that by the time Ministers knew the UK's 2010 CO2 target was significantly off-track it was too late to do much about it.

The draft Climate Change Bill shows the Government has been learning from its mistakes. Enshrining carbon targets for 2020 and 2050 in law, with a series of five-year carbon budgets beginning in 2008, should help to focus on delivering emissions cuts in the short, medium, and long term. Rigorous annual reports to Parliament should ensure that the Government is quicker to respond when progress starts to slip. Most importantly, the creation of an independent Committee on Climate Change should provide expert scrutiny, and help to depoliticise the consideration of potentially controversial measures.

But four enormously significant issues remain. The 2020 and 2050 targets need to be significantly strengthened, in accordance with the latest science of where we need to be to limit global warming to 2oC. Our share of international aviation and shipping emissions can and should be included in the UK's targets immediately. And the use of international carbon credits must be limited and transparently reported - and not be used as an excuse for inaction at home. Finally, alongside the proper continuing focus on cutting annual emissions, far more attention must be paid to the rise in greenhouse gas concentrations in the atmosphere."

The report draws on two specially commissioned studies by the National Audit Office. It looks at the lessons to be learned from efforts to meet the UK's domestic target of reducing CO2 by 20% by 2010 (which looks set to be missed by a significant margin), and asks whether the recent draft Climate Change Bill will help to put things right for the future.