BRITAIN’S greenhouse gas emissions are 12% higher than claimed by Labour, according to an investigation by the National Audit Office (NAO). The report could undermine Gordon Brown’s claims to be creating a low-carbon economy.

The NAO analysis, published this weekend, says Labour’s figures exclude aviation, shipping, British businesses operating abroad and emissions caused by Britons holidaying overseas. This makes Britain’s emission figures seem artificially low.

It also warns taxpayers face a £5 billion bill from 2010 to 2020 because government failures in meeting greenhouse emissions reduction targets mean it will have to buy carbon credits from overseas.

The government has claimed that in 2005 Britain generated greenhouse gases equivalent to 656m tons of carbon dioxide (CO2). The NAO report suggests the real figure is closer to 733m tonnes. It also contradicts Labour’s claims that CO2 emissions have fallen 6.4% since 1990.

This weekend Peter Ainsworth, the Conservative shadow environment secretary, accused the government of “Enron-style accounting” and said he would raise the issue during debates on the Climate Change Bill in parliament this week.

The NAO conducted the probe following concern over the way in which the government maintains two sets of accounts to measure changes in greenhouse gas emissions.

The figures quoted publicly by Brown and other ministers are all drawn from the so-called Kyoto accounting system, allowing the government to claim the lower emissions figure.

The term “equivalent” is used because the figure include CO2 plus five other greenhouse gases such as methane and nitrous oxide. They are all added together and expressed in terms of CO2 equivalents for the sake of convenience.

Since CO2 is the most important greenhouse gas, the government often focuses on it alone.

The NAO report points out, however, that the Office for National Statistics (ONS) maintains its own environmental accounts which measure the same gases but use stricter Treasury accounting rules.

The NAO report states: “For 2005 the environmental accounts reported total greenhouse gas emissions equivalent to 733m tonnes of CO2.”

Referring to CO2 alone, it added: “Our figures demonstrate that there have been no reductions in UK CO2 emissions if measured on the basis of the environmental accounts.”

Dieter Helm, professor of energy policy at Oxford University, said: “It makes no sense to exclude shipping and aviation from the figures for Britain’s emissions. They are vital parts of the British economy which are growing fast.”

The NAO is particularly concerned about the government’s decision to abandon targets for cutting domestic emissions and to rely instead on carbon credits purchased from overseas.

Last week the House of Lords passed an amendment to the Climate Change Bill to prevent the government using carbon credits to meet more than 30% of its carbon reduction targets. The government plans to reverse this amendment.

Is cutting emissions worth the cost to the taxpayer? Post your thoughts below

Times recommends

• Prince Philip attacks big families
• Take a dip in Dubai-on-Thames
• Eco Worrier: How can I persuade my husband to use a push mower?