By Richard Black
Environment correspondent, BBC News website
The committee says that reliance on the market alone must end
The UK needs a "step change" in policies to reduce carbon emissions if it is to meet its own climate targets, government advisers have said.
The Committee on Climate Change says emissions are falling at 0.5% per year, whereas 2-3% is needed to meet targets.
The government should intervene more in the electricity industry and set up a national home insulation plan, it says.
The government acknowledged the need for a "step change," and said it was "focusing on active steps" in energy.
The committee, chaired by Adair Turner, also wants more support for electric cars, a new scheme to encourage investment in clean coal technology and streamlined planning procedures for wind farms and nuclear reactors.
"What we have proposed is achievable and affordable," Lord Turner said.
"But action needs to be taken now if we are to make our contribution to tackling climate change."
The committee's conclusions are contained in its first annual progress reports to parliament.
In July, the government unveiled its Low Carbon Transition Plan, a comprehensive set of policies to cut greenhouse gas emissions from industry, transport and consumers.
It also this year accepted "carbon budgets" - recommended by the committee - which are intended to take the country along a path to cutting emissions by 34% from 1990 levels by 2020 - with about half of the reduction coming from the power sector.
WHAT IS THE COMMITTEE ON CLIMATE CHANGE?
Independent body established under the UK's Climate Change Act of 2008
Functions as official adviser, including recommending carbon budgets
Monitors progress towards targets and reports annually to parliament
But the committee says this will not happen without a major change in policies - which must entail a switch away from reliance on market forces to encourage investment in low-carbon technology.
"Will current market arrangements and the EU Emission Trading Scheme (ETS) deliver? In our view, we don't think so," said chief executive David Kennedy.
"There's too much uncertainty for anybody to put large sums of money into low-carbon power generation and what our analysis shows is that [with existing policies] we'll get increasing dependence on gas-fired generation."
This, he said, would be undesirable from the points of view of greenhouse gas emissions and energy security, with more reliance being put on gas supplies from Russia and the Middle East.
The recession has played an important role in lowering the European carbon price to about 13 euros per tonne - too low to stimulate low-carbon investment.
"Lord Turner is absolutely right to say that we need strategic government as well as dynamic markets to deliver on our low carbon energy plans," said Energy and Climate Secretary Ed Miliband.
Ministers should accelerate plans to roll out electric cars, the committee says
"That is why we are reforming the planning system and have put in place clear programmes for delivery of renewables, nuclear and clean coal."
The committee goes somewhat further, though, suggesting that the government should consider obliging power companies to install renewables, while a carbon tax "should not be ruled out".
"We've stuck with the market for a long time - we don't think we can stick by it any more," said Mr Kennedy.
A spokesman for the Department of Energy and Climate Change (Decc) said the Low Carbon Transition Plan was aimed at achieving a "step change" in decarbonisation.
But he added: "We are not complacent, and are focused on active steps to bring on renewables, nuclear and clean coal, smarter energy use and a shift to low carbon right across the economy."
On the home front, the committee envisages a nationwide energy efficiency scheme similar in scope to the natural gas switchover of the 1960s and 70s, when fitters went door-to-door systematically equipping cookers and heaters for the new fuel.
The targets are ambitious: 10 million lofts and 7.5 million cavity walls insulated by 2015, and all 12 million non-condensing boilers replaced by 2022.
"The current arrangements whereby energy companies focus on households, sending low-energy lightbulbs though the post or targeting pensioners for cavity wall insulation - that's not how to transform a housing stock," said Mr Kennedy.
"We need a national movement... and we think people would respond, because they only stand to gain through improving energy efficiency."
In the transport sector, where emissions are rising, the committee proposes a mix of measures to improve use of existing technologies and introduce new ones.
The government should ensure that vehicles are as frugal as in the rest of the EU - currently they are not, on average - and that efficiency increases in line with European targets.
"Smarter Choices" schemes to reduce travel and encourage public transport and cycling should be rolled out across the country, while road pricing should not be ruled out.
In 2020, one-sixth of new cars purchased could be electric - but only if the government encourages the installation of charging points, and supports purchasing of new electric cars by about £5,000 per vehicle for the next five years.
Lord Stern, who led the 2006 government-sponsored review on climate change economics, said the committee's report was "a fine piece of work, which should be supported across the political spectrum and will enhance the UK's role in fostering global understanding and agreement".
Environmental groups also approved the call for a step change, and called on the government to listen.
"Crucial strategies on fossil fuels, aviation and energy infrastructure, due out shortly, will demonstrate whether or not the government has heeded the committee's warnings," said Friends of the Earth UK executive director Andy Atkins.