Despite rock bottom trading prices, the European Parliament is determined to make a go of the carbon emissions trading scheme despite less than wholehearted support from the UK.

The headlines are screaming. The European carbon emissions trading scheme (the EU:ETS) is in an “existential crisis”. According to the Economist magazine, its allowances are now “below the level of junk bonds”. A New York Times editorial crows that Europe has conceded its leadership role on climate.

The “crisis” has been caused specifically by the European Parliament’s decision to reject by just 19 votes a proposal to remove temporarily some of the oversupply that has overwhelmed the market for permits to emit carbon dioxide.

Conversely, you could argue that the scheme is meeting one of its main goals. It was launched in 2005 as a cap-and-trade system, with the intention of setting an absolute limit upon the total amount of emissions across the European continent emanating from power stations and from heavy industry.

This is precisely what has been achieved. It may not have changed attitudes to industrial energy efficiency. Or even the merit order for electricity plant. But at least in one way the EU:ETS is a cause for celebration. After all, when initially conceived at the start of the century, few external observers outside Europe thought that 28 countries could really co-operate so effectively, to ensure almost total compliance with inventories and assessments. On the back of it, a whole new breed of carbon traders emerged.

This summer I shall be in the High Court. My Association is judicially reviewing a decision taken by Communities Secretary Eric Pickles. Such an action is appropriate if a minister is perceived as having acted irrationally, disregarding facts before them in a consultation that they themselves have initiated.

In January 2012 Mr Pickles launched a public consultation, which proposed that, when households erect extensions or convert garages, around ten per cent further of that cost should be spent on improving the energy efficiency of the original building.

Attached to the public consultation was the government’s official Impact Assessment, which examined the likely consequences of enacting these proposals. It identified well over £11bn in economic benefits to the economy. Plus the accrual of over 130m tonnes of lifetime carbon dioxide savings. Plus, in CLG’s estimate, some 2.2m Green Deals.

The Prime Minister has set the challenge to his Cabinet: “I want Britain to be the most energy-efficient nation in Europe”. Sadly it seems that one member is consistently working in precisely the opposite direction.

Eric Pickles has been the Secretary of State for Communities & Local Government ever since the Coalition took office almost three years ago. During that time, he has presided over, indeed sometimes personally made, a whole series of policy decisions undermining David Cameron’s declared objective.

The litany of failure is as consistent as it is long. Let me seek to enumerate just some of these failures where in each case Mr. Pickles seems wilfully to have sought to obstruct progress. This despite his having been the chairman of the Conservative Party who promoted the catchphrase “Vote Blue, Go Green.”

Having taken advice from Learned Counsel and our legal advisors, I can confirm that the Association for the Conservation of Energy will be proceeding with the judicial review process against Eric Pickles, regarding his complete volte face on implementing the “consequential improvements” section of his Part L building regulations consultation.

We intend to serve our formal documents in the High Court this Friday. On Learned Counsel’s advice we shall not be releasing the response received, late last week from Eric Pickles to our initial letter. We do intend though in our own document to point out the various admissions of errors which Mr Pickles has made already regarding his initial December 13 statement.

We want to see a speedy resolution of this matter, so that we can begin to see some of the benefits which Mr Pickles identified last year would accrue from implementing his original “consequential improvements” strategy, of £11 bn savings to the economy, 130 million lifetime tonnes of carbon dioxide, and 2.2 million more households benefiting from the Green Deal.

The average household energy bill has more than doubled over the last eight years. If you ask who have been the beneficiaries of these amazing price hikes, most people would respond: the Big Six energy companies.

Conveniently forgotten is somebody else who gains each time fuel bills go up. That person is the Chancellor of the Exchequer.

Because built into every fuel bill is a 5% surcharge. It is called Value Added Tax. Each time prices rise, so does the Treasury’s revenue. This year VAT receipts from fuel bills are set to top £2bn, well over twice the amount raised in 2004/5.

The Association for the Conservation of Energy has at last received Eric Pickles’ response to our threat of judicially reviewing his decision to reverse entirely the strong recommendations the government was making last spring, to widen the existing ‘consequential improvements’ concept to cover smaller buildings. Despite requesting – and receiving from us – an extension of an extra 17 days to prepare the response, it was nonetheless received later than agreed.

Whilst he rebuts our charge, Mr Pickles concedes that his December statement to Parliament was wrong in several ways. This included quoting completely inaccurate figures, and drawing conclusions from the wrong focus groups. He also fails to address the undeniable fact that 82% of respondents to his 2012 consultation endorsed the concept of extending consequential improvements.

We are meeting with Learned Counsel next Tuesday, and will make a further statement after that.

This decision from the European Commission is extraordinary. The UK government has been providing lower rate VAT on relevant energy efficiency goods and services for over a decade. It is a complete mystery as to why they should after so many years be trying to quadruple VAT rates. This would mean taxing energy conservation at four times the rate of energy consumption, a market distortion that the EC should be fighting, not encouraging. Our government needs to fight this tooth and nail.

If you don’t measure your energy use, you can’t control it. A truism that has certainly stood the test of time.

Here is a second truism. If everybody is able to see just how well or badly you are doing your job, it is a very distinct spur towards better performance.

It was precisely with these two aphorisms in mind that, 11 years ago, every European Union government agreed that it would be a good idea to require in every public building, its occupants display its energy performance “in a prominent place.”

On Monday, February 4 at the Royal Society, David Cameron gave a very important speech about energy efficiency at the launch of the DECC’s Energy Efficiency Mission. It is quite astonishing that neither No. 10 nor DECC have published this speech on their websites. Huge credit to businessGreen for doing government officials’ job. Arnold Schwarzenegger introduced David Cameron via video-link from a sustainability conference in Austria, and the former Governor’s speech was recorded. In any case, here is the speech in full. It makes for very interesting reading.

I want to tell you why I believe energy efficiency is so important. Yes of course it is a vital part of how we cut carbon emissions and continue to meet the ambitious targets set out in the Climate Change Act, which will allow us to meet growing energy demand in a way that protects the environment for our children, grandchildren and generations to come. Of course that is important, but my argument today is not just about doing what is right for our planet, but doing what is right for our economy too.

Because make no mistake we are in a global race and the countries that succeed in that race, the economies in Europe that will prosper, are those that are the greenest and the most energy efficient.

Let me be clear why that is. Energy consumption is set to grow by a third over the next two decades alone. And in a race for limited resources it is the energy efficient that will win that race.

It is the businesses that are best insulated from energy price shocks who will be the most successful, it is the consumers who are the least vulnerable to energy prices whose household bills will be the lowest and who can be the most confident about their future. And yes, it is the countries that prioritise green energy that will secure the biggest share of jobs and growth in a global low carbon sector set to be worth $4tr by 2015.

So to those who say we just can’t afford to prioritise green energy right now, my view is we can’t afford not to.

Far from being a drag on growth, making our energy sources more sustainable, our energy consumption more efficient, and our economy more resilient to energy price shocks – those things are a vital part of the growth and wealth that we need.

Already today Britain is one of the best places for green energy, green investment, and crucially for green jobs anywhere in the world.

We have the world’s first payments for business for generating renewable heat, we have a pioneering carbon capture and storage programme, we have the largest offshore wind market in the world.

In the City of London we’ve got the world’s number one financial centre for low carbon industries, and vitally we are putting energy efficiency where it should be at the heart of our energy policy.

Our Green Deal will mean thousands of families can afford to insulate their homes for less, our reformed feed-in tariff is helping drive the growth of a vibrant and entrepreneurial decentralised energy sector, providing communities and business with a range of innovative clean technologies.

And our Green Investment Bank – political parties across the world talked about a Green Investment Bank – is the first of its kind in the world and has £3bn to invest in green energy projects, with a particular focus on energy efficiency.

When I become Prime Minister I said I wanted Britain to have the greenest government ever and I am as committed to that today as I was then. But I want to go further. I want Greg [Barker] to bring together everything we are doing in one coherent strategy to make Britain the most energy efficient country in Europe.

I think there’s a huge opportunity. If you look at all the individual things I have mentioned that the government has committed itself to, the whole is much greater than the sum of anyone. I want to bring these together and really explain to the world, and particularly investors, what is available here in Britain.

I want you to help. It is a shared endeavour. It cannot be done by government alone.

You are the companies and contractors that can develop Britain’s expertise in energy efficient technology, you are the global investors who can get behind those companies and pioneer the new financial instruments that can take investment in green energy to the next level, you are the manufacturers who can use this technology to cut their costs, compete, create new jobs and win new contracts for Britain. And you are the experts who can help us build the right framework within government to get this right, who can use the consultation on the Energy Bill to shift policy and make us simplify the regulatory environment.

Together we can make Britain a global showcase for green innovation and energy efficiency.

Together we can do the right thing for our planet and, just as important, do the right thing for our economy too. With your help on this energy efficient mission we can make sure that now, and in years to come, Britain is open for business, winning in the global race, and doing it in a way that is green too.

[Asked by the Sun about the relatively slow take up of the Green Deal the Prime Minister responded:]

It’s very important with these big new programmes to get the balance right. On the one hand if you go off with an enormous advertising bang you will not have the capacity to meet demand and you will end up with disappointed consumers. You’ve got to try and balance that, this is a programme we want to build over the months and years ahead.

I think the advertising is effective think the name is very clear and understandable. The key to it is the basic promise that you are not making an upfront investment and the savings you will make over time will really benefit you… It will take time to build up because it is a new concept, but it [shows there is] vision from government, a commitment to energy efficiency, and big buy in from the private sector to help you deliver it.

Asked by the Daily Telegraph about his failure to deliver a big keynote speech on the environment the Prime Minister responded:

I think I have probably learnt my lesson about not pre-advertising major speeches in advance.

I think the important thing is judge a government on what it does, rather than the frequency of speeches. I really do think that if you look at the record of the government we have lots of first in the world, no other government has done what we have done on renewable heat, on the Green Investment Bank, on carbon capture and storage.

I accept there was a debate within government about the Energy Bill. I don’t hide that from anyone. People say it is because we are a coalition. But even if we weren’t a coalition there would still be a debate about the cost to consumers in the short run and subsidies that need to be given to help get new technologies off the ground. There is always going to be a debate about that.

We have had that debate, we’ve settled the debate and now we can go to international investors and say, ‘if, for instance, you invest in offshore wind if you build your turbine before the end of 2017 I can’t just tell you what you’ll earn for one year or two years, I can tell you what you’ll earn for 20 years. What other industry or business anywhere in the world has got that sort of certainty?

And then you look at the fact we have set the levy control framework beyond 2017, I really think Britain can get out there in the international market and talk to investors and talk to the big companies – the Siemens, the Gamesas, the Dows, and others – and say you have got absolute certainty investing in these markets. When it comes down to the nitty gritty of policy detail – the enormous commitment to the Green Deal, the enormous commitment to CCS, feed-in tariffs, to offshore wind industry and other areas – the commitment is all there.

The Association for the Conservation of Energy has formally told Communities Secretary Eric Pickles that it will apply for judicial review of his December 13 statement ruling out implementing any “consequential improvements” requirements for smaller buildings.

A judicial review is appropriate if a Minister is known to have acted irrationally, disregarding facts placed before them in a consultation which they initiated. This is particularly so if they fail to explain why they have opted to reject the weight of evidence before them.

Having taken advice from Leading Counsel, the Association is confident that Mr. Pickles’ statement fulfills that description.

Last January Mr. Pickles issued a public consultation proposing that, when households erect extensions or convert garages, around ten per cent further of that cost should be spent on improving the energy efficiency of the original building.

This followed the logic that, however high the efficiency levels of the new part, the overall energy consumption at the address in question will increase. The proposal simply extended existing requirements in place for larger buildings to those below 1000 m2.

Accompanying Mr. Pickles’ proposals was an Economic Impact Assessment. This has to be approved before being issued by every other Government department, including the Prime Minister’s office and the Treasury. One of the reasons for the levels of support given across Government must have been the enormously positive boost to the economy that such “consequential improvements” were deemed likely to provide. Well over £11 billion economic benefit, plus over 130 million tonnes of lifetime carbon dioxide reductions, would accrue.

Another significant plus factor was the boost that these new requirements would make to the government flagship Green Deal initiative, one of the main highlights of the Coalition Agreement that enable the Prime Minister to commit in May 2010, as he took office, to leading “the greenest government ever.”

Subsequently it turns out that projections for take-up of the Green Deal has been heavily predicated upon the presumption that the consultation proposals would be approved. Absent that, some 2.2 million fewer households were reckoned to be likely to take up any Green Deal package.

Eventually and only after the Green Deal had been operational for ten weeks, Mr. Pickles pronounced. “Having considered all the representations and evidence, including the public reaction, I can inform the House that we will not be going ahead with such regulatory proposals in any way.”

The public reaction can be measured in two ways. Most importantly, the answers to the first question within the public consultation, which asked whether or not such a requirement was approved. Respondents voted 82:18 in favour.

A YouGov opinion poll, taken last May, revealed that the public were nearly 2 to 1 in favour of extensions triggering additional energy improvements. Majorities could be found by gender, by age group, by social grade, by region and – significantly – by supporters of all three political parties.

In his statement, Mr Pickles used just two reports to justify his decision, from the Energy Saving Trust and from AECOM. ACE maintain that the summaries he used seriously distort the research evidence, and in both cases misrepresent the conclusions reached, which in both cases were largely very positive.

ACE Director Andrew Warren said:” There is no explanation whatsoever for Mr. Pickles’ change of heart. Apart from his formal statement on December 13, we cannot tell why he has decided to reject a scheme, which, less than a year earlier, he was recommending so strongly. Even though he had demonstrated it to be good for the economy .Good for the environment .Good for the Green Deal. Essentially, good governance.

“His decision is too perverse to remain unchallenged. It is, put bluntly, appalling governance.”

As Conservative Party chairman in 2008, Eric Pickles was responsible for coining the slogan “Vote Blue, Go Green.” He has until February 11 to respond. Should he not withdraw his statement of December 13, the application for judicial review will proceed.