The result, which means the earliest a target will be set is 2016, has been heavily criticised by green businesses and environmental groups.

Many are stressing that the decision is leaving business and investors without the clear and cost effective path towards a decarbonised economy.

Environmental lobby organisation Aldersgate Group, warned that the House of Lords had “missed an historic opportunity to be consistent with the Government’s commitment to being ‘the greenest government ever’ and put growth at the top of the agenda”.

Aldersgate Group chairman Peter Young said: “This is a major missed opportunity, not just for UK green businesses which gave us a trade surplus of £5bn last year, but to global businesses and investors poised to create jobs and contribute to growth here in the UK”.

According to Young, the conflict between the Government’s “green pretensions and its increasing determination to procrastinate whilst relying on high carbon, polluting technologies” will send global investors elsewhere and slow business growth in the UK.

“Meanwhile, our global competitors are developing tomorrow’s solutions with capital which could have been deployed in the UK to the benefit of our economy, both now and in the long term, when delayed modernisation of our power mix will be more expensive,” he added.

The delay has been set to fall alongside the carbon budget covering the period through to 2030, which is also to be agreed in 2016.

Yesterday’s result is the second time in six months that MPs have voted against a 2030 target. In June, 290 MPs sided against with 267 voting for it, while yesterday’s vote saw a tighter gap with 216 voting against and 202 supporting the inclusion of a target.

In a written statement to edie, a DECC spokesperson said the department was pleased that the House of Lords chose to support the Government’s position on this.

“It makes sense to set a decarbonisation target in 2016, once we have received advice from the Committee on Climate Change on the level of the 5th Carbon Budget, and know how much we need to reduce economy-wide emissions by in 2030.” 

However, Friends of the Earth’s executive director, Andy Atkins said: “By voting against a clean power target the Lords are saddling us with an Energy Bill that’s bad news for bill payers, the economy, and the climate – letting the Big Six energy suppliers off the hook.

“The Liberal Democrats have played a sorry part in this decision – shamefully this is the second time they’ve blocked a clean power target, despite claiming to support it all along.”

Last month, a group of investors, responsible for more than £1tn of investment worldwide, wrote to the Chancellor George Osborne on the day of his speech to the Conservative Party Conference, arguing that leaving out a target inhibits investment decisions and negatively impacts the UK’s ability to attract the capital needed to update its “ageing infrastructure”.

Leigh Stringer

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie