Raising carbon emissions targets is vital for improving the UK's competitiveness, according to a cross-party report from MPs.

The Environmental Audit Committee (EAC) called on ministers to revise goals from a 34 percent reduction on 1990 levels to up to 42 percent.

MPs found that the government's success in managing the current carbon reduction goals is largely due to lower industrial activity in the recession.

Currently the government is using evidence based on findings by the Intergovernmental Panel on Climate Change, but the committee believes that the 34 percent figure does not factor in ongoing climate damage.

The EAC recommended that the government should only trade carbon credits with countries taking similar action in order to lead internationally on climate change.

The report also called on the government to be more transparent about targets by presenting "the cost of action on climate change more clearly and to make clear that this is not an additional cost but an alternative to the economic, social and environmental cost of inaction".