New DECC man Huhne faces tough challenges

Chris Huhne is the new Energy and Climate Change Secretary. The Liberal Democrat, 55, MP for Eastleigh in Hampshire, was latterly the party's Home Affairs shadow, and previously its environment spokesman.

Simon Hughes, who was the LibDem's Shadow Secretary of State for Energy and Climate Change, might be surprised at the appointment.

But according to the website They Work For You, Mr Huhne does have a better record than Mr Hughes on voting to stop climate change.

Mr Huhne is particularly interested in tax reform, which might explain his appointment.

He has in the past advocated a switch from taxing employment and labour on to resource use, pollution and carbon emissions.

Together with Vince Cable, it's possible that they may influence George Osbourne's position in the Treasury on these crucial issues.

As we enter a period of public spending cuts the new coalition Government will have little room to bankroll environmental action, but instead has an opportunity to shift the burden of taxation to both protect jobs and the environment.

But there will be other tough decisions on policy.

During the election campaign, the Conservatives said they wanted to replace the Renewable Obligation and system of Renewable Obligation Certificates (ROCs) with an extended feed-in tariff scheme.

This could mean considerable uncertainty for large-scale renewable energy projects investors, such as wind farms, which are currently being planned based on the returns they could realise through the ROC system.

Huhne will have to spell out very soon what he plans to do about this.

In addition, the Tories are for nuclear and the LibDems against.

Apparently the Tories are giving their coalition partners the option of abstaining on any Parliamentary vote on nuclear power, leaving them have to get Labour on board to secure a majority, as well as promising not to spend any public money on the technology.

This could mean that new nuclear build faces an uncertain future.