The government should go ahead with a system of personal "carbon credits" to meet emissions targets, MPs have said.

The Environmental Audit Committee said the scheme would be more effective than taxes for cutting carbon emissions.

Under the scheme people would be given an annual carbon limit for fuel and energy use - which they could exceed by buying credits from those who use less.

Environment minister Hilary Benn said there were practical drawbacks to the plan although it did have "potential".

'No barrier'

The committee's report criticised the government for shelving the proposal following a preliminary study.

The MPs admitted members of the public were likely to be opposed to the move, but urged the government to be "courageous".

Their report said: "Persuading the public depends on perceptions of the government's own commitment to reducing emissions, and of the priority given to climate change in its own decision making."

It added: "Further work is needed before personal carbon trading can be a viable policy option and this must be started urgently, and in earnest.

"In the meantime there is no barrier to the government developing and deploying the policies that will not only prepare the ground for personal carbon trading, but will ensure its effectiveness and acceptance once implemented."