Shortly after being elected Barack Obama created an immediate legacy for himself. The new president began to usher the United States on an un-trodden path to tackling climate change. It was an issue, he said, “we ignore at our own peril”.

Obama has made investing in low carbon energy technologies a hallmark of his economic stimulus package. Investing in a Green New Deal, the argument goes, will help create new industries and help steer the US on a path to carbon emissions reductions.

So energy policy is sexy again.

Back at home, the government faces a similar challenge. The prime minister has committed to investing in new energy capacity to stimulate the economy. Yet this road is not without its own perils. Environmental NGOs, the Tories and the Lib Dems have criticised the government for its commitments. But why is energy policy important?

Over the next two decades the UK could face an energy gap with the very real prospect of the lights going out. Old coal, gas and nuclear power stations are being closed and energy demand is rising. BERR expects 30-35GW of new electricity generation capacity will be needed over the next two decades.

At the same time the government has to decide on how best to meet our energy gap in the most environmentally friendly way. Ed Miliband recently committed the UK to reducing greenhouse gases by 80 per cent by 2050. The question for any government is how to ensure the lights stay on, to reduce climate change and, at the same time, keep energy prices as affordable as possible.

There is a danger Labour falls into the trap of making easy, populist commitments to meet the challenge. The Liberal Democrats have ruled out nuclear and fossil fuel fired power stations, relying totally on renewable energy to plug the gap.

It is widely recognised that this can’t be the solution. The long-term goal has to be to move us to an economy completely reliant on renewable sources of energy. Getting there in the here and now is a different matter. Apart from the higher relative cost of investment in wind and tidal power, it’s not certain that we’ll be able to physically build the required renewable capacity before 2020.

The answer has to be a mixed energy backbone – renewables, coal, gas, oil and nuclear. But this means taking some tough decisions. One such is whether to allow the continued use of fossil fuels to generate our energy. The Lib Dems have set their mark down, as have most NGOs – no to new coal, no to nuclear, rely on renewables.

It is hard, however, to say that fossil fuels don’t have a role to play. The UK, for example, has coal reserves over 600 times our current usage, much more so than gas and oil. Using fossil fuels is also the cheapest way of generating energy. The problem is that it’s the most polluting.

So we need to innovate to develop technologies which allow us to use fossil fuels as we move to a low carbon economy. One such technology on the cusp of being developed on a commercial scale is carbon capture and storage (CCS). CCS has the potential to capture over 90 per cent of emissions from burning fossil fuels, storing it underground. Without it, it’s clear we won’t meet our climate change targets.

Labour MPs and PPCs would find it difficult justifying a Lib Dem position on the doorstep. Try telling Mrs Jones she won’t be able to afford her fuel bills and her lights might go out because we couldn’t build windfarms soon enough, having ruled everything else out.

The government still has the bruises of the Heathrow decision fresh in mind, but the danger is to capitulate to the purist voices in these difficult arguments. Labour has the chance to show real leadership on these issues, but the answers aren’t simple.