Saving the planet "shouldn't cost the earth", George Osborne said today as he warned against Britain leaving itself exposed by dealing with climate change single-handedly.
The Chancellor said the scientific evidence for man-made environmental damage was "overwhelming", as he outlined the complexities in responding to the problem.
Speaking after former energy secretary Chris Huhne had criticised the Treasury for failing to tackle energy waste and bring energy bills down, Mr Osborne said: "Of course, with all these policies, we have to get the balance right between making sure we have the right energy mix, making sure we have the power stations that we need, and making sure it's affordable to customers."
He told BBC Radio 4's Today programme: "I do accept that climate change is happening and I accept the overwhelming evidence that it's man-made, and I want to be part of the international solution to do that.
"My argument has always been that saving the planet, shouldn't cost the earth. What good does it do Britain to have a set of policies that closes, let's say, an aluminium smelter in the north of England, and then that same company opens an aluminium smelter in China? We haven't done anything on climate change or carbon emissions, but we certainly have cost jobs and hurt people's lives in this country.
He added: "So I would just say Britain, yes, wants to be part of an international effort to tackle climate change, but it can't be out there all by itself at the front of the pack."
Mr Huhne described the Government's failure to make homes more energy-efficient and bring down bills as depressing.
The former energy secretary blamed high energy costs on the Treasury, which he said had resisted calls to provide greater incentives to homeowners and businesses to improve their energy efficiency, preferring instead to give relief to fracking firms.
The disgraced former cabinet secretary also said more needs to be done to ensure the United States meets its free trade obligations by sharing its natural resources.
Speaking to the Today programme, he said: "I think that the Government has made a lot of progress on green issues. It does depress me that there is still some very easy hits, for example on energy saving, for example we could be saving a lot of energy and reducing our bills if there were greater incentives for the Green Deal, for example."
The Coalition's flagship scheme, originally unveiled by Mr Huhne, was designed to encourage people to adopt greater energy-saving measures by allowing people to pay for the improvements through savings on their bills. However, it was revealed earlier this month that only 12 homes had taken up Green Deal since its launch in January.
"Our homes are incredibly inefficient: they leak energy and that costs an incredible amount, and it's been the Treasury which has really been the obstacle for that," Mr Huhne said.
"Even though it's prepared to give tax breaks for fracking, which isn't going to bring us great advantages in terms of price, it's not prepared to give that tax incentive for energy-saving, which is the cheapest way to bring bills down by far and would create jobs all over the country."
On fracking, Mr Huhne said Britain needs to put pressure on the US to make sure it is sharing its energy resources more fairly.
"The speed of the fracking revolution in the US has happened so quickly, that investors have been unable to keep up with import terminals... Because, actually, shipping gas is much more difficult than you think," he said.
Setting out the complicated nature of transferring the gas across continents, he said "it takes a lot of capital equipment both ends to do that".
He went on: "The very simple reason is that it's against their legal obligations under the World Trade Organisation and, indeed, the US themselves last year took a case against the Chinese for export restrictions against rare earths.
"If you commit to free trade, you commit to free trade and one thing you are not meant to do under free trade is bury away strategic commodities so that only your businesses are allowed to use them and that was the case which the US and Europe and Japan took against China last year on rare earths, which is absolutely crucial minerals for things like the batteries in our mobile phones."
He said: "We need to put pressure on the other side to make sure it gets here and puts prices down."
Mr Huhne was jailed in March along with his ex-wife, Vicki Pryce, after swapping penalty points for speeding, so he could avoid a driving ban. They were released in May after each serving two months of an eight-month sentence.