The UK is going into reverse on renewable energy while pressing the accelerator on fracking, according to former Environment Agency chairman Chris Smith.

The final report of a shale gas taskforce led by Lord Smith concludes that the UK should be pursuing both fracking and green energy. It finds shale gas could be safely and usefully produced in the UK, providing strict environmental protections are in place.

But it warns that the government’s recent cancellation of a £1bn competition to develop carbon capture and storage (CCS) technology – which could trap climate-warming CO2 from gas-burning – has damaged the viability of a large shale gas industry.

On Saturday, the world’s nations agreed a UN climate change deal in Paris to limit global warming to below 2C. The UK government won praise for its role in delivering the deal, but it has been heavily criticised for a string of domestic policies that attack renewable energy and energy efficiency.

“The government are not being even-handed at the the moment,” Smith told the Guardian. “They appear to be going into reverse on a lot of renewables, whilst at the same time pressing the accelerator on shale gas. They need to moving along on both fronts, not just one.”

Ministers have moved to block onshore windfarms, while fast-tracking fracking, and are expected to announce this week whether planned 90% cuts to solar subsidies are going ahead.

It was a “severe disappointment” that ministers cancelled the CCS project just before the Paris summit, said Smith, a former Labour cabinet minister. CCS is seen as vital if fossil fuels are to remain in use in coming decades. “A serious development of CCS is in our opinion essential for the medium term viability of any significant shale gas industry,” says the report.

The UK is not on target to meet its binding targets for cutting emissions and renewable energy. “We need to prepare much more actively than we are,” said Smith. “It becomes very difficult to envisage gas-fired power stations after say 2030-35 without CCS, whilst meeting climate change targets.”

On Monday, a formerly staunch supporter of fracking, Prof Paul Younger at Glasgow University, said the CCS cancellation had “fatally undermined” the case for fracking.

Energy secretary Amber Rudd, when asked at the Paris climate talks if cancelling CCS was a mistake, said: “I don’t think it was a mistake, no. There are some CCS plants that are going forward at the moment. They are still expensive. For the UK we were having a tight spending commitment so it was the right thing to do there [cancelling it].”

The £900,000 year-long assessment by the shale gas taskforce was funded by the fracking industry, including Centrica, Cuadrilla and Total, but was produced independently. It concluded shale gas could play a part in the UK meeting its climate change targets by replacing coal and could create thousands of jobs.

The report said exploratory drilling should go ahead “as soon as possible”, as it is currently almost impossible to estimate the potential scale of the industry or what the gas would cost.

The taskforce concluded that the risk to public health from strictly regulated fracking was no greater than from existing oil and gas operations or heavy industrial plants such as steel or cement works. “There has been understandable concern – and even fear – as a result of the lax standards [in the past in the US],” the report said.

“However, this highlights issues with regulation and enforcement from which lessons must be learned, not issues with [fracking] itself.”

Smith said it would take longer than 20-25 years to replace the gas that heats 80% of UK homes with other technologies, meaning gas had a role to play and he said domestically-produced gas was more secure than imports. “It is simply not feasible to create a renewables industry that can meet all our energy needs in the short term,” says the report.

However the report also said a safe fracking industry would need a single regulator, rather than the current split of responsibilities across the Department of Energy and Climate Change (Decc), Environment Agency and Health and Safety Executive. The Royal Society and Royal Academy of Engineering made the same recommendation in 2012, but it has not been acted on.

Lord Smith, former head of the UK Environment Agency. Photograph: Andy Hall/The Observer

The most important regulation needed, said Smith, was “green completion”, which ensures that methane – a potent greenhouse gas – does not escape from drilling wells. It is voluntary in the UK, but is now legally required in the US. “If they can do it there, we can do it here,” said Smith.

Directly involving local communities in monitoring fracking and minimising heavy traffic and noise was also essential, the report said, as was spelling out local financial payments. “Operators must give details if they expect public support,” said the report.

“The Paris climate deal signalled the end of the era of fossil fuels and if the UK government is serious it must end its fixation with fracking,” said Rose Dickinson, from Friends of the Earth. “The government should start by announcing it won’t overturn the democratic decision of Lancashire council to reject fracking.”

“Whatever planet the UK fracking lobby inhabits, it can’t be the same one where world leaders just reached a historic deal that puts fossil fuels on the wrong side of history,” said Hannah Martin, an energy campaigner at Greenpeace UK.

The taskforce report was welcomed by the shale gas trade body, UK Onshore Oil and Gas (UKOOG).

“We have already seen a significant shift to imported gas [and] shale gas will provide a means of enhancing the UK’s energy security,” said Ken Cronin, chief executive of UKOOG. “The industry is committed to working with communities and enabling them to share in the economic benefits. We now need to get on and find out how much shale gas we have beneath our feet.”

A Decc spokesman said of the taskforce report: “This report confirms what we have been saying for some time – that with the right standards in place fracking can take place safely. With more than 50 years of drilling experience in the UK and one of the best records in the world for economic development while protecting our environment and people, we should press on and get exploration moving.”