Call To Action On Green Investment Bank
Talk of the Green Investment Bank has to be turned into action if the benefits are to be harvested early, says the Aldersgate Group
The Aldersgate Group, a coalition of businesses and environmental groups, has published a number of criteria it said must be followed if the green investment bank (GIB) is going to work well.
A concern is that, with the government actively trying to reduce the country’s borrowing deficit as quickly as possible, green issues may be overlooked in the short-term as unnecessarily expensive.
Falling Investment
During the last quarter, although Europe and Israel ventured 25 percent of the worldwide funding in green technology, research from the Cleantech Group revealed that venture overall funding in green technology companies fell. Compared with the third quarter of last year this amounted to a 11 percent fall, but funding had actually plummeted by 30 percent from the second quarter of 2010. A drop in interest in solar energy investment was a major contributor to this loss.
Against this backdrop of waning investment, the Aldersgate Group has recommended rapid action to establish a GIB in statute by 2011, as a fully independent, accountable and enduring institution with a clear low-carbon investment mandate. The Group reckoned at least £4 billion to £6 billion capitalisation would be needed during the coming four years.
The Chancellor George Osborne claims that the government is still focused on the development of the GIB. He said the current spending review will concentrate on spending in areas that support growth. “It means a Green Investment Bank and carbon capture and storage so we reap the financial rewards of the green energy revolution,” he said.
Low-carbon industry
Aldersgate said that a GIB would be required with a clear mandate to leverage low-carbon investment and support the development of low-carbon and environmental industry, R&D, manufacturing, services and exports. It would also have to have the power to issue a range of green bonds.
Peter Young, chair of the Aldersgate Group, said, “The government’s commitment to creating a UK GIB is welcome but requires follow through to delivery with some urgency. The combination of economic damage from climate change, mandatory carbon targets, the aftermath of the financial crisis and the short-term view shrinking of the public sector all make the GIB an idea whose time has come.”
