Green Finance UK
We are calling for the creation of a publicly owned Green Investment Bank in the UK to facilitate the large scale mobilisation of private capital that will be required to deliver a low carbon transition.
Read the details in our briefing, Establishing a Green Investment Bank in the UK (pdf - 84.1 Kb)
And our briefing on achieving a low-carbon economy, Cutting Back on Carbon Spending (pdf - 67 Kb)
Latest on Green Finance UK
The Green Investment Bank Commission has argued in an independent report (pdf) that cutting the number of quangos would radically improve the UK's carbon output and move us further towards a low-carbon infrastructure.
The most significant insights from the report are:
- Finance gap: It concludes that, without government intervention finance will not flow to essential new UK infrastructure in the quantity needed because of the unique risks inherent to many low carbon projects, and because of constraints on the availability of project finance. E.g. it reveals that less than 15% of the investment required for the UK’s 2020 climate targets has been secured.
- Innovative financial solutions: It identifies innovative new ways in which private capital could be unlocked, both from UK citizens, and from international capital markets. E.g. speeding up the construction of offshore wind farms by offering insurance to banks so that they lend to the businesses currently building projects.
- Private sector support: A commission of experienced financiers has made the case as to why Government should set up a new independent bank which works in the public interest, how the bank can avoid competing with the private sector and why the bank doesn’t have to be on the Government’s balance sheet.
On 30 June, we held a Green Investment Bank debate, speakers included Bob Wigley, chairman of the Green Investment Bank Commission. See the events page for further details.
Over the next few months, Green Alliance will be working with experts from business, finance and Whitehall officials to identify the critical factors that will make the Bank a success, including its scope, its legal standing and its capitalisation.
The growing case for Green Bonds and a Green Investment Bank
All UK political parties have ambitious visions for a transition to a low carbon, sustainable economy over the next few decades. Delivering these ambitions will require capital investment at an unprecedented scale and a renewing of the country’s infrastructure not seen since the Victorian age of railway building and urban sewage systems.
Up until the financial crisis of 2008, policy debate had revolved around stimulating the demand for this investment through energy regulation, economic instruments and consumer information. The aftermath of the collapse of capital markets and the credit crunch has stimulated far more discussion around creating policies that influence the investment community more directly.
Coming up from a growing number of sources in NGOs and financial institutions, slowly but surely, a new family of policy instrument is being developed. It mixes public borrowing with private sector risk management, uses long term financing to address future climate problems, and could be a way of channelling our own retirement savings into the infrastructure we will need to ensure the world we retire into is protected from dangerous climate change. The policy instruments are issuing green bonds, establishing a green investment bank and creating new incentives for long-term financial investments.
This section of the Green Alliance site, Green Finance UK, will provide political commentary and policy analysis to help you navigate this new set of policy instruments.
In recent months there have been a plethora of report, briefings and announcements in UK and around the world promoting the use of green bonds, establishing green investment banks and other public financial institutions to finance the low carbon transition. Here we will provide access and links to as much of this work as we can find, as well as developing the political narrative required to take these ideas into action and start the vital job of using policy to attract far greater levels of private investment into the low carbon transition.
This site is primarily aimed at the developing policy debate around using green bonds and the creation of a green investment bank. There is a growing financial and technical literature around such bond financing, which we will reference and link to when necessary, but the Green Alliance focus will be on the policy and political framework and debate.
What is a Green Bond?
What is the Green Investment Bank?
Read the Green Finance blog