The Government has been praised for its £1billion pledge for a Green Investment Bank, but attracting external investors may prove tricky
Green Investment Bank faces critical test over funding shortfall
8th December, 2010
George Osborne pledged £1billion to a green bank that could help Britain reduce carbon emissions. But with low carbon technologies unproven, banks, institutions and energy companies are wary, meaning the venture may not attract the capital to make it viable
Most people would agree the UK needs to slash its carbon emissions. The problem is paying for it. According to accountants Ernst & Young, the UK needs to spend £450bn on its energy infrastructure by 2025 in order to meet its long-term target of an 80 per cent cut in carbon emissions by 2050, enshrined in the Climate Change Act of 2008.
That £450bn includes money to make our homes and industry more energy efficient and a massive expansion of renewable energy such as wind, tidal and hydro power. It also includes money for new coal, gas and nuclear power stations, to replace our rapidly-ageing existing stock and keep the lights burning, plus investment in carbon capture and storage, as well as new transmission networks.
That sum is not expected to come entirely from taxpayers' pockets. Ordinarily, the money would be spent by energy companies, banks and so-called 'institutional investors' such as pension funds, who take people's savings and invest them, with the aim of generating a steady return which goes into their retirement pot.
The problem is, nowhere near enough money is going into our energy infrastructure at present. Ernst & Young estimates that banks,...
To view the rest of this article - you must be a paying subscriber and Login
Using this website means you agree to us using simple cookies.