Capital investment of £2bn a year is required for the Green Investment Bank to be “effective”, said the deputy director of an environmental business coalition.
Speaking at the ‘Budgeting for a Green Transition’ event, deputy director of the Aldersgate Group, Andrew Raingold, described the green bank has having the potential to become “one of the cornerstone policies of the new government”.
Raingold said: “[The Green Investment Bank] could go a long way to facilitate the estimated £260bn of investment required within 10 years to achieve UK climate change targets. That works out at over £70m every single day from now until 2020.
“This is a major financing challenge for the UK economy, particularly given the current high-risk growth odds of low-carbon investors and capital constraints.”
However, Raingold argued that “for the green bank to be effective it needs to be sufficiently capitalised, which is no simple task in the current fiscal climate. This should be in the region of £2bn a year up to 2020, the bulk of which should be funded from auction receipts from the EU emissions trading scheme. [This means that] high polluting industries are funding the investment in technology and infrastructure essential for keeping the UK economy successful and competitive.”
Raingold also welcomed the Chancellor’s confirmation that detailed proposals for the green bank would be published following the comprehensive spending review in October.
“This will be a very reasonable timetable and we can still realistically expect legislation within a year.”