The government’s intention is to publish proposals for a “green investment bank” following the spending review in the autumn. If that happens, we might expect legislation as early as 2011, a fairly ambitious timescale for such a complex institution.
The green investment bank would finance clean technology across the board and could be a vehicle to deliver the positive commitments of the government on climate change, provided that it is properly capitalised and has the right remit.
We are looking for £2 billion a year of government money from now until 2012. That sounds like a lot, but not all of it need be new money: some of it could come from funds already committed to green technology.
After that, we propose that the investment bank would receive the same annual sum out of revenues from the EU emissions trading scheme. It makes sense to take money from the permits bought by heavily carbon-emitting industries to invest in green technologies.
You have to put this in the context of the coalition agreement. There are some very promising commitments in there, but we’re waiting to see the policy detail and some real progress. Maybe the emergency Budget was almost too soon to expect this, but it’s important to keep up a sense of urgency, not only because of the reality of climate change but also for the UK to maintain a competitive advantage in green technology, which is essential to economic recovery.
In a lot of areas, the UK is behind on this. A very small proportion of our energy comes from renewable sources compared with Germany, Spain or Denmark.
However, there are areas where we can lead, or already do, such as offshore wind and low-carbon vehicles. There are extensive opportunities, but they require government support. A lot more still has to be done to ensure we remain a leader in these areas and start expanding our capacity.