Osborne says Conservatives would set up green investment bank
28-11-2009
James Kerr
Shadow Chancellor George Osborne today spelt out how a Conservative Treasury would meet the twin threats of climate change and energy insecurity head-on – proposing a ‘green investment bank’ as the centerpiece of these ambitious plans.
In a speech entitled ‘A Sustainable Government; A Sustainable Economy’ Osborne promised that a Conservative Treasury would lead the development of a low carbon economy and finance a green economic recovery.
A Conservative Treasury would fund a green investment bank
Similar to those already in existence in Germany, Australia, France and Spain, the green investment bank would get new technologies out of the lab and on to the UK shop floor. The bank would help Britain to decarbonise its economy, compete for business around the world and create new jobs.
He spoke of the need to recognise ‘the fierce urgency of now’ by all Government departments, including the Treasury. With the UK lagging behind every major European country when it comes to using renewable energy, “We have still not seen action – either at home or abroad – that is in any way proportionate to the scale of the environmental crisis that we are facing,” he warned.
Osborne predicted that the majority of new jobs created over the next decade would come from small companies and that one of the fastest-growing sectors of the global economy is green goods and technologies, but observed that the UK has less than a five per cent share of this market. He said the Treasury would catalyse finance for green companies by creating incentives to attract private sector investment in green business. This pledge to target and support green technology companies would help British businesses raise finance and export new technologies around the world.
Osborne pledged that a Conservative Government would cut its own emissions by 10 per cent in a year, saving taxpayers £300 million. His Ggovernment was prepared to learn from UK companies, such as B&Q – which has cut emissions by 10 per cent – Tesco and BT, who have shown that it's possible to successfully reduce energy use across large organisations.
The Treasury would act to put a fair and predictable price on environmental externalities and in doing so would develop a market mechanism that priced in the true environmental costs of doing business in the UK. The Conservatives would deliver an emission scheme that was efficient and effective, and Osborne gave his word that green taxation would be truly designed to save the environment rather than raise extra cash.
“If I become Chancellor, the Treasury will become a green ally, not a foe,” concluded Osborne. He said a Conservative Treasury would be “at the heart of the historic fight against climate change” and would do whatever it takes to build green British companies and technologies of the future, driving behaviour change throughout the private and public sectors, and beyond.
The announcement has been well-received by UK business leaders, including the Aldersgate Group, a strategic coalition of businesses, NGOs, think tanks and individuals which argues that high environmental standards can will help to maintain economic growth. “A green investment bank could play a major role in financing and accelerating the low-carbon transition, while acting as a useful intermediary between investors and policy makers. It would also be a major source of competitive advantage, ensuring the City of London remains at the forefront of cleantech financing and carbon markets,” said Peter Young, chairman of the group.
Meanwhile, The Renewable Energy Association (REA) added its support. “With Copenhagen fast approaching it is essential to walk the talk. The REA welcomes calls for a dedicated green investment bank to ensure this important sector has secure access to affordable finance.”
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