Leo Johnson, keynote speaker, co-founder of Sustainable Finance Ltd, and partner at PricewaterhouseCoopers LLP, spoke at a roundtable discussion yesterday about the challenges of a low-carbon economy confronting government and investors. It comes in light of the government’s desire to set up a Green Investment Bank (GIB) – a concept also launched by Alistair Darling in March. George Osborne has since set up his own Green Investment Bank Commission, led by the former Chairman of Merrill Lynch Bob Wigley. The Commission’s report which was released last week claimed that the sale of Green ISAs will help to fund low-carbon infrastructure – a potentially controversial issue given the claims of some that if special ISA tax treatment are being allocated in this area, then why not others?
The IMF has just declared that the UK economy will not grow as fast as previously forecast in April with the Bank of England expected to keep interest rates at 0.5%, and the roundtable discussion with The Guardian highlighted the concerns that any desire to set up a GIB would prove relatively ineffective without a joined-up solution involving effective public policy. There are concerns that the creation of such a bank will be viewed as an end in itself, “There is a danger of them viewing it as ticking a box” without making further efforts and that, “it might distract from essential policy change”. Points were also raised regarding the possibility of a floor being placed on the price of carbon and thoughts that a Europe-wide effort and/or international agreement would prove more effective than a sole UK solution, given the necessity for joined-up policy.
The report outlines the plans for collapsing 3 Quangoes with a budget of around £185m into the Green Investment Bank. There have been claims that Wigley would also let the Carbon Trust go but as he states, “The opposite is the case. Some of the best ideas in the report came from the Carbon Trust, and I hope they could be at the heart of the Green Investment Bank.” Ultimately, as The Telegraph’s Damian Reece says, “Getting a GIB’s governance right will be crucial because no self-respecting investor will commit funds to a bank, or its products, that are subject to political interference. But no taxpayer will bless such a bank unless its actions are closely policed to ensure it is serving the public good and no one else’s.”
Discussion will continue to heat up over the next few months with George Osborne set to release the government’s Comprehensive Spending Review in the autumn.
Copyright Speakers Corner 2016