Acommission of independent experts said today that it's time to scrap the Government's many and varied separate green funds and quangos (including the high-profile Carbon Trust) and replace them with a green investment bank designed to funnel public and private funds towards low-carbon investment projects.
Putting all the existing funding into a single pot is a sensible move, both for financial as well as practical reasons. But is there a risk that some of the 'softer' (but also important) aspects of the quangos' work might fall by the wayside as a result?
The commission, chaired by ex-banker Bob Wrigley (don't let that put you off), suggests radical action is required if the UK is to come up with the £550bn of low-carbon investment it apparently needs to meet its 2020 emissions targets – particularly given the pressure on the public finances and bank balance sheets, not to mention the 'market failures' that are currently undermining investment in what is essentially still quite risky technology.
The answer, it says, is a green investment bank that would 'create a productive partnership between government and the private sector', Wrigley writes in today's FT. For a start, it would roll up the various quangos and funds created in the last decade that are all essentially doing the same job, doubtless treading on each others toes and spending £185m of our money in the process.
So far so good – although, on the face of it, a commission chaired by a former banker recommending the formation of, er, a new bank doesn’t sound all that radical.
The bank would also provide debt and equity investment in 'climate change-related technologies and projects', while also building public support with things like 'Green ISAs' for eco-savers (which it reckons could bring in an extra £2bn a year). Tapping the institutional market (particularly insurance companies) add another £10bn, it suggests.
The current arrangements just have to be inefficient and subject to political meddling, so there's a lot to like about this idea. But it’s not without drawbacks. As the Government's highest profile green body, the Carbon Trust has done much to help (particularly small) businesses reduce their bills and emissions.
Will the GIB – a financial institution, backed by private money, that will probably spend most of its time thinking about large-scale infrastructure projects – really want to get its hands dirty with this kind of thing? Will it put the same amount of effort into raising awareness of the issues and spreading best practice? Will it put some money put aside to invest in the really cutting-edge stuff that may not provide a return for years or even decades?
We're not at all sure that it will – i-banks are not noted for their communications skills, after all, which is what a lot of this stuff amounts to. We’re all for greater efficiency, but it's important not to throw the good out with the bad.
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