Investing in the green economy
Business as usual in the energy industry is definitely something that we are past, a leading Liberal Democrat peer has said.
Speaking at a Liberal Democrat conference fringe event sponsored by KPMG and the Social Market Foundation, entitled 'The Green Growth Challenge', Baroness Kramer told the audience that we need to "invest in our energy base" if we are going to meet the transition to a long-term sustainable green economy.
Addressing specific projects brought forward by the government to address this significant challenge, Kramer said there was "hope" that the Green Investment Bank would get some leverage out of the private sector.
Vincent Neate, UK head of climate and sustainability for KPMG, said businesses want to move “from brown growth to green growth”, but they need some incentives from government in order to do so.
He suggested adapting research and development (R&D) tax credits to make them more favourable to green investment, rather than just R&D generally.
Ultimately, he said the business community will invest “if green growth investment pays a better return than brown growth investment".
Ingrid Holmes, programme leader on low-carbon finance for E3G, the environmental NGO, commended Liberal Democrat ministers for the introduction of £3bn worth of public funding through the Green Investment Bank.
Kramer was quick to defend the Green Investment Bank as a way of moving away from the reliance on government subsidy.
"It reaches the point where it is going out and directly borrowing in the markets. It is a long-term structure that survives various political changes," she said.
With a much gloomier outlook on the prospects for green growth, Fiona Harvey, environment correspondent for the Guardian, lambasted the £3bn fund in the Green Investment Bank as "not very much".
Referring to another flagship policy from the government, the Green Deal, Harvey said:
"Nobody that I have spoken to at this conference about the Green Deal believes in it one jot, not even Liberal Democrat ministers."
Neate disagreed, applauding the Green Deal as an "innovative" way of financing the move to a low-carbon economy.
Numbers aside, Ingrid Holmes said it was fundamental "to win the argument that green growth should be invested in because it will help us grow our GDP".
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