Ministers have been urged to create a Green Bank to fund climate change investment as part of the Government’s multi-billion pound infrastructure investment programme announced earlier this week.
Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics said: ‘We really need a national investment bank. It can have a very powerful effect, help bring down the cost of capital, and allow the private sector to come in.’
Lord Stern estimated that about £20bn would be needed to launch the bank, which would be part funded by the private sector.
The lobbying group of council leaders UK100 has also urged the govrnment to ask for a new development bank that would fund projects that reduce emissions, particularly local projects like electric vehicle charging stations and greener home heating systems. It estimates that a bank funded with £5bn of public money could attract £100bn of private capital. Last month over 200 business leaders also wrote to the government urging that post virus recovery plans include climate change commitments.
In an LSE seminar on whether recovery from COVID-19 would impede climate change policies Lord Stern called for ‘clean infrastructure’ investment such as electric charging points, broadband, new cycle routes, solar panel and retrofitting buildings. He added: ‘As we move out of rescue to recovery then the right kind of investment and finance becomes critical. We need to help firms towards the technology of the future.’
Lord Stern is a former second permanent secretary at the Treasury working on public finances who produced a report, the Stern Review, on climate change in 2006.