How should a Green Investment Bank most effectively be set up?
The banking failure laid bare the private sectors’ veiled dependence on the public sphere in bad times. But, a publicly owned Green Investment Bank will be proactive, not just there to pick up the pieces of mistakes made elsewhere. It should provide affordable credit, capital and guarantees, and in the process leverage further investment, but only to groups, companies and initiatives that will help push a rapid transition to a low carbon economy. Capital can be raised from a mixture of bonds, carbon taxes, the redirection of resources held in other part public owned banks and “green” quantitative easing. Working mostly at a large scale, the Green Investment Bank will need a network of more local, sister banks able to provide capital for smaller scale initiatives.
What should it use its financial resources to support?
The priority will be to finance a new low-carbon infrastructure for Britain. From new and renovated low-energy building stock, to a new multi-scale, multi-technology renewable energy power system, to a clean, efficient, transport network with a hugely enhanced role for mass public transit, the bank would be instrumental in rewiring the nation for a low-carbon, high well-being future. In essence, it will help to write a national insurance policy against a future of high and volatile fossil fuel prices, geo-political insecurity and carbon constraints due to global warming.