MPs decry ‘worrying collapse’ of clean investment
MPs have called on the Government to secure low-carbon energy investment after a "dramatic and worrying collapse" since 2015.
Clean energy investment dropped by 56% in 2017 following a series of green policy changes, research from the Government’s environmental watchdog has highlighted, with annual investment now at its lowest in a decade.
MPs stress that huge policy and investment challenges remain in decarbonising transport, domestic heating and industry. The sharp fall in investment could threaten to derail the UK’s efforts to meet its climate targets, even if all policies in the Government’s Clean Growth Strategy are met, it is warned.
Speaking exclusively to edie ahead of the report’s launch yesterday (16 May), the Environmental Audit Committee’s (EAC) chair Mary Creagh called for the policy gap to be plugged urgently.
“We want the Government to set out how it will secure that investment before the Autumn Budget, because we need a clear route map to give the different sectors a confidence they need,” Creagh said.
“We’ve done the low-hanging fruits – we now need to move onto the next sector. Whether it is transport, heating or heavy industry, we need a roadmap for each of those sectors that moves in parallel with clear funding timelines and clear agreed objectives. I’m afraid that is not what we have seen in the Clean Growth Strategy.”
The EAC points towards a change in green policy as an underlying cause of the sharp fall in clean investment. Since 2015, ministers have scrapped Zero Carbon Homes Policy, reduced Feed-in-Tariffs (FiTs) for small-scale renewables generation and closed the Renewables Obligation (RO) to onshore wind a year early.
MPs also cite the privatisation of the Green Investment Bank and a drop in European Investment Bank lending following the EU referendum as contributing factors.
The Government should negotiate to maintain the UK’s relationship with the European Bank to help riskier early-stage green projects, the EAC claims. It also calls for the issuing of a Sovereign Green Bond to raise the capital necessary to deliver the UK’s carbon budgets.
This follows a report from the Government’s green finance advisers which suggested that a sovereign green bond similar to the one issued by the UK’s French counterparts – which was €9.7bn – should be considered as one of the measures of a UK green capital raising plan.
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