Britain has begun the process of setting up its Green Investment Bank to help fund the shift to a low-carbon economy and could make it commercially independent, the minister of state for energy and climate change said.
“We have begun the process of establishing the Green Investment Bank,” Gregory Barker told a Confederation of British Industry event on Tuesday.
“We are currently studying a wide range of options. We are also looking at the option of it being commercially independent,” he said, declining to give further details.
The government hopes the establishment of a “green bank” will help it meet its 2020 goals to cut carbon emissions and reduce the use of fossil fuels.
Three government departments — the Treasury, the Department for Business Innovation and Skills and the Department of Energy and Climate Change — are working on plans for the bank.
Barker would not comment on when the bank would be formed but said the government would publish the proposals under consideration later in the year.
“We need to understand the implications of the Carbon Reduction Commitment first,” he said, referring to Britain’s new mandatory corporate carbon trading scheme.
An independent report in June said Britain may need up to 550 billion pounds of investment through 2020 to fund the shift to a low-carbon economy.
A “green bank” funded by new consumer levies, the sale of emissions permits to industry, in addition to institutional and retail interest in new investment products would help plug the gap, according to the Green Investment Bank Commission report.
The bank could take control of existing government grants and loans, such as those managed by the Carbon Trust, raising up to 10 billion pounds a year in cash by issuing green bonds, it said.
