MPs voice concern over green investment fall

Ministers must publish a plan giving details of how they plan to secure the investment needed to meet the UK’s legally-binding carbon budgets, a group of MPs has warned.

The Environmental Audit Committee blamed policy changes made in 2015 – including closing the Renewables Obligation, reducing the Feed-in Tariff and extending the Climate Change Levy to renewables – for a “dramatic and worrying collapse” in low-carbon investment.

Annual investment in renewables is now at its lowest since 2008, having dropped by 10% in 2016 and 56% in 2017, the committee said.

The falling cost of solar and wind power had helped to cushion the impact of the fall in investment, but the MPs warned that the UK Government’s Clean Growth Strategy doesn’t go far enough to meet its climate change targets, even if all the policies are fulfilled.

Green government bond

The committee made a series of recommendations in its report, including:

● issuing a Sovereign Green Bond to provide a blueprint for the private sector to follow;

● maintaining a close relationship with the European Investment Bank to allow riskier early-stage green infrastructure projects in the UK to continue to have access to development bank finance;

● and supporting local councils to mobilise investment.

MPs added that fixed-price contracts will be key to ensuring a pipeline of low-carbon energy projects, while a steadily-rising carbon price will be necessary to achieve carbon budgets in the 2020s and 2030s.

Clean Growth Strategy criticised

Mary Creagh, Chair of the Environmental Audit Committee, said: “The Government’s Clean Growth Strategy was long on aspiration, but short on detail.

“The Government must urgently plug this policy gap and publish its plan to secure the investment required to meet the UK’s climate change targets.

“It should provide greater clarity on how it intends to deliver the Clean Growth Strategy by the 2018 Budget,and explore how a Sovereign Green Bond could kickstart its Clean Growth Strategy.”

> Download the report