Green Investment Bank Must Retain “Green Purpose” In Private Sector

Green-investment-bank-EACThe Environmental Audit Committee (EAC) has warned the Government that its proposed “privatisation” of the Green Investment Bank (GIB) must not go ahead unless Ministers can ensure that the Bank’s guiding green objectives are protected and strengthened.

The Committee has criticised the Government for taking the decision to privatise GIB without due transparency, publication of relevant evidence, consultation, or proper consideration of alternatives. It says that the Government has not put robust enough safeguards in place to protect GIB’s green purposes, and calls on the Government to establish a special share to protect GIB’s green purposes.

It’s report, The Future of the Green Investment Bank, identifies two key risks that could result from the privatisation that cannot be avoided merely by protecting its green purposes:

First, that the GIB will move its focus away from novel and complex projects that struggle to find funding in favour of easier, more commercial projects.

Second, that a privatised GIB could invest in areas that may damage its reputation and undermine its leadership role in the green economy.

Environmental Audit Committee chair, Huw Irranca-Davies MP – “The decision to privatise the Bank appears rushed and Ministers have not produced convincing evidence that it will achieve its aims better in the private sector”

Environmental Audit Committee chair, Huw Irranca-Davies MP, said: “The decision to privatise the Bank appears rushed and Ministers have not produced convincing evidence that it will achieve its aims better in the private sector.

“The Government is currently relying on assurances from potential shareholders and the commercial case for retaining the Green Investment Bank’s green purposes. That is not robust enough.

“The Government must ensure the Green Investment Bank continues to do what it says on the tin. If the Government cannot guarantee that the Green Investment Bank will retain its green purpose in the private sector then the sale should not go ahead.”

Before proceeding with the sale of the GIB, the Environmental Audit Committee says the Government must publish a business case and all impact assessments related to the sale. The Government should provide an evaluation of whether a “phased approach” involving alternative recapitalisation options would be possible. This could allow for greater consultation, transparency and market testing on the form of any eventual privatisation.

The report concludes that, if the Government goes ahead with privatisation, the Bank should be sold as a going concern. In addition, the Government should retain a minority stake in the Bank in order to demonstrate its commitment to the green economy and ensure the Bank’s long-term strength.

If the GIB is not privatised, then it should be granted borrowing powers, it says.

“Markets sometimes fail to value the actions needed to protect our air, climate and biodiversity,” Irranca-Davies, said. “Whilst we recognise there are potential benefits from an injection of capital, we are worried that a privatised Green Investment Bank would shy away from precisely the kind of difficult projects it was founded to fund.

“We need a Green Investment Bank that has the freedom to operate in ways that conventional commercial banks cannot. The green purposes of GIB must not only be properly protected – they should be strengthened. The Government should retain a minority stake in the Bank to ensure its long- term strength and demonstrate the UK’s commitment to the green economy following the Paris climate agreement.”

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  1. With the Tories wanting to privatise the UK’s Green Investment Bank, the Scottish Government should demand the setting up of a public-sector Scottish Green Investment Bank with a starting capital of £100 billion in Bank of England Quantitative Easing funds.
    I would accept appointment as the first ever Governor of the Scottish Green Investment Bank and I would be happy to report to the First Minister, if she likes.

    Scottish Scientist recommends –

    Hydro-electric / Geothermal / tidal where appropriate

    Land-based wind turbines

    Offshore wind turbines

    Solar power for local supply, recommended only where there’s winter sunshine, so not much use for Britain in the winter, therefore why invest in a system which fails in winter when we need power most?

    Solar power for long-distance transmission supply

    From the Tropic of Capricorn to the northern hemisphere. Examples – Namib Desert to Europe, Atacama Desert to North America, Australia to Asia. Requires higher voltage HVDC, such as bipolar +/-1,380 kV, a higher voltage than is currently available. Allows summer sunshine to power northern winter. Ideal but no sign of this being practical within the next few years.

    From the Tropic of Cancer to the northern hemisphere. Examples Sahara Desert to Europe. Tibet to Asia. Requires HVDC bipolar +/-1,100 kV. Winter sunshine powers northern winter. Practical, not as ideal as summer sunshine, but some 1,100 kV HVDC components are now available so tantalisingly practical in the next few years.

    Pumped-storage hydro for energy storage with on-land generation

    Undersea hydrogen storage for energy storage with offshore generation – wind / tidal

    Carbon-neutral bio-fuels for transport such as dimethyl-ether (DME) from steam-reformed biomass

    Convert old vehicles, for transport by land, sea & air to run on bio-fuels

    New vehicles powered by hydrogen / electrical batteries / bio-fuels

    IceLink – Scotland-Iceland interconnector. Other interconnectors as appropriate.

    Portable nuclear
    Not strictly “renewable” and not at all “clean” especially if there is an accident admittedly, (though the pollution is not carbon dioxide nor other greenhouse gases). Nevertheless, nuclear power’s high energy and power per unit volume (energy density) and per unit mass (specific energy) make it irreplaceable for military submarines and aircraft carriers and also useful for high-power civilian uses – ice-breakers, tugs etc. There is however, no such excuse for static nuclear power stations for the grid, which is not worth the risk of a Chernobyl or Fukushima style accident .

    Nuclear-powered submarines, aircraft carriers and civilian high-power shipping, ice-breakers, tugs etc.

    Nuclear portable power-supplies for high-power applications in remote locations, such as powering tunnel-boring-machines or for emergency power in disaster-struck areas

    Scottish Scientist does not recommend –

    Forget Hinkley Point and all new nuclear plant for the grid. Portable nuclear only.

    Forget carbon-capture and storage from fossil-fuel burning power stations

    Pay for this by governments directing their central banks to create new money for such infrastructure investments – there’s no need to burden tax-payers, electricity bill-payers, travellers, hauliers, shipping companies etc.

    When the world is fossil-fuel free and if Europe & Africa still need much more power then make a mega tidal race by damming the Gibraltar Strait, installing water turbines and sea locks for shipping.

    Scottish Scientist
    Independent Scientific Adviser for Scotland

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