A new report released today reveals the scale of the green investment challenge facing the UK.
The Green Investment Gap report, released by environmental think tank Public Interest Research Centre (PIRC), finds that the UK devoted just £12.6bn towards green investment in 2009-10.This figure amounts to less than 1% of UK GDP; less than what Britain spends on furniture annually; and less than half the annual green investment needed over the next decade to build the green economy.
“These figures reveal, for the first time, the size of the green investment challenge facing the UK,” said PIRC’s Director, Guy Shrubsole. “But they also show the size of the opportunity awaiting the country. At a time when the future of our national energy system is being reconsidered, in the wake of record oil prices and the Japanese nuclear accident, we would be foolish not to invest more in clean energy options.
“We don’t invest enough currently, but if we are serious about creating green jobs, insulating the country against oil shocks, and tackling climate change, we need to invest more. Green investment should be central to the government’s strategy for a sustainable economic recovery. To ensure that happens, the Chancellor needs to announce a strong Green Investment Bank
in tomorrow’s Budget.”
The report recommends that government, industry and the third sector work
• produce an annual audit of green investment;
• commit to closing the green investment gap facing the UK;
• legislate for a strong, public Green Investment Bank with the ability to
borrow and lend.
Investing sufficiently to meet our 2020 targets for emissions reduction, renewable energy and energy efficiency would result in:
• Greenhouse gas emissions declining by 34% on 1990 levels.
• The creation of hundreds of thousands of new green jobs. The Department of Energy and Climate Change estimate 250,000 green jobs will be created in energy efficiency industries over the next 20 years, whilst the Offshore Valuation Group estimates the potential for 145,000 jobs in the offshore wind industry over the next four decades.
• Insulation against oil and gas price shocks. The government estimates that a doubling of the oil price (from $90/bl to $180/bl) would result in a cumulative loss of GDP of £45bn over 2 years.
The Green Investment Gap also shows that:
• Public sector green investment was £6.7bn in 2009-10, whilst private sector green investment was £5.9bn.
• Green spending by the private sector, third sector and households all show positive trends in recent decades, but the public sector is making up for lost investment following privatisation of the energy utilities in the 1980s and 1990s.
• Other investment decisions show up the small scale of UK green investment. For example, the UK spends £35.3bn on defence, and is likely to spend £100bn on decommissioning old nuclear power stations and oil and gas infrastructure.
• The UK lags behind other countries in green investment: South Korea, for instance, is devoting 2% of its GDP to financing clean technologies.
Public Interest Research Centre (PIRC) is an environmental think tank, dedicated to producing research and advocacy on climate change, energy and sustainability issues.
The full report is available HERE