The Government last week announced another big idea for the environment sector, a "Green Investment Bank" owned and funded by Government to promote clean industry and technology. Like all these ideas, first impressions are good. The Government is seen to be doing things, it is an easy headline to convey and understand and it is always applauded by those from the industry.
However, it is another bad idea and a waste of money. Why?
We are awash with some very good clean technologies and have been for some time. We really don't need more money in new ventures but we do need money to create the markets for clean technologies in existence. That means, rather than throwing money at a headline grabbing bank, why not spend the money creating markets that will advance existing, new technologies. This website has always said that one of the best platforms to a low carbon future is through the deployment of public procurement programmes. The public sector in most Western countries hovers at between 30-40% of GDP. If only a part of that spend were dedicated to advancing clean tech projects (think cars, think buildings, think smart grid), then the public sector will create markets that will help reduce unit costs for clean tech and therefore accelerate the deployment of clean tech products to the private sector. Then the risks of early stage clean tech can stay with the private sector which has always better understood better the risk/ reward for these kind of investments.
What makes the idea of a bank feel so old is that clean tech public procurement strategies have worked. In the US all federal buildings have to meet a standard of sustainability otherwise leases aren't renewed. Guess what? Landlords are spending money make buildings more sustainable. The security of a government tennant is just too attractive. The UK Government should use its money in the same way. After all it owns enough banks, so it doesn't need another one.
