UK Government blamed for “dramatic” collapse of country’s green investment landscape

The UK Government has been blamed for the “dramatic and worrying collapse” in the country’s green investments following widely criticised changes to its low carbon energy policy in 2015. 
The report by the Environmental Audit Committee, appointed by the House of Commons to examine the effect of policy decisions on sustainable development, found that the changes – which included removing rate relief schemes and reducing subsidies for renewables – “undermined investor confidence and led to a reduction in the number of projects in development”.
The committee, Chaired by Labour MP, Mary Creagh, is now urging the Government to outline how it will secure the investment needed to realise the country’s legally-binding carbon targets beyond 2022. 
It warned that the Government’s recently published (October 2017) Clean Growth Strategy alone will not be sufficient to plug the gap exacerbated by the ‘poor’ policy decisions. 
Green investments in the UK have fallen year-on-year since 2015, plummeting 10% in 2016 and 56% in 2017. They have now reached their lowest level since 2008.
Brexit is also identified, in the report, as a likely cause of disruption to green financing, along with the privatisation of the state-owned UK Green Investment Bank (GIB), which controversially sold to Australian infrastructure giant Macquarie in 2017 for £2.3bn. 
The committee warned that Brexit – and the general lack of Government commitment – is also a potential threat to the UK’s carbon pricing policies, which the report sees as an “extremely effective” tool in driving decarbonisation.Ministers are urged to “set out a trajectory to gradually increase the carbon price – starting after the current freeze on Carbon Price Support comes to an end in 2021”.
Several other recommendations are put forward by the committee, including issuing a sovereign green bond – an idea recently mooted by the UK Government-backed Green Finance Taskforce – and preserving the UK’s relationship with the European Investment Bank after Brexit so that green infrastructure projects in the country can access finance amid concerns that the GIB’s “new international focus may mean less direct investment in the UK”. The authors also call for Government to set out of a timetable for the introduction of “authoritative standards on green financial products”, aimed at safeguarding the green credentials of investments for investors, and keeping up with current efforts on green standards at EU level.
Creagh, who described the Government’s Clean Growth Strategy as “long on aspiration, but short on detail”, said: “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”. She continued: “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 kick-start its Clean Growth Strategy”.