The latest figures for low-carbon energy investment show that there has been a ‘dramatic and worrying collapse’ since 2015 that threatens the UK’s ability to meet its carbon budgets. In cash terms, investment in clean energy fell by 10% in 2016 and 56% in 2017.
Annual investment in clean energy is now at its lowest since 2008, with the committee saying huge policy and investment challenges remain in decarbonising transport, domestic heating and industry.
The report also criticises government policy such as the Clean Growth Strategy, which it says does not do enough to meet legally binding climate change targets, even if all its policies are delivered in full.
The committee has called on the government to remain part of the European Investment Bank post-Brexit, which it says would allow riskier early-stage green infrastructure projects in the UK continued access to development bank finance.
They also say the issuing of a ‘sovereign green bond’ could present an opportunity for the government to ‘set a benchmark of good practice for domestic green bonds to be a useful mechanism to raise the capital necessary to deliver our carbon budgets.
The report calls on Ministers to urgently plug this policy gap and publish a delivery plan to secure the investment needed to meet the fourth and fifth carbon budgets.
Mary Creagh, chair of the environmental audit committee, said: ‘Billions of pounds of investment is needed in clean energy, transport, heating and industry to meet our carbon targets. But a dramatic fall in investment is threatening the Government’s ability to meet legally binding climate change targets. 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.’
James Court, head of policy at the Renewable Energy Association, said:
‘This report perfectly chimes with the reality that our members are feeling. There is a real frustration that at a time of renewable costs plummeting and other countries steaming ahead, the UK is going backwards. Government must now move forward quickly by implementing the recommendations of the Green Finance Task Force that reported back in March.
‘Renewables are now cheaper than building new gas and nuclear generation, yet the decisions of the last three years will have an impact on not only the UK hitting our climate targets, but whether we will have a cheaper, cleaner, smarter and future-proofed energy system, and the jobs and investment that come with that.’