Green Finance - Environmental Audit Committee Contents


Recommendations


12.  The Government needs to play a central role in agreeing ambitious and binding international commitments on tackling climate change, both in the EU and in the lead up to the UNFCCC conference in Paris in 2015. Domestically, the Government should announce immediately that following the advice from the Committee on Climate Change there is no rationale for any review of the Fourth Carbon Budget. (Paragraph 5)

13.  The Government should vote in favour of binding national renewables targets at the EU Council. (Paragraph 8)

14.  The Government should make the changes recommended by the Committee on Climate Change to bring greater longer-term certainty for investment—an early energy-intensity target for electricity generation and an extension of the Levy Control Framework and indicative funding levels to 2030. The Government should reiterate its commitment to the already planned escalation of the carbon price floor and use the implementation of the Electricity Market Reform to make a clear commitment to avoiding further unplanned regulatory and subsidy changes for low-carbon energy. (Paragraph 25)

15.  The Financial Policy Committee of the Bank of England should regularly consult with the Committee on Climate Change to help it monitor the risks to financial stability associated with a carbon bubble. (Paragraph 31)

16.  The Government should work with companies to ensure that reporting requirements provide investors with all of the information they require to assess carbon risk, and develop the standard reporting requirements further. (Paragraph 35)

17.  The Government must make an early and clear statement about the Green Investment Bank's long-term future, beyond the 2015-16 horizon of its Spending Review funding settlement. The Government should declare in Budget 2014, on the basis of the flat projections for Government debt in the last Autumn Statement remaining valid, that the Bank will be permitted to borrow in 2015-16. (Paragraph 50)

18.  The Government should make the Green Deal simpler and more attractive to households in order to achieve the level of scale-up required. Steps could include significantly reducing the assessment fee and the interest rate on the Green Deal loan, to be more in line with the terms of the Help to Buy scheme equity loans which start at 1.75%. (Paragraph 54)

19.  The Government has spent a long time talking about extending the remit of the Green Investment Bank to community energy without being able to show any progress. The Government should prepare and submit the relevant information to the Commission to secure State Aid approval for these additional areas of activity for the Green Investment Bank as quickly as possible and should work with the Green Investment Bank to develop effective aggregation methods to facilitate smaller scale lending. (Paragraph 56)

20.  The Government should work with the European Commission to ensure its proposals to reduce the threshold for small-scale feed-in tariffs are not carried through. The first priorities of the new Community Energy Unit in DECC should be to seek early State Aid approval for the Green Investment Bank to invest in community energy, and to actively engage with other departments—including DCLG and the Treasury—to ensure that all local authorities have the tools and resources to play a full part in making such schemes a widespread and successful part of the UK energy mix. It should prioritise initiatives to allow community energy producers to directly supply energy at lower prices to local communities, and work with Ofgem to make it mandatory for District Network Operators to work with License lite and set fixed fees for this. (Paragraph 62)

21.  We urge the Government to look positively at ways of overcoming the problems relating [to redirecting Quantitative Easing and securing the international support needed to introduce a financial transaction tax]. (Paragraph 69)

22.  The Government should publish a single overall strategy to refocus and direct all relevant policies towards this essential task of mobilising action on reducing carbon emissions, as it started to do in Enabling the Transition to a Green Economy. It should re-visit that document to evaluate progress and identify areas for improvement, as well as extending it further. It should monitor and report on overall progress across the full range of green energy and infrastructure investment, in the same way as it reports annually on the National Infrastructure Plan. Working to a single strategy would create greater certainty and a more favourable investment outlook by bringing together and aligning:

·  The UK's position in international negotiations on emissions reduction and climate change;

·  Action needed to deliver our carbon budget commitments and Climate Change Act obligations;

·  Industrial Strategies;

·  The National Infrastructure Plan;

·  The Infrastructure Guarantee .programme;

·  The Green Investment Bank's role and the scope of the projects it supports;

·  Opportunities to take advantage of and direct EU funding towards green infrastructure;

·  Green-proofing Government grants, including the Regional Growth Fund and LEPs;

·  Community energy;

·  Funding for adaption to climate change. (Paragraph 73)


 
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Prepared 6 March 2014