“We have begun the process of establishing the Green Investment Bank,” Gregory Barker told a CBI event. “We are currently studying a wide range of options. We are also looking at the option of it being commercially independent,” he added, declining to give further details.
The government hopes the establishment of a “green bank” will help it meet its 2020 goals to cut carbon emissions and reduce the use of fossil fuels. Three departments – the Treasury, the Department for Business Innovation and Skills and the Department of Energy and Climate Change – are working on plans for the bank.
Barker would not comment on when the bank would be formed but said the government would publish its proposals later in the year.
“We need to understand the implications of the Carbon Reduction Commitment first,” he said, referring to Britain’s new mandatory corporate carbon trading scheme.
An independent report in June said Britain may need up to £550bn of investment through 2020 to fund the shift to a low-carbon economy.
It said a “green bank” funded by new consumer levies, the sale of emissions permits to industry and new investment products would help plug the gap.