Britain could see its first ever Green Investment Bank if a proposal made by the government finance chief comes through. Environmental and business groups support the idea, saying it would help investment in renewable energy and sustainable development.
Finance chief Alistair Darling proposed a "Green Investment Bank" as part of the government's pre-budget proposals. The bank would be dedicated to funding low-carbon, eco-friendly projects and businesses.
Environmental organizations such as Greenpeace like the idea. Greenpeace Policy Director Robin Oakley says the government needs a bank with the right priorities.
"If it is focused on the green industries, if it is targeted in the right way and if it is bringing new money to the table then I think yes it is a very, very positive step and it shows real commitment from the government to deliver," he said.
Britain has already committed to substantial cuts in its carbon dioxide emissions. To achieve these targets, it needs heavy investment in green technology and low carbon projects.
Oakley says a green investment bank would help that along.
"Success would be boldness in setting targets and committing to reducing emissions so the industry knows what it has to do and at the same time underpinning that with government support to ensure that investment goes into the right type of technologies," he said.
Business groups in Britain are also encouraged by the proposal. "E3G" is a nonprofit organization that supports environmentally friendly solutions for businesses. Founder Nick Mabey believes investors will be encouraged to supply the money needed for low carbon projects if the bank is established.
"We need to invest around 800 billion pounds in new infrastructure in the UK to meet our climate change targets over the next 20 years," he said. "And we can't see that happening without a strong new institution to help give private investors a platform to work from."
Mabey says, however, the government must put adequate resources behind it.
The government has created a new body, Infrastructure UK, to look into the viability of such a bank. If created, Britain's new bank would be the only national bank in Europe dedicated wholly to green investment.