A publicly-owned Royal Bank of Scotland (RBS) could fill the funding gap in renewable energy projects and 'kick-start' a green economy, if it was turned into the Green Investment Bank, say campaigners.
The previous Labour Government had promised to introduce a Green Investment Bank (GIB) and provide credit to help fund more low-carbon developments but there are now fears the current Government may scrap those plans for favour of a bank relying purely on private capital.
Campaign groups Platform and World Development Movement (WDM) argue that RBS, 83 per cent owned by the taxpayer, is already sitting on 'billions of pounds' of public money that could be redirected towards projects such as wind farms, high-speed rail and electric cars.
They commissioned a report by a former PricewaterhouseCoopers consultant and WWF policy advisor, published today, which argues that a refocused RBS could act as a role model for how banks should operate in the future.
'The UK can't afford another meltdown, yet short-term, high risk, carbon intensive investments are still business as usual for the banks,' says the report, 'A Bank for the Future – Maximising public investment in a low carbon economy'.
'A strong GIB is a critical element in establishing a more sustainable economy which is less susceptible to creating further fiscal pain.'
UK needs green economy
The report says that the UK lags behind other European countries in terms of its investment in the low-carbon sector, with an estimated £200 billion of investment needed over the next decade if the UK hopes to meet its greenhouse gas emissions reduction target of 80 per cent by 2050.
With the current budget pressures in the UK, RBS, with its capital, assets and infrastructure already in place, offers an opportunity to quickly rationalise the Government's financial support for the low-carbon economy under a new GIB.
WDM director Deborah Doane described the proposal as 'a no-brainer'. 'Not only would it not cost the taxpayer directly, it would boost the economy and create new jobs in the UK at a much-needed time,' she said.
'Dirtiest bank in Britain'
WDM and Platform have previously criticised RBS for continuing to fund environmentally-damaging projects after being bailed out with taxpayers' money in 2008. Since then it is thought to have loaned an estimated £10 billion to coal, oil and gas companies, including an opencast coalmine in Bangladesh, oil exploration in war-torn central Africa and £6 billion to Kingsnorth coal-fired power station operators, E.ON.
The campaign groups have twice attempted to bring a high court action against the bank for these investments claiming they breached Treasury policy to limit emisisons and tackle climate change.
However, a judge refused to proceed to a judicial review, upholding the Treasury’s argument that the bank should be run in a ‘commercial’ manner.
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