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Less than half of the investment required for the UK to meet its national and international emissions reduction targets is being provided, MPs have warned.
The Environmental Audit Committee (EAC) said in a new report that less than half of the £200 billion investment needed in energy infrastructure by 2020 to ensure the UK meets its decarbonisation goals is being provided.
The report urged the government to remove some of the risk associated with green finance by providing a “joined-up, stable and certain policy framework”.
The EAC also stated the government should “abandon its review of the fourth carbon budget” and set a 2030 decarbonisation target and indicative funding levels under the Levy Control Framework until that date.
The MPs also called on the government to stick by its pledge to allow the UK Green Investment Bank (GIB) to borrow from 2015/16 – something MPs said it is currently unable to do – which would then allow it to help it fill the “green finance gap”.
Chair of the EAC, Joan Walley, said: “Allowing the GIB to borrow would boost green investment and create jobs, and should not be delayed even if public debt is flat rather than falling in 2015/16.”
The EAC report also warned that stock markets could be creating a “carbon bubble” by over-valuing companies that produce and use carbon.
Walley said: “The UK government and Bank of England must not be complacent about the risks of carbon exposure in the world economy.
“Financial stability could be threatened if shares in fossil fuel companies turn out to be over-valued because the bulk of their oil, coal and gas reserves cannot be burnt without further destabilising the climate.”
The MPs recommended that the Bank of England’s Financial Policy Committee should seek advice from the Committee on Climate Change to help it monitor the “systemic risk to financial stability” associated with a carbon bubble, and that the government should ensure that company reports provide investors with information required to assess carbon exposure.
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