Issues raising finance could threaten CO2 reduction hopes

News Article - 15 July 2011
Category: Environment

Difficulties raising finance is one of the biggest contributing factors holding back carbon reduction amongst UK businesses, a Deloitte partner has said.

Andrew Kaye, an energy partner at Deloitte, revealed at the renewables 2011 conference that market failure was more pronounced in the green industry which therefore slowed investment in environmental technology.

Mr Kaye insisted the Green Investment Bank must be operational by April 2012 in order for the UK to meet its CO² reduction targets of 20 per cent from 1990 levels by 2020.

Kaye added: "There are several financing issues acting as constraints on the level and speed of low carbon investment, in particular both corporate and bank balance capacity and risk appetite for some green technologies.

"Market failure is more pronounced in green infrastructure as there is a need for significant up front capital investment which is reliant on long-term Government policy."

Kaye's fears may well be eased by the announcement of a set of reforms to liberalise the energy market and encourage strong investment in all forms of low carbon power. The white paper proposed by Energy Minister, Charles Hendry, aims to decarbonise Britain's power sector and lower energy costs to businesses and consumers.

It is hoped the white paper will go some way to addressing the reform of the electricity market and improve clarity over future energy tariffs.

Kaye believes that the Green Investment Bank is a positive step toward addressing market failure. The Green Investment Bank is a key commitment from the Coalition to achieving transition to a greener economy whilst simultaneously delivering long-term sustainable growth.

"The Green Investment Bank is one of a suite of measures aimed at addressing this market failure and will seek to bring forward and increase private sector investment into green projects through co-investing, co-lending and risk mitigation," said Kaye.

Article keywords: Carbon reduction, Deloitte, Andrew Kaye, environmental technology, Green Investment Bank, CO2 reduction, Charles Hendry

---

More industry news

• Think tank warns UK may have already slipped back into recession
• Growing demand for HR staff in technology and international sectors
• Boosting business growth a ‘priority’ to avoid Eurozone slowdown
• HMRC launches alternative disputes pilot scheme this week
• December employment statistics disregard gloomy recruitment predictions
• Eurozone manufacturing PMI shows modest improvement
• UK scores highly for economic governance by ratings agency
• Government launches two-year project focusing on manufacturing sector
• Burden of regulation on UK businesses ‘too high’

Back to news home page »