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Special Report: SRI - Powering towards a low-carbon future
With the Copenhagen Climate Summit just around the corner, but the world's governments still very focused on economic recovery, many more policymakers are seeing the need to address economic and climate change challenges at the same time.
A public infrastructure bank: This would co-ordinate an expansion of public-private partnerships to fund as much as £500bn of investment in UK infrastructure over the next 10 years. The Liberal Democrat's Vince Cable has backed this proposal. Set up by the government and modelled on European development banks such as KfW in Germany or ICO in Spain, its role would be to operate on a commercial basis, but provide a proportion of the capital required for low-carbon investments, implicitly taking on some of the policy risk, in private finance initiatives for infrastructure or multi-bank project finance deals for low-carbon energy supply
Green bonds: The government could issue specific Treasury gilts or guaranteed retail savings bonds that would raise finance for low-carbon investments. Meanwhile, the World Bank has backed an issue of 'green' bonds from the Swedish SEB. The California State Pension Scheme snapped up $300m (£187m) of them
Asset-backed bonds: These would be for renewables or energy-efficiency programmes, with a revenue stream of a feed-in-tariff or energy bill savings effectively repaying the bond over a long period. This type of structure could ensure the financing comes off the public-sector balance sheet and provide confidence in the security of the returns
Index-linked bonds: The government could issue index-linked bonds, which would be tied to either the carbon price or delivery of carbon targets. If the price of carbon fell below a certain pre-defined floor price, the return on the bond would increase
Green Isas: The Conservative party has already floated the idea of establishing and giving greater incentives for saving in a green Isa
