U.K. Set to Delay Green Finance Plan Amid Debate on Ambition

(Bloomberg) -- The U.K. government is set to delay its green finance strategy that’s supposed to drive billions of pounds of investment for tackling climate change.

The document, being written by the Treasury and Business department, was due to be published in the spring and now probably will be delayed because of wrangling about how ambitious it should be, according to people familiar with the matter.

U.K. Set to Delay Green Finance Plan Amid Debate on Ambition

The strategy is designed to complement the government’s climate change targets and comes at a time when the ministers are examining whether they can set a target to achieve net zero emissions. Businesses and investors this week urged Prime Minister Theresa May to ensure the strategy is far-reaching and delivered on time. They warned a delay could see the U.K. lose out on investment to China, France or the U.S.

One option could be to publish it in the first week of July, aligning with the U.K.’s Climate Action Week, according to two people with knowledge of the process.

A spokesman for the Treasury said an ambitious plan would be published shortly.

Extinction Protests

Pressure has been building from many angles for the government to act. Protests by the activist group Extinction Rebellion snarled London streets over the past few weeks. Bank of England Governor Mark Carney last month said “finance will complement -- and potentially amplify -- but never substitute for climate policy action.”

Aviva Investors, Church Commissioners for England and the Aldersgate Group, which lobbies for greater action on climate change on behalf of businesses, were among those who wrote to the prime minister calling for action. One of their requests was to use cash refunded from Europe after Brexit to create a new finance vehicle for tackling climate change.

Under May’s Withdrawal Agreement, the U.K. will get back 3.5 billion euros ($3.9 billion) of capital that it has already paid into the European Investment Bank. That money is due to be paid back in 12 annual installments -- with the first 300 million euros coming in December 2019.

“As we leave the European Union, we face a potential infrastructure investment gap in the billions of pounds,” the letter said.

Before voting to quit the EU, Britain was the biggest recipient of the EIB’s Climate Awareness Bond Project. The U.K. took 24 percent of the 7.2 billion euros ($7.9 billion) invested by the Luxembourg-based development bank in renewable energy and energy efficiency projects worldwide since 2007, according to the EIB.

U.K. Set to Delay Green Finance Plan Amid Debate on Ambition

Two weeks of climate protests saw activists target Goldman Sachs Group Inc., the Treasury and glue themselves to the London Stock Exchange. That has added to pressure on the government to step up its response to the growing threats of climate change.

Environment Secretary Michael Gove this week told 16 year-old activist Greta Thunburg that he would push for stronger action and admitted the government has not done enough. Gove is among those urging the Treasury to ensure it delivers an ambitious green finance strategy, two people said.

©2019 Bloomberg L.P.