Treasury Committee opens inquiry on decarbonisation and green finance

The Treasury Committee has launched an inquiry into the decarbonisation of the UK economy and green finance. It will scrutinise the role of HM Treasury, regulators and financial services firms in supporting the Government’s climate change commitments. It will also examine the economic potential of decarbonisation for the UK economy in terms of job creation and growth.

The inquiry comes as the government was accused of seeking to dodge carbon reduction targets by ‘carrying over’ reductions from one period into the next, instead of retiring the excess. That proposal was said to be instigated by the Treasury, which has often been seen as the blocker to renewables and carbon reduction measures.

The Committee is accepting written evidence on its website until 26th July from financial services firms, think tanks, regulators and government representatives.

Commenting on the launch of the inquiry, Rt Hon. Nicky Morgan MP, chair of the Treasury Committee, said: “Whilst decarbonising the UK economy presents significant challenges, it also provides an opportunity for the financial services sector to unlock its green potential. This inquiry will examine how HM Treasury and financial sector firms can support the UK to lead the way in green finance and environmental innovation. Decarbonising an economy doesn’t mean it has to stop growing. The time is ripe to explore how we can make sure that the UK gets this right.”

Simon Clarke MP, Member of the Treasury Committee, said: “Both the public and private sectors have vital roles to play in transitioning to a decarbonised economy. The Committee on Climate Change has called on HM Treasury to review how the transition will be funded and where the costs will fall, especially if we are to deliver net zero carbon emissions by 2050.” He said, “The financial services sector, through various forms of green finance, can help the City become a global leader.”

The inquiry will cover:

  • The economic opportunity that decarbonisation presents for the UK, and the potential of the green finance sector
  • HMT’s strategy in facilitating clean growth and its response to the CCC’s net-zero recommendations
  • The role of the Spending Review in facilitating net-zero
  • The role that financial services firms are currently playing in financing the transition
  • The ‘green’ financial product landscape, and their associated regulatory environment

Among the Committee’s key questions are:

What benefits can a growth of the Green Finance sector deliver for the UK, and does the UK hold a competitive advantage in this space?

How should HMT’s approach evolve to ensure the Government meets the legally binding carbon budgets (and the net-zero targets, if applicable)What role should the 2019

What steps have UK banks, asset managers, and pension funds taken to ‘green’ their business models, investments strategies and balance sheets, taking in to account climate and transition risks.

What expectations do (and should) they place on regulated firms about their role in the transition through their policy and supervisory activities?

What is the consumer demand for ‘green’ financial products?

See the inquiry website here

Further reading:

Clean energy is the UK’s biggest Brexit opportunity

Green finance collapses: government must act now to plug growing gap, says EAC

CCC’s net zero target: the industry responds

Time to leave energy ‘evolution’ behind and lead the revolution

Supply chain says onshore wind CfDs would give £1.6B ‘consumer payback’

OPINION: We must help innovators take the next step

 

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