Finance a Green New Deal
Government-led investment is vital – here are five ways to pay.
The UK needs a Green New Deal – an unprecedented mobilisation of resources to decarbonise the economy, while raising living standards. Government-led investment will be vital. We must usher in a new era of bold fiscal policy, with government taxing, spending and investing to crowd-in private finance and business investment.
Here are five ways to pay for a Green New Deal:
It has never been cheaper for the UK government to borrow than it is today. Borrowing is an incredibly fair way to pay for a Green New Deal. It means taxpayers now and taxpayers in the future each contribute their fair share towards a sustainable economy.
If invested in the right way, and in productive parts of the economy, green investments could create new jobs and increase tax receipts. Eventually, the benefits of these projects will pay for themselves.
In the UK, we tax income from wealth much less than we tax income from work. We’ve got significant scope to raise taxes on the wealthiest, as well as on damaging carbon activities while they still exist, increasing the funds available for a Green New Deal.
The UK has the biggest fossil fuel subsidies in Europe, dwarfing what government currently spends on renewables. These subsidies could be redirected towards decarbonising the economy.
- Central banks
The Bank of England can lend to the government at cheap rates and help lower its long-term borrowing cost, while also encouraging private lenders to move their money away from environmentally damaging activities and towards sustainable ones.
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