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.
Policy in practice
Projects that demonstrate the benefits or may be helped by polices like this.
Schools’ Energy Co-operative
Schools’ Energy Co-operative has installed solar panels on schools across the country, working with a network of local groups.
Co-op is the largest local authority and community solar energy and battery storage project in the UK.
Hackney Energy works with residents to build community-owned solar power.
YnNi Teg develops and builds renewable energy generators in Wales, funded by community shares.
Isle of Eigg
Community-owned Eigg has been labelled Britain's most eco-friendly island.
Eckington Against Fracking
Local residents battle multinational chemicals giant Ineos to prevent fracking.
Lilac – Low Impact Living Affordable Community
Lilac is a environmentally-friendly housing co-op with an innovative funding model.
Winner of the 2019 RIBA Stirling prize, these eco-friendly homes are one of the first new council housing projects in a generation.
East Lothian company aims to take on the Big Six energy suppliers and give profits back to customers.