Britain is failing to attract the level of investment needed to build a low-carbon infrastructure and meet emissions reduction targets, according to a leading business body.
The Confederation of British Industry (CBI) had previously forecast that Britain needed £150bn from the private sector over the next 20 years – and today warns that the country is in danger of losing out on that investment to other countries.
A report titled Risky Business: Investing In The UK's Low-Carbon Infrastructure, said senior businessmen were not convinced the UK could raise the financing needed at the pace required.
The Government's response would be critical and would have a huge impact on the cost of energy for consumers and businesses, the creation of new industries and changing lifestyles, the report added.
Katja Hall, the chief policy director for the CBI, said: "We know the UK needs a balanced energy mix to cut emissions and grow the low-carbon economy, but the big question now is how we pay for it."
The Government is already consulting on electricity market reform, which the CBI believes is a "positive start", but it called for further action. "It is particularly important that the planning system delivers timely decisions and there are no more sudden policy shifts as we saw with the Carbon Reduction Commitment," Ms Hall said.
Beyond a long-term plan to increase low-carbon investment in Britain, the CBI said that, until the establishment of the Major Infrastructure Planning Unit, the Infrastructure Planning Commission needed to make decisions on the backlog of energy infrastructure projects waiting approval.
The planned Green Investment Bank also needed to issue bonds "as soon as possible" to provide a bridge between pension funds and technologies that needed huge amounts of capital, it said.
Britain's spending of about £2bn on cutting carbon emissions has failed to match that of other European countries during the recession. "The scale of the investment needed was never going to be solely met by the public purse," the CBI said. The CBI report was drawn up with the accountancy group Accenture.Reuse content