[Photo Credit: vaxomatic]
2012 was the second most prosperous year in history when it came to global green investment projects and the policies of UK governments. It is likely to see future years improving at a similar rate, both in the dedication to green investment policies and in respective governments worldwide. According to figures from Bloomberg New Energy Finance, a total of $268bn was capitalised throughout the year on schemes ranging from off-shore wind turbines to biofuels and anaerobic digesters.
Partaking in this ever expanding investment opportunity should be top on every investor’s priority list. The market can only progress, and with the UK government pledging to reduce carbon emissions significantly by 2020, now may be the best time jump on the green investment bandwagon.
While there are numerous routes investors can go down to get involved in these types of projects, one of the most difficult obstacles to overcome is gaining the correct finance for the initial cost structure and ongoing costs. This is where the Green Investment Bank plays a key role. The government has acknowledged the necessity for a new banking structure designed to meet the prerequisites of the green investor. With this area being so new and rather experimental, the regular banking environment is not always the best environment and service for this type of investment.
The Green Investment Bank is meets the need for realistically priced investment capital in a market where money is hard to happen upon and where utility companies are often too overextended or unwilling to intercede and contribute. It will provide funding to projects which meet the criteria of being low carbon and sustainable and will be subsidised by an amalgamation of private investment and government funds.
With government policies striving to provide a plausible investment solution for those prepared to put their money towards green projects, the future certainly looks prosperous for the green investment sector. In addition to this, the fact that the price of oil is on the rise, the environmental and societal costs of gas and coal are not likely to improve, it does seem that the only alternative for an ethical investor is to take advantage of the growing green investment sector.
The leader of the UK Green Party (and MP for Brighton Pavilion) Caroline Lucas, recently critiqued the classification of the GIB in January 2011, when she wrote that "It's a bit rich to call [the GIB] a green investment bank if it can neither borrow nor lend". Lucas contended that without these powers, "it would be a fund – that is, a pot of money that, once used up, is gone forever."
Nonetheless, it is rather significant that part of the rapid development of renewable energy companies is due to the government offered subsidies, (which are may not be maintained in the long term). Often when there are discussions which surround rising heating prices the funds for green incentivising are the first to go. The issue about these types of investments being so closely tied to social, economic and political issues is that you do run the risk of them falling victim to an abrupt shift in the state of affairs. For instance, the Spanish government changing its standpoint regarding green funding.
Generally, this shift towards green technology on a grand scale, should mean that green investments are a wise choice. If green investment is something that you are seriously considering as a personal investment, or for your company, then click here for further information about investment management. This could be a smart move, especially if you want a good return in investment (and who doesn’t).