Britain's green savings bond to help fuel country's future

2021-03-02 12:05:10

  Britain's Prime Minister Boris Johnson and Britain's Chancellor of the Exchequer Rishi Sunak visit the headquarters of Octopus Energy, in London, Britain on Oct 5, 2020. [Photo/Agencies] Britain is poised to become the first country in the world to offer a special savings bond specifically aimed at helping the country move towards a greener future and net zero carbon emissions by 2050. In his budget speech on Wednesday, Chancellor of the Exchequer Rishi Sunak will announce three programs that will be funded by the Net Zero Innovation Portfolio, which aims to bring in one billion pounds' worth ($1.39 billion) of investment, to be spent on projects including clean transport and renewable energy. Other destinations for the money raised include twenty million pounds to go towards a competition to develop off shore wind projects, to be deployed in deeper waters, where they will have to deal with stronger winds. This is part of the government's plan to produce enough off-shore wind energy to power every home in the country by 2030. Last year, Prime Minister Boris Johnson unveiled a 10-point plan to make the economy greener, pledging 12 billion pounds to support the initiative, but political opponents criticized it as insubstantial, and Chris Stark, chief executive of government advisory body the Committee on Climate Change, called it "a vision, not a plan," which might help along the way to achieving net zero emissions, but would need action to back up the words. "The UK is a global leader on tackling climate change, with a clear target to reach net zero by 2050 and a 10-Point Plan to create green jobs as we transition to a greener future," said Sunak, announcing the new bond. "In a world first, we're launching a new green savings bond which will give people across the UK the opportunity to contribute to the collective effort to tackle climate change. "And we're also launching new competitions that will unlock innovation in renewable energy and help us develop the cutting-edge technology we need to reach net zero." The new investment opportunity, which is expected to go on sale later in the year, comes months before world leaders are scheduled to come to the United Kingdom for the United Nations climate conference, COP26, in Glasgow in November. Specific details of how the bonds will operate have not yet been made public, but Mitch Reznick, head of sustainable fixed income at Federated Hermes, told the Financial Times that the British government would "unequivocally" want the first green gilts issued before COP26 happens. "Green gilts will be sold into a pretty friendly environment," he said.