Today's FT reports that Energy Secretary Chris Huhne and Business Secretary Vince Cable are at loggerheads over the mandate for the GIB.
Apparently Cable wants it to stick to solar, wind farms, and energy efficiency. Huhne wants the bank to go further and support newer technologies in wave and tidal power.
What both seem to miss out is the opportunity for the GIB to support low carbon/green manufacturing and decarbonisation of manufacturing processes.
With the government announcing in March the GIB won't be able to borrow until 2015, does it really make sense to focus on energy infrastructure, which necessarily will require very large investments? Until it can borrow, the GIB will be restricted to its £1 billion in funding (+ asset sales at some point) and whatever it can lever in from the private sector in co-investment.
If you buy the Green Investment Bank Commission's analysis of the energy infrastructure investment deficit out to 2025, the investment need is in the 10s if not 100s of £ billions.
On the other hand, the opportunities created by climate change are leading many manufacturers to look at developing innovative green products in the UK. Like many new innovative manufacturers, low carbon manufacturers often struggle to access the finance they need to help their business grow through standard financial sources.
So by having a mandate that includes supporting low carbon manufacturing, the GIB would help these firms develop – and that seems a more realistic prospect in the short term with restricted funding than making an impression on our energy infrastructure.
Decarbonisation is a further opportunity missed. Making their processes less carbon intensive would be more attractive to UK manufacturers if this was backed by the GIB.
It's a missed opportunity that particularly sticks in the craw given Huhne's 4th carbon budget, out today, also hits UK manufacturers over the head and sticks out our neck on climate policy even further from our European friends (who in turn are well out of line with the rest of the world).