Source · Select Committees · Treasury Committee
Recommendation 4
4
Paragraph: 46
The Chancellor should publish the Net Zero Strategy as soon as possible and should set...
Recommendation
The Chancellor should publish the Net Zero Strategy as soon as possible and should set out, in conjunction with the Net Zero Review final report, the principles upon which the UK will fund its transition to net zero carbon emissions by 2050.
Paragraph Reference:
46
Government Response
Acknowledged
HM Government
Acknowledged
The Government has always remained open to the introduction of new debt financing instruments, including green bonds. However, before doing so the Government would need to be satisfied that any new instrument would meet value-for-money criteria for the taxpayer, enjoy strong and sustained demand in the long term, and be consistent with debt management and wider fiscal objectives. After carefully monitoring how the sovereign green bond market has developed over recent years and conducting a detailed assessment against these criteria, the Treasury and UK Debt Management Office (DMO) believe that now is the right time to issue this type of instrument. At Budget the Chancellor announced the UK’s commitment to issue at least £15bn of green gilts in FY 2021/22, as the UK looks to build out a green yield curve, and to report on the social co-benefits of green spend. While the UK is by no means the first sovereign to enter this market, this announcement demonstrates the UK’s ambition to be a large, innovative issuer in this space. In addition, on 30 June, the UK Government Green Financing Framework–under which the UK will issue green gilts and National Savings & Investments’ (NS&I) Green Savings Bonds–was published. This ambitious document details how proceeds raised from these products will be used for financing green expenditures which will help tackle climate change and other environmental challenges while creating green jobs across the UK. It