In late May, The City broke with some 350 years of protocol and announced the establishment of the Green Investment Bank, the first ever public bank in the UK. With an initial £3 billion, GIB will invest in clean energy technology, with the goal of lessening the country's reliance on fossil fuel and developing technologies to keep the UK competitive in the economies of the future.
This support for green energy investment stretches across the Atlantic: A similar effort in the US, known as the Clean Energy Deployment Administration (CEDA) has won support from both liberal environmentalists and the conservative US Chamber of Commerce, the largest business lobby in the US. The independent agency would take the lead in clean-energy investments by providing credit in the form of loans and loan guarantees.
Back in the UK, the Green Investment Bank has won broad support from all corners: green-minded advocates, private sector businessmen, trade unionists and top-level ministers alike - even as fiscal austerity measures have demanded sharp cuts across government programs.
When a coalition supporting the GIB finally formed, "there was common ground between Conservatives and Liberal Democrats, and that helped make [the case] to those with a modernist, progressive background - those prepared to follow the new coalition government of Nick Clegg and David Cameron," said James Cameron, a member of a the Green Bank Investment Commission, an independent government advisory group and the founder and executive director of Climate Change Capital, an investment management and advisory group focusing on low-carbon concerns. "There was a very strong emphasis on environment, climate change, green energy - and in middle of that, they made an agreement on the Green Investment Bank."
Cameron added, "What's clever about the GIB is that it appeals to those who think the public sector is never going to deliver and those who think we could do public policy better with different delivery mechanisms. It had really strong support, partly because it appealed to various parties at once."
Across the Atlantic, it is unclear whether CEDA will have enough cross-party appeal to become a reality. In early May, Republican Senator Lisa Murkowski (Maine) and Democratic Senator Jeff Bingaman (New Mexico) sponsored hearings on CEDA, and the proposal is scheduled to be marked up later this month - a sign that CEDA may soon make its way out of committee and onto the floor of the Senate.
And in recent weeks, US President Barack Obama has embraced the theme of innovation - as well as government support for new technologies - signaling White House support for efforts like the CEDA that might deliver on cutting-edge technology.
Yet just as clean energy investment would seem to be picking up momentum on both sides of the pond, insiders on Capitol Hill have voiced deep skepticism that an American clean energy bank can be established any time soon - owing in large part to the current political stalemate in the US Congress and a strikingly different public perception of the global energy crisis. Whereas climate change is an accepted truth in the United Kingdom, it still remains a topic of debate in the United States - and a hotly contested one at that.
Ed Matthew, the founder of the campaign for Green Investment Bank and Director of Transform UK, an alliance focused on accelerating low-carbon investments, said that amid a gloomy economic climate, there remains "a high level of concern in the UK about the costs of fossil fuels. There is nobody [here] who thinks a reliance on fossil fuels will lead to a low-cost energy future. There's a real appreciation that we need to move to low-carbon future to protect the consumer and protect the climate."
This stands in sharp contrast to attitudes in the US. "When the House Republicans proposed their budget for the year, they zeroed out all the loan guarantee money for solar and wind energy," said Eben Burnham-Snyder, a spokesperson for Democratic Congressman Ed Markey (Massachusetts), the ranking member on the House Natural Resources Committee and co-author of the Waxman-Markey energy bill.
Despite bipartisan efforts in the Senate, Burnham-Snyder contended that "among the House Republican caucus, if they're looking for something to cut, clean energy is the first to go. In that kind of atmosphere, it's nearly impossible to see a pathway where the Republicans will then support something like a clean energy bank -- even if it does have wide bipartisan support in the Senate."
While the American political class continues to debate the science behind global warming, the British government takes very seriously its commitment to reduce carbon emissions. Matthew said that "There is cross-party acceptance of climate change targets," as well as common understanding that they cannot be met "without innovation." He continued, "We needed new ideas about how to leverage in private sector technology. The GIB emerged as one."
Further complicating American embrace of the clean energy agenda, in the wake of the 2009 Recovery Act, government involvement in the private sector now carries considerable stigma.
"We've tried to draw a clear distinction between CEDA and broad-based stimulus," said Michael Carr, senior counsel on the Senate Energy Committee. "Although CEDA is not restrictive, it does have a specific mission to supplement - not supplant - private sector funding."
In this vein, Carr said, the American investment community remains supportive of CEDA. "The deployment cycle takes place in parts," he said. "In essence, the venture capital and private equity markets have sufficient interest and capital up to the pilot stage. But when transitioning to commercial scale, the biggest hurdle is that the customer base is very conservative; they need to plan for 20- to 30-year lifecycles; and financing isn't there without that operating history. CEDA is to help bridge that gap."
Emily Baker, the vice president for federal policy at the National Venture Capital Association, said that "when it comes to the commercial side, VCs can't provide the capital - and it's too risky for commercial and investment banks."
While Baker says that even though there's "no question the issue has gotten even more complicated than it was" now that Republicans took control of the U.S. House of Representatives, her group is "trying to help Congress members connect the dots on how this is an investment that will pay long-term dividends."
Ultimately, leadership may prove to be as critical in America as it was in Britain.
"Everybody had been behind the GIB. There was absolute consensus, strong political commitment - and still the idea almost toppled over," said Matthew. He explained that the resistance from the UK's Treasury "proved extremely difficult" - and was due, in large part, to the fact that the Green Energy Bank would act independent of the Treasury.
Matthew ascribes this "loss of control" as a driving factor in the Treasury's resistance to the establishment of the bank. The "Treasury Trolls" - as he dubbed them - "waged a nine-month campaign to undermine the institution and to get it abolished. They tried everything they could to achieve that."
In fact, the Green Investment Bank stood a strong chance of failing until senior British leadership stepped in: "It required the intervention of Prime Minister [David Cameron] and Deputy Prime Minister [Nick Clegg] to make this happen," said Matthew. "That's the key thing that got it through."
But whether any American politician is willing to take a forward position on an issue that many don't even think exists - never mind the fact that its bipartisan solution is already on the table - remains to be seen. Especially with the 2012 elections around the corner.
In the meantime, the rest of the world is taking note of England's move toward a low carbon economy. "I've gotten calls from Chinese, Indian, Australian, Dutch and Hungarian governments who all want more information about the GIB," said Matthew. "And that's without us actually starting any advocacy efforts - it's really sparked a strong interest."
In the end, perhaps, it maybe the prospect of being left behind by the rest of the world that serves to push the US into clean energy investment. "I have a romantic love for America," said Cameron. "But the political system is broken. It's very sad if the US can't have a reasonable conversation about a problem that is not going away, and is only going to get worse."
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