Tuesday, May 13, 2014

A good idea

One of New Zealand's big economic problems is a lack of domestic capital. What capital we do have is conservative, preferring to clip tickets and extract rents rather than invest in innovation, so we constantly see kiwi startups with good ideas selling themselves offshore because they just can't get the money to keep growing in New Zealand. And if we want to shift our economy in a greener direction to reduce emissions, that's a problem.

Now the Greens are offering a solution: a "green bank" to drive investment in the clean technology sector:

The Green Party will establish a Green Investment Bank as a first step in accelerating New Zealand’s transition to a smarter greener economy, Green Party Co-leader Dr Russel Norman announced today.

The Green Investment Bank will be an enduring, government-owned, for-profit bank partnering with the private sector to fund new projects ranging from renewable energy and biofuel production to new clean technologies.

“Like Kiwibank before it, the Green Investment Bank will combine the best of the public and private sectors to accelerate New Zealand’s transition to a smarter, greener economy,” said Dr Norman.

Reading the full policy document, it looks pretty good. Its costed, they're clear on how it will be paid for (increased mining royalties on fossil fuels), and it'll work. The worst that can be said for it is that they're possibly a bit loose with the term "bank". But as policy goes, its a good idea, and one I'd like to see adopted.