£180bn of investment in new infrastructure such as offshore wind farms is being put at risk by uncertainty over the Government's green commitments, Green Alliance said today.
The think-tank backed by Greenpeace, WWF-UK and the Christian Aid believes government’s support of high carbon schemes such as the shale gas exploration is sending mixed signals to investors about UK’s commitment to the low carbon technology.
More than 70 per cent of the planned spending on projects in the Treasury's "infrastructure pipeline" is on schemes that will help move the economy away from fossil fuels, including railways and wind power, analysis from think tank Green Alliance said.
Taking into account the announcements in the latest spending review, some £180bn is scheduled to be poured into low carbon infrastructure between now and 2020.
If all of the £60 billion in low-carbon projects planned for the next two years goes ahead, it could increase Britain's economic output by 0.7 per cent by 2015, but if the investment programme was halted, gross domestic product could drop by 2.2 per cent, Green Alliance said.
According to the think-tank, a clearer commitment to low carbon development from the Government could unlock the huge potential of private sector investment, making the economy cleaner and more prosperous, the think tank urged.
Matthew Spencer, director of Green Alliance, said: "This research shows that the UK's biggest infrastructure investment over the next few years should come from the low carbon makeover of our energy and transport systems.
"Unfortunately the big beasts of British politics have been largely silent about this opportunity, and investor confidence has dropped as the perception has grown that the UK is not fully committed to its current low carbon direction. This is perverse."
He said economists of all hues should back the projects because of their impact on growth and their low requirement for government funding.The analysis was published ahead of a debate on the future of infrastructure between shadow chancellor Ed Balls and Financial Times chief economics commentator Martin Wolf, hosted by Green Alliance.