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Comment: Winning the climate war by digging into one's pocket for victory

James Cameron, vice-chairman of Climate Change Capital, says that since going green will costs billions, the best way to raise the money is to issue modern war bonds and raise an army of investors.

Some of the most effective - and beautifully executed - British propaganda of World War II concerned the selling of war bonds. A little boy and his toy crane were pictured above a caption that read: 'Lend to defend his right to be free.' Another had a mother and daughter staring into a rising sun above a line that read: 'The Dawn of Victory, worth fighting for - worth saving for.'

Collection points were everywhere and the country was urged to do its patriotic duty and dip into its own savings, however meagre, and lend to the government. The money was specifically used for the war effort. By 1945 the total amount invested in UK war bonds stood at GBP1,754m.

I hesitate to link the war against Nazism with the war against climate change, but I believe that now is the time for the government to consider, with urgency, the issue of bonds for another cause - reducing greenhouse gases in our atmosphere - while at the same time kick-starting the faltering economy.

The two are linked. We can fix the economy and build a low-carbon world. Take for instance the research and development carried out in the UK on carbon capture and storage - the means by which power stations using fossil fuels and ones yet to be built can continue to operate without throwing millions of tonnes of carbon into the atmosphere.

There are various technologies in play, and the UK is a leader in their development. At Imperial College in London, Heriot-Watt University in Edinburgh and the universities in Newcastle and Nottingham, an extraordinary expertise has been built up. However Britain is in danger of losing this lead because of the lack of investment to turn this work into reality. We are good in the lab, but not so good at getting that idea from the lab to market.

Take another example, the financing of new heat networks. This is where hot water, produced from an existing power station for instance, is distributed via pipes to heat homes, factories or offices. Witness the steam outlets in Manhattan's streets to get the idea.

However, a new system of heat networks will not be built in the UK because the upfront costs of laying the pipes make it uneconomic compared with gas, where the delivery system, the gas pipe, is long built. In the long term heat networks are proven to drastically reduce carbon output and cost less to run.

One more example: smart grids use mobile phone and broadband technology so that the amount of energy produced can be matched more precisely to the demands of the consumer, thus cutting the amount of energy that is just thrown away, and improving the amount of renewable power put into the grid. The development is being done, but the execution will require billions in investment.

All these schemes, together with more mundane but equally necessary ones such as retrofitting existing homes and offices to make them energy-efficient, are part of the simple but large answer to climate change, and they also can create jobs and stimulate local economies.

Huge sums of money would be needed for a complete overhaul of how we produce, deliver and consume energy. The building of a single carbon capture and storage power station will cost around GBP1bn. But investment in large-scale low-carbon projects has been limited. Changing government policies, uncertainty about a price put on carbon, inertia and short- termism all stop investors coming forward.

So how do we pay for it, how do we find green investors? The answer we've come up with working alongside the top environmental advisor Tom Burke is modelled on the war bond philosophy. We believe that a series of targeted bonds, with their proceeds ring-fenced for investment in tangible green infrastructure, could capture investors' attention whether they be individuals or institutions, such as pension funds looking, as they must, for financial return over many years.

The bonds could be fixed or index-linked, offering low but stable rates of return over a long period of time, matching that of the assets into which the funds would be flowing. That is to say we would build things to last. They would have the backing of government and the expected cash flows from the projects themselves. These climate bonds would be a sensible way to finance the needed long-term investment in tangible assets that society should have to improve the quality of our lives.

I sense that there is now a will for people to put their money to productive use and not just hope that their bank will avoid buying housing estates in Florida or parcels of debt. There is something powerful in the idea that 'My money built that, and it works, and I use it.' Meaningful work matters too: building things financed by people for a purpose that binds investor and worker and user. In the end people's savings can produce jobs, galvanise effort in a common cause and leave a legacy of lasting value.

The government can help to make this happen. The Treasury can lend a hand. That is what happened in the 1940s. To paraphrase a line from another old poster: 'Climate Bonds - the present for the future.' We and our political servants should seize the day - we have no time to lose.

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