Greeniums — higher prices for environmentally friendly investments — are driven by investor demand. That was not the case when the UK government launched its Green Investment Bank in 2012. Five years later the bank’s portfolio, which included stakes in offshore wind projects, was sold for £2.3bn to a consortium led by Australia’s Macquarie. Macquarie has since gone well beyond its promise of investing a further £3bn in UK and European green projects within three years of purchase. The scale of investments suggests it purchased a bargain portfolio.

Yet other than emergency injections of equity to prevent economic catastrophe — think Lloyds Bank — government direct investments, even for the sake of the public good, are often controversial. Temporary government programmes tend towards permanency, noted Milton Friedman. Ideological opponents, who claim taxpayer money is put at unnecessary risk, champion sales. The UK’s recent decision to rescue satellite operator OneWeb from bankruptcy, fearing its communications infrastructure might suffer, drew criticism.

Green projects, however, are loosening public purse strings. Although renewable energy is all the rage in the private sector, US president-elect Joe Biden has proffered a $2tn plan for green energy investment. Not content with its last foray into venture investments, the UK government also has plans to fund Green Investment Bank 2.0 with up to £20bn, says the Aldersgate Group.

Government has a role to play in large capital projects which benefit the public. More complex green projects — read expensive — benefit from a state push. A long-term aim to decarbonise, say, home-heating will require capital to incentivise households. The short-term cost of switching from a natural gas-fired boiler to more climate-friendly option such as heat pumps can be £10,000. Carbon capture and storage, which probably requires an emissions-pricing programme, will also need government backing to be successful.

But intervention is less helpful for those sectors that already have the full attention of capital markets. Already, electric automaker Tesla trades on 15 times next year’s revenues, more than double that of Facebook. Wind farm developer Orsted has a declining cost of capital, as its valuation soars, compared with fossil fuel producers. Raising a spark from the investment community for renewable energy looks increasingly unnecessary.

Green finance need not involve much more than a favourable nudge from the government. Let markets price in a greener future, not taxpayers.