So, why has the government made such a paltry offer? There are three reasons, I suggest.
The first is that this idea was first mooted as a spoiler to neuter a Labour proposal, which I think might well have been influenced by the proposals the Green New Deal Group has made. There was never any real government commitment to this idea.
Second, the government does not want this scheme to work. They only believe in private sector solutions, and this scheme could show the public liked state sector ones.
Third, they really do not want to raise too much money. In 2015 George Osborne offered a bond that raised £15 billion and crashed the NS&I web site, so popular was it. If the 1% we recommended had been made available this time I think that would have happened again. But that might than have also shown the public wanted to save for green projects, and that is a message the government does not want relayed. In that case they have priced this to fail.
They’ve all got it in for me!
An alternative explanation is indeed possible. As Spud has been known to point out people actively desire to save green. To know that their savings are going to make the world a better place. Which means they’ll happily buy green bonds at a lower rate of interest then, doesn’t it? And if they won’t buy at a lower interest rate then they don’t preferentially invest green, do they?