Scotland's financial sector is ideally placed to create the means to develop major green energy projects, First Minister Alex Salmond said last night in a speech entitled Choosing Scotland's Future as part of the Edinburgh Lecture series.
The FM said that the financial industry has the capacity to channel investment from surplus economies, and combat climate change by funding large scale infrastructure projects.
He outlined how financial innovation has a significant role to play in the development of a low carbon economy that encourages innovation, creates business opportunities, meets global climate change goals and provides thousands of green jobs. This would create new assets, not the inflation of existing assets - creating real wealth, not virtual wealth.
During the lecture the FM also talked about the economic prospects for 2010 and beyond, highlight climate change as a key issue for the future and the contribution Scotland can make, and set out the Scottish Government's positive vision for independence and extending the powers of the Scottish Parliament.
Mr Salmond said:
"The economic crisis, from which we are beginning to emerge, had as one of its root causes the misuse by the developed world of the excess liquidity coming from the emerging economies of Asia.
"For the future, we need to get into a virtuous circle where such liquidity is used in order to create infrastructure that will provide a steady income stream for the investors, and make a difference to climate change. New assets, not the inflation of existing ones. Real wealth, not virtual wealth.
"Financial innovation has a significant role to play in the development of a low carbon economy that encourages innovation, creates business opportunities, provides thousands of green jobs, and helps us achieve global climate change goals.
"A 'super-grid' across the North Sea, to allow renewable power from energy-rich Scotland and Scandinavia to be exported to the continent, is exactly the kind of project where the Scottish financial sector can develop innovative instruments to support investment and opportunity - in exactly the same way it helped underpin the development of the offshore oil and gas industry a generation ago.
"The European Commission is taking forward a North Sea Grid Study to develop this potentially £100 billion project. The initial investments are part of Europe's Economic Recovery Plan, including a groundbreaking transmission hub off the north coast of Scotland. But in the longer term the scale of investment needed will require private as well as public resources.
"Only last week, the initiative to build an offshore electricity transmission network linking Scotland, Northern Ireland and Ireland took a significant step forward, with the awarding of a contract to examine the feasibility of an offshore grid in the Irish Sea.
"Scotland's world-leading renewables industry is powering forward. On Friday, The Crown Estate unveiled plans to develop almost 5 GW of offshore wind energy off the country's east coast. And this is on top of the 6.4 GW of capacity we expect to realise from offshore wind projects planned in Scottish territorial waters.
"For the Scottish financial sector, then, I see real opportunities in the development of new financial instruments that can harness resources from emerging economies to promote sustainable economic growth and reliable returns for the investor.
"Our vision for Scotland is as an equal and independent country among the nations of the world. And a key part of choosing Scotland's future will be in how creatively we respond to all of the economic opportunities offered, so that we maximise the benefits.
"Following the events of the past year or so, there is a clear need to rebalance the global financial architecture - and we can do so in a way that adds real strength and depth to our economies, and also ensures our sustainable future."
