As well as incentivising ‘renewable’ enterprise, such a mechanism might spur on the government to meet their emissions targets. As you imply, it would give them an incentive too.

Also, perhaps it could somehow bypass the animosity of fossil-fuel producing factions that Germany has had to contend with since introducing subsidies for renewable energy firms. But it would surely ensure that R & D projects continued to be pursued, another cited failing of the German subsidy scheme. Renewables could mean a lost job to a fossel fuel worker, which is most unfortunate, but doesn’t this need to be tempered with the fact that if we don’t reduce our carbon output, the survival of humanity probably hangs very much in the balance. On the other hand, once more radical policies are put in place, it may clearly signal to fossil fuel industries that the way forward is renewables, and thus young people may stop entering into this job area.

If we cannot rely on the government to push forward renewable energy then we certainly cannot rely on business. Shell exited from the Array project (wind turbines) because it ceased to be commercially viable for them. It looked to pastures new in terms of biofuels instead. However, as has been pointed out, growing these increases the likelihood of the global poor experiencing food deficits. This is how unincentivised capitalism works. Well, there is still Prince Charles.

Actually, i believe, it is Sweden that is at the top of the world green league table, with their pledge to achieve an oil-free economy by 2020 (though have seen other targets reported that are more modest). And, as i understand, this, if not initially government-led, is very much government supported, indeed, it could not have happened without full government backing. i think one of the ways this is being facilitated is by tax on polluting cars and incentives to buy green cars.

The Swedes thought that a Sweden free of fossil fuels would give them enormous advantages, not least by reducing the impact from fluctuations in oil prices. (http://peakoil.blogspot.com/2008/05/sweden-plans-to-be-world-first-oil-free.html)

Incidentally, another incentive for the hypothetical creation of this Yorkshire farm might be that wind power in the UK costs half that of German generated wind power, apparently. So, come any integration of the Euro power grid, to have such energy could be profitable for the UK. It seems that the installation of turbines has to be considered carefully because the hum can upset some. There is also the problem of birds being killed – but couldn’t this tendency be eliminated?

Lastly, and again, perhaps separate to the bond issue, when Shell pulled out of the Array project, Friends of the Earth advised that the government should encourage manufacturing of turbines in the UK. http://news.bbc.co.uk/1/hi/business/7377164.stm

Surely you don’t eliminate the political risk – you actually multiply x2. In the real world, how could you ever index government performance, relative to and defined by what? You also assume that Western governments would have any problem in defaulting on such instruments – quite the reverse, probably a tidy vote winner when the time comes. Stop assuming that political risk (in the dire sense) is only the affliction of emerging markets – putting your money where you mouth is can cut two ways on this one…

One final point – something Whitehall should hopefully understand after the Array project, when Shell left you looking like turnips, to really attract seriosu investment in renewables, you have to really offer the best return on investment. Not just in your own back yard, but globally – that also means sorting out the practicalities of planning, capacity constraints and nimbyism – and it also means benchmarking against investing in the black stuff. Venture capitalists aren’t going to get you much, you need the energy giants properly onboard… as above, assuming the government would be credible to the end on this is horse manure.

As for ‘crappy subsidies’ this is true of the UK. But a not so crappy subsidy (dressed up as the feed in tarrif) in Germany, does actually work.

This would probably be the quickest recipe to never achieving any major renewables in the UK – not the way to go. Simple = good, complex (as the RO is) = costly disaster. This wouldn’t only be expensive, but poliically embarrasing… nice to see your faith in governments remains in fine spirit tho.