Brexit countdown: How the green economy could fare in each possible deal scenario

With Brexit negotiations hurtling towards an uncertain outcome, and many questions still unanswered, edie investigates how the UK's green agenda could be affected in each of the three most likely scenarios.

Last Saturday (29 September) marked exactly six months to go until the Britain leaves the EU. With time running out to reach a deal, Theresa May is faced with finding a solution acceptable both to Brussels and Westminster that will achieve an orderly Brexit and reduce the uncertainty hanging over the economy.

The EU has given Britain until mid-October to strike a trade deal that has so far remained elusive. With opposition for the PM’s so-called Chequers deal surfacing on all sides of the debate, the likelihood of a ‘no deal’ is increasing on a daily basis. Some of the Chequers deal’s biggest critics come from within, in the form of Tory Brexiteers, led by chief rabble-rouser Boris Johnson, who has laid down alternative plans for a deal. 

With all this in mind, edie has looked at the options on the table to explore the environmental implications of each potential Brexit deal. 

What do we know already?

The Government’s Repeal Bill pledges to preserve the whole body of EU environmental law immediately after the UK’s departure, but environmental groups continue to question how the Government will work to strengthen or maintain regulations.

A new Environmental Bill that incorporates measures among a range of issues will aim to exploit green “opportunities” post-Brexit, with Michael Gove yesterday confirming the Bill will have legally binding targets for nature, ramp up action on air pollution, and promote a shift to a more circular economy.

One of the biggest areas of interest for green groups is Theresa May’s pledge to create a “world-leading, independent, statutory body” to ensure ministers stick to their commitments – replacing the power of the European Commission to take governments to the European court of justice (ECJ) for not fulfilling their obligations.

Ministers insist that the watchdog would have the power to initiate legal action against the Government over any legally-binding environmental targets. However, it is understood that the UK watchdog will not have any powers relating to climate change, an issue of heightened public concern.

What are the deals on the table?

1) Chequers

What does it mean?

For months the PM has sought to convince all parties to get behind her so-called Chequers proposals, under which Britain would follow the EU’s rulebook for goods and trade, but go its own way on services and the free movement of people. It proposes that the UK will mirror EU rules on goods and that the country will be treated as a “combined customs territory”.

What are the environmental implications?

The Government’s Brexit White Paper includes a non-regression requirement to ensure environmental standards do not slip lower than existing European Union (EU) regulation. This means there will be “no regression” of existing EU regulations on air quality, water pollution and waste management after the UK’s departure.

The EU (Withdrawal) Act places an obligation on the secretary of state to bring forward legislation to retain the environmental principles that appear in the EU Treaties, such as the precautionary principle and the polluter pays principle, which underpin all environmental law and policy.

The Paper features a reiteration that the UK will be seeking ‘active’ participation in the European Chemicals Agency (ECHA), much uncertainty remains over how achievable this will be. It states that Under the Common Agricultural Policy will be replaced with a new framework.

As for electricity and gas, the White Paper does not confirm how the UK’s energy relationship with the EU will work in the future, speculating that it could either leave or remain in the Internal Energy Market (IEM).  It states that if the UK leaves the IEM, it will explore measures of ensuring trade over interconnectors would continue without automatic capacity allocation.

In terms of climate and energy, the extent to which the UK will continue to participate in the EU’s effort sharing agenda to meet international climate targets remains unclear and so does the UK’s participation in the EU’s emissions trading scheme from 2020.

2) No deal

What does it mean?

Papers released last month outlining the Government’s contingencies for a ‘no deal’ Brexit scenario provided assurances that European Union protections would be fully maintained after Britain leaves the EU.

An amicable no deal would see the UK and EU attempt to ease trade barriers through bilateral agreements. But, as Greener UK puts it, a “chaotic” no deal would require the UK to trade with the EU under World Trade Organisation (WTO) rules with no preferential agreement.

What are the environmental implications?

In this scenario, the UK would sever its ties with the European Court of Justice (ECJ), and as such, end participation in the EU Emissions Trading Scheme (ETS) and the internal energy market (IEM). These developments would likely cause significant disruption to business and undermine climate change action.

Leaving the EU without a deal would also mean leaving REACH (Registration, Evaluation, Authorisation and restriction of Chemicals), exposing the UK to a number of environmental and economic risks. This would mean greater administrative and financial burdens on firms wishing to trade in Europe, who would have to abide by and register with REACH, as well as a separate UK system.  

In addition, the UK would lose access to the European Investment Bank (EI), which has been vital in providing long-term investment for critical infrastructure, while there is a big risk that the UK would import more food from countries with lower production standards.

Relaxations of regulations is broadly viewed as crucial to striking a free-trade deal with the US, whose commerce secretary Wilbur Ross has warned that maintaining EU standards which ban chlorine-washed chicken or GM crops would be a ‘landmine’ to any transatlantic trade agreement.

3) A ‘Canada-plus’ trade dal

What does it mean?

On the eve of the Conservative Party conference last week, former Foreign Secretary Boris Johnson put forward an alternative option to the Chequers deal, arguing that the UK should instead negotiate a “Super Canada” free trade deal.

Canada’s deal with the EU, signed in 2016, removes the vast majority of customs duties on trade between Canada and the EU. Johnson said a Super Canada deal would involve “zero tariffs and zero quotas” on all imports and exports, with mutual recognition agreements covering UK and EU regulations to ensure “conformity of goods with each other’s standards”.

What are the environmental implications?

A “SuperCanada” deal would leave the UK free to strike trade deals with other nations around the world and develop its own system of standards and regulations. Many within the green business community are concerned that the UK could water down its green regulations, particularly in light of Johnson’s recent comments that Chequers would leave the UK in “legal servitude” to the EU’s social and environmental laws after the UK leaves the Bloc.

Writing in a column for The Telegraph last week, Johnson wrote: “It is deeply troubling that we would be signing away forever the right of Parliament to legislate in these areas in any way that the EU – not our own Parliament – deems to be regressive or unsatisfactory.”

The EU Canada trade deal, known as the Comprehensive Economic and Trade Agreement (CETA), has been heavily criticised by environmental groups for giving companies the right to sue Member States for implementing laws that limit their profits. Campaigners say this move could have a massive impact on social and environmental protections as Member States may stop bringing forward new regulations or laws for fear they could be sued.

George Ogleby

Comments (1)

  1. Henry KG Barr says:

    There is a smell of self intrest on every side?

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