Article 50: What we know (and don't know) about the environmental impact of Brexit
As the UK's departure process from the European Union (EU) officially commences with the triggering of Article 50, edie takes an in-depth look at how Brexit could affect Britain's green business community.
After months of seemingly endless speculation regarding when, and indeed if, the wheels would be put in motion to begin Brexit discussions, Prime Minister Theresa May has today (29 March) signed the letter which will give official notice of the UK’s intentions to leave the EU. It will be delivered to European Council President Donald Tusk at 12:20pm by the British ambassador to the EU, Sir Tim Barrow.
May's promise to “get the right deal for every single person in this country” will give hope to environmental and sustainability professionals that negotiations will protect their own interests. However, with the prospect of a two-year long intense dispute with Brussels over trade deals and economic arrangements leading up to the UK’s probable exit in 2019, the greatest likelihood is that sustainability issues will be placed on the back-burner.
But, as WWF’s director of advocacy Trevor Hutchings puts it, “now that the starting pistol has been fired, the UK Government must make sure that the environment is not left behind, and make good its promise to leave nature in a better state than it inherited it". Hutchings' views are supported decisively by ClientEarth chief executive James Thornton, who insists the UK “must get the best deal from the EU because a poor Brexit deal would be catastrophic for the environment".
Theoretically, there is no reason why EU environmental legislation should stop being British law, for the simple reason that they were approved with the active participation of the British Government through council negotiations and voting in the European Parliament (EP). But, as with other crucial aspects of the UK’s relationship with its continental neighbours, changes in legislation are inevitable.
We can be sure that one word will be heard time and time again other over the next 24 months: uncertainty. But how much of this uncertainty still applies to the environment and sustainability here in the UK? As the UK embarks on a long and unavoidably arduous process to establish a Great Repeal Bill, edie takes a look at some of the knowns, and the 'known unknowns' of how Brexit will shape the future for the low-carbon economy.
Article 50: What we know so far...
Brexit and the Paris Agreement
The UK officially signed the Paris Agreement last year through successful negotiations with the EU, and the country was expected to reduce emissions as part of a burden-sharing commitment across Member States. With the Agreement ratified during the COP22 negotiations in Marrakesh at the year-end, the UK has taken steps to introduce its own emissions scheme, which all Member States are required to do.
Climate Change Minister Nick Hurd admitted there are “big issues” and decisions on whether the UK bind itself into European negotiations of the Paris Agreement. This includes a big decision on whether the UK participates in the Emissions trading Scheme (ETS) and in a burden-sharing agreement, which sets binding annual emissions targets for EU Member States up to 2020.
Current burden-sharing targets involve a 20% carbon reduction for the wealthiest Member States and ministers have confirmed that the UK’s 2008 Climate Change Act – which sets the legal framework for the UK government to reduce greenhouse gas emissions by 80% by 2050 against a 1990 baseline – was “fully compatible” with the Paris Agreement.
The recent approval of the Fifth Carbon Budget has put the UK on a path to meet the legally-binding carbon reduction targets laid out in the 2008 act, by setting a 57% reduction goal between the period of 2028 and 2032. In fact, research from Transport & Environment (T&E) has found that only three European countries are on course to achieve the Paris Agreement targets, with the UK in fifth position on its progress towards the landmark climate treaty.
Overall, Brexit is unlikely to change the framework of the Paris Agreement, but rather how the UK involves itself with it. A joint agreement on the effort sharing decision is currently being negotiated by EU member states, and is expected to be announced by the end of 2017.
Brexit and the Emissions Trading Scheme (ETS)
Concern is mounting about the future of UK's involvement in the EU ETS. The flagship European initiative often held out as a shining example of effective greenhouse gas (GHG) reduction, is the world's biggest emissions ‘cap and trade’ scheme operating across 30 countries. Unlike our departure from Europe there is an option for the UK to continue to participate in the scheme.
EU ETS has reached the halfway mark of its third phase. With negotiations for the fourth (scheduled for a 2020 launch) already underway, the UK's exit from Europe comes at a challenging time for UK carbon reduction policy.
For those businesses covered by the EU ETS, an overhaul would no doubt bring a heavy burden of red tape and significant costs to ensure compliance to a new system. Such a move would add an unhelpful layer of complexity during times of political and economic instability. While UK businesses are left in limbo waiting for the impact of Brexit to be fully realised, it's clear that the future of emissions trading in the UK will shift in some way.
Although the UK legally has a right to be an active participant in the negotiations of next generation and the reforms of the EU ETS, its divorce from Europe will mean its influence on the next phase and the final carbon allocations will be diminished.
Brexit and the Environment
With around 75% of all UK environment law deriving from EU regulations, Defra Secretary Andrea Leadsom has admitted that a third of green regulations "won't be easy to transpose". Green MP Caroline Lucas has outlined 12 specific threats that Brexit poses to the environment, and has called on the Government to implement a “Green Guarantee” to act as a safeguard.
The Brexit White Paper was published in February and immediately drew praise from green groups for its reiteration of the commitment to ensure the Government becomes the first “to leave the environment in a better state than we found it”, with specific mentions of the future of farming and marine protections.
Within the Paper is a vision Britain to establish a “world-leading” food and farming industry. This could be delivered through a revamped, or all together scrapped, CAP scheme, which accounts for 40% on the EU budget and has been embroiled in significant controversy for discriminating against non-EU imports. Also mooted is a “mutually beneficial” deal that works for the UK and the EU’s fishing communities, and “delivers a cleaner, healthier and more productive marine environment”.
Brexit and Waste
It is anticipated that the measures set out in the recently re-tabled Circular Economy Package will be completed before the UK leaves the EU, so the UK will be obliged to give effect to them for as long as it remains in the EU.
If the UK wishes to continue participation in the single market post-Brexit, it would need to sign up to the European Economic Area (EEA) Agreement (EEAA). A quick look at the current state of legislation confirms that if the UK adopted this route, actually very little would change in relation to environmental controls. Major EU waste laws, such as the Waste Framework Directive or the Industrial Emissions Directive, have gone through Westminster and are fully legitimised to continue to be applicable.
However, the big stumbling block with EEA membership will be the requirement to adhere to the principle of the free movement of people. Many EU leaders have stated publicly that the UK will not be allowed to introduce such controls which would conflict with the free movement principle if it wishes to join the EEA. For that reason, membership of the EEA at the moment seems very unlikely.
As a result, the UK would not be directly bound by many of the EU environmental controls, including those relating to the Circular Economy Package. If concepts in the Package, such as minimum recycled content in certain products, are brought forward, then these obligations would apply indirectly to the UK because they would affect products being supplied into the EU. However, other elements of the Package, such as recycling targets, would not directly apply to the UK and the level of ambition in this area would be left in the Government’s hands.
Given that the UK is currently struggling with some of the existing recycling targets, it remains to be seen whether the UK Government would benefit from the implementation of these new measures in the run up to, and after, leaving the EU. The likelihood is that, even without a direct or indirect obligation from the EU to adopt the Circular Economy Package, the UK will need to take its own steps to incorporate the circular economy concept into its own policies and from there to introduce its own legal controls.
Brexit and Air Quality
The UK recently agreed to adopt new EU legislation on air quality, which sets stricter national limits for the emission of some of the most dangerous air pollutants. This has, however, been met with scepticism among green campaigners concerned about how the UK Government will enforce the legislation post-Brexit.
The UK’s continuous struggle to comply with the EU’s Ambient Air Quality Directive has already led to numerous court battles, with the Government last year defeated by ClientEarth in a High Court case over the failure of ministers to tackle illegal air quality levels across the country.
Annually, an estimated 40,000 early deaths across the UK are caused by rising air pollution levels, which breached annual limits in London just five days into 2017. In light of this, environmental experts will provide great scrutiny over Government to ensure Ministers commit to transposing the Air Quality Directive into UK legislation before the UK’s official departure.
Brexit and Environmental Product Laws
Legislation designed to reduce the environmental impacts of products including REACH, RoHS, WEEE, Batteries, Packaging, End of Life Vehicles and Ecodesign requirements for energy-related products were all negotiated and agreed at EU level. Consequently, UK and EU environmental product legislation is highly integrated and requirements will continue to apply unless repealed or amended by the Government.
There is, however, a single market requirement for adhering to EU standards, as requirements for producer responsibility for waste, restriction of chemicals and energy efficiency, apply equally to domestic and imported products. As a member of the EEA, UK exports would need to meet EU product standards to gain access to the EU market.
An alternative would be for the UK to agree an alternative trade agreement with the EU, as is currently the case for Switzerland. Although it is difficult to forecast the terms of this agreement, it seems unlikely in the short-term that the EU would agree to exclude any environmental product requirements applying to the EEA
There is an increased risk that the UK may reduce standards to facilitate trade with non-EU countries. However, in the short-term, it is unlikely that there will be any significant legislative changes due to EU market access requirements, the maturity and effectiveness of the legislation in improving the environment and generating business opportunities and the resource requirements of rewriting decades of environmental laws.
Brexit and Human Rights
There is a danger that the UK might lose its influence on EU-wide law and policy on slavery. However, it is crucial not to lose sight of the fact that the Sustainable Development Goals (SDGs) have been adopted at international level and alongside focus areas such as poverty, hunger and health, world leaders (including the UK) have committed to Goal 8.7 - to take immediate and effective measures to eradicate some of the most indecent forms of labour on our planet and forced labour, modern slavery and human trafficking. This commitment remains unchanged.
The Human Rights Act (HRA) and the European Court of Human Rights have had a wide-reaching affect on human rights in the UK. On leaving the EU, it is likely that the HRA will become untenable as it is intertwined into the European legislative framework. Brexit will not immediately predicate the UK leaving the European Convention on Human Rights (ECHR), but the exit does make this a possibility. The ECHR plays a supervisory role in the UK human rights landscape and this could raise important human rights accountability issues in the future. If the HRA is repealed there is a danger that companies that have poor human rights practices and that have ‘public authority’ status under the HRA will not be able to be held accountable.
Brexit and Water
The result of the EU referendum has triggered a degree of uncertainty unknown in the UK water sector since the privatisation of utilities in England and Wales over 25 years ago. The biggest threat to the UK water market from Brexit is dilution of European legislation like the Water Framework Directive (WFD) and Urban Waste Water Directive (UWWD).
European environmental policy has been a huge legislative driver for UK utilities, and the sector will seek assurances from the UK Government that water resources will remain protected, especially in eastern and south-east England, where population growth and climate change pose the greatest challenge.
Most water companies in the UK are run as commercial companies and may push for a relaxing of standards in the longer-term to drive down costs, which in turn may lead to projects being postponed.
Brexit and Green Jobs/Skills
Like many professions, the CRS sector benefits from the free movement of employees in the EU, enabling the UK to recruit efficiently from a larger talent pool. We wait to see whether leaving the EU will mean less access to people from the EU or encourage employers to cast their net more widely beyond the confines of Europe.
On a positive note, Chancellor Philip Hammond has confirmed there is “no likelihood” that post-Brexit immigration controls would apply to EU workers who were highly skilled and highly paid. This will provide great relief to European employees in the environmental and sustainability sectors; reinforced by Business Secretary Greg Clark’s claim that a “big upgrade on education and skills” is essential to tackle the UK’s productivity deficit with other European countries.
George Ogleby & Matt Mace