Is Brexit at odds with the UK’s net-zero emissions target?

Backsliding on existing negotiations could see the UK weaken existing environmental policies

Brexit returned to the spotlight this week, with Boris Johnson seemingly ready to reverse key decisions and agreements issued as part of the Withdrawal Agreement with the European Union (EU).

Through documents leaked to the Financial Times it has become apparent that the Government intends to renege on aspects of the Northern Ireland protocol. This has sparked another war of words with the bloc, one that has heightened the concerns that the UK could crash out of the European Single Market in January as part of a No-Deal Brexit.

While the current discrepancies don’t directly focus on environmental legislation that is still expected to be transposed into UK law next year, it has created a new wave of concerns that the UK will backslide on specific standards as part of trade agreements, which could have disastrous impacts on the long-term net-zero emissions goal enshrined for 2050.

Trade law experts at the University of Sussex Dr Emily Lydgate and Chloe Anthony both believe that current negotiation practices from the UK are placing the net-zero target under risk.

Analysis published by the UK Trade Policy Observatory (UKTPO) from the two experts warns that rolling over on existing trade agreements could see the UK miss a crucial opportunity to renegotiate based on the net-zero target – an enshrined ambition created well after the dust had settled on the UK’s decision to leave the EU.

Dr Emily Lydgate, Senior Lecturer in Environmental Law at the University of Sussex and UKTPO member, says: “To meet its net-zero target, the UK needs to encourage trade and investment in low-carbon goods, services and technologies, and discourage trade and investment in high-carbon goods, services and technologies. Current UK green subsidies are likely to be WTO-compliant but fall short of the ambition needed to achieve the net-zero target, while upping ambition increases the risk of WTO non-compliance. There is a very delicate balancing act to be performed here and the UK Government’s lack of clear strategy on subsidies increases the likelihood of disputes.”

Level playing field

The latest revised agreement is available from the European Commissions’ website. It included clauses that enable the UK to come out from all EU laws, including the Common Agricultural and Fisheries Policy – two standards that pro-Brexit supporters claim have stifled productivity and economic growth for workers.

Part of the agreement on the departure from the EU customs union and the laws that it enforces is a new regulatory system that the UK will need to stick to as part of any future trade deals with EU nations. This has been called a “level playing field”. This would require the UK to conform to EU standards on environmental policies and others as part of a trade deal, but the UK has no legal obligation to maintain current standards if no trade deal is agreed.

The document includes details of the EU laws which would be transposed into the UK under this level playing field agreement and the numerous emissions and environmental-related standards that the UK has signed up to throughout its membership of the EU. This includes directives on industrial emissions, transport emissions – including a variety of rules on Euro 5, 6 and 7 vehicles – waste, and biodiversity.

However, amidst the fresh concerns about renegading on green standards post-Brexit, businesses, green groups and the general public are seeking reassurances that environmental legislation won’t be relaxed as part of any rejig to the negotiations.

In particular, the phase-out of diesel and petrol vehicles by 2035, the installation or low-carbon heating and the decarbonisation of industry will all require urgent action if the UK is to meet its net-zero commitment.

Free Trade

However, the law experts warn that measures must be put in place by the Government to ensure progress across theses areas isn’t hindered. In particular, restricting high-emission imports should be enshrined under any Free Trade Agreements (FTAs) with other nations. Additional policy mechanism including imposing energy efficiency requirements on imports into the UK and taxing imported products. However, these could all be subject to WTO notifications and potential legal challenges.

A coalition of business leaders is urging Ministers to ensure that post-Brexit FTAs not only include non-regression clauses on environmental standards, but actively promote stronger requirements on a global scale.

Entitled ‘seize the moment’, the Aldersgate Group’s report calls for all future FTAs to include reciprocal commitments to the Paris Agreement and a binding non-regression clause. The UK is notably negotiating an FTA with the US at present – the only major developed economy not committed to the Paris Agreement, after President Trump’s administration pulled the nation out of the accord.

The Government’s analysis shows a UK-US FTA could increase trade between both countries by £15.3bn in the long run and increase UK workers’ wages by £1.8bn, against a 2018 baseline.

On the latter, criticisms have mounted in recent months after the UK legislated for a net-zero 2050 target and introduced policy packages such as the Environment Bill, Agriculture Bill and Resources and Waste Strategy while the Trump administration has busied itself formally exiting the Paris Agreement. The UK government had notably vowed to only seek FTAs with “like-minded” democracies.

All future FTAs should additionally contain measures to remove barriers to the trade of low-carbon goods and environmental services, such as prohibitively high tariffs, and a legally binding right for either party to increase environmental or climate standards, business groups argue. Such moves could help both parties reap their fair share of the global low-carbon goods market, forecast to surpass £1trn by 2030, while ensuring that they can adequately respond to future climate events and improved scientific research.

But recent policy announcements don’t contain the transparent approach to domestic subsidies required to avoid discrepancies with WTO regulations.

Chloe Anthony, doctoral researcher at the University of Sussex, says: “Our analysis has highlighted a worrying lack of cross-cutting strategy in UK trade and climate governance. At present, current UK climate mitigation lacks ambition and there is a lack of transparency around future measures. As a starting point to leverage trade policy in support of climate policy, the UK Government urgently needs to reform its approach to fossil fuel subsidies and go further in lowering trade barriers for environmental goods.”

On fossil fuel subsidies, the experts concur with the Committee on Climate Change’s recommendation that the UK Government factor in aviation and shipping to its trade-related emissions.

The net-zero emissions target does not account for these emissions. WWF found that emissions from imported products including clothing, processed foods and electronics would account for 46% of the UK’s carbon footprint.

The UK’s response to the coronavirus pandemic has also done little to dispel the notion that the Government isn’t promoting “joined-up thinking” across all of its departments.

Despite issuing a £3bn package to stimulate the UK’s green economy in the wake of the Covid-19 pandemic, the Government has been criticised for its £100m bailout for airline FlyBe at the beginning of this year.

It can be argued that the UK Government is trying to ensure business competitivity in the present, without taking into account the low-carbon trajectory that will change how businesses operate in the future.

Dr Lydgate adds: “The current emphasis by the UK Government in their pursuit of FTAs has been on expediency, to ensure that companies will not face new trade barriers after the transition period, and so they have copied and pasted EU language on trade and environment that is in some cases years out of step.

“This is a missed opportunity to reinforce action towards net-zero targets when FTAs have the potential to remove trade barriers on energy-efficient goods and services, align commitments to green subsidies and reduce fossil fuel subsidies, as well as coordinate carbon pricing mechanisms.”

Matt Mace