What will Brexit mean for UK energy, resources and natural environment policy?
Now that the dust has settled after the referendum and the new government is in place, it’s a good point to take stock and consider what Brexit will mean for UK national environment policy.
Here, our policy experts give their insights on the likely impact and challenges of different scenarios in the three areas of our work: climate and energy, natural environment and resources.
What will Brexit mean for climate and energy?
Amy Mount, senior policy adviser
DECC is dead, long live BEIS. The two outgoing energy and climate ministers, Amber Rudd and Andrea Leadsom, were on opposite sides of the referendum debate but swiftly presented a firm, united front, emphasising continuity in energy policy after the referendum. Both remain in cabinet positions. The appointment of Greg Clark and Nick Hurd to DECC’s successor has been greeted with warmth: both have long championed the UK’s commitment to climate. These are good signs, but it’s undeniable that the context of Brexit makes decarbonisation, at least in the short run, harder.
We’ll benefit from the Climate Change Act
The UK’s own lodestar, the Climate Change Act, enshrining legally binding emissions reductions, is a major benefit. As Leadsom has reminded everyone, it was passed by an overwhelming cross-party majority. The act is technically unaffected by Brexit, and the government’s decision to approve the fifth carbon budget was an explicit confirmation of this (final legislative approval is expected today).
The policy implications depend on which version of Brexit the next prime minister negotiates. If we leave the EU but remain in the single market, most energy policy would be unaffected: state aid rules will still apply, as would product standards such as ecodesign, as well as most directives such as the Industrial Emissions Directive, but, crucially, we would no longer have a say in making the rules. If we leave the single market, we will no longer be obliged to comply with EU policy, and a lengthy legal process will ensue to disentangle the large body of EU-related UK laws and regulations.
Investor confidence is key
As far as the energy market is concerned, it had already been struggling with low investor confidence, and this has been further dented by the economic and political uncertainty surrounding Brexit. This is a serious problem for a power system in dire need of new, low carbon generation. The prospect of new interconnection to the continent (a surefire way of reducing energy costs and improving security) is also unclear, as our European neighbours might feel less disposed to agree favourable terms. Analysis before the referendum found that leaving the internal energy market would cause our energy bills to rise, costing up to £500 million per year and, indeed, energy bills have already grown in the vote’s immediate aftermath. Uncosted risks include the restriction of migration on skilled workers who are building the UK’s low carbon economy, and the effect of a weaker pound on imported components. These are likely to be much larger than the £500 million estimated.
Worry is we’ll lose our voice on the world stage
Finally, the UK’s influence on EU climate and energy policies, generally a force for good when it comes to raising ambition on emissions reductions, will be greatly reduced. British diplomats have amplified the UK’s voice on the world stage via the EU, and perhaps one of the most worrying Brexit effects will be that our voice dwindles into insignificance.
What will Brexit mean for the natural environment?
Sue Armstrong Brown, policy director
Brexit is likely to prove more disruptive for the natural environment than for other areas of environmental policy. Three major tranches of EU legislation: the Birds Directive, the Habitats Directive and the Bathing Water Directive, will not apply under any of the exit scenarios likely to be considered.
Weakened protections for nature
Under the nature directives, the UK benefits from a comprehensive set of environmental protections and a suite of protected areas. Unless and until new measures are put in place, the UK’s natural environment commitment will be limited to what already exists in domestic legislation, as well as international commitments ratified by the UK, such as the Bern and Ramsar Conventions. While these are positive, high level commitments, they are applied through a mixture of legislation, with some being fully transposed into domestic law and others reliant on EU regulations, which will cease to apply on Brexit.
Overall, protections will weaken. As an example, EU designated Special Areas of Conservation and Special Protected Areas cannot be damaged without proof that the damaging activity is in the overriding public interest, and providing compensation. The same sites are often also Sites of Special Scientific Interest, designated under the UK’s domestic Wildlife and Countryside Act, but this only requires planning decisions to “have regard” to their status.
Loss of agri-environment schemes and more intense farming
A significant change is that the Common Agriculture Policy (CAP) will no longer apply. This affects the natural environment in two significant ways. First, the loss of subsidies for UK agriculture will take with it the rural development budget, which contains the largest conservation payment fund in Europe in the form of the agri-environment schemes. The UK has deployed these schemes with a high level of sophistication, and they are responsible for most of the major environmental gains in the wider countryside. Second, less favourable market conditions outside the EU will increase pressures for farmers to intensify production and consolidate land holdings, putting further pressure on natural systems.
Opportunity in an alternative to CAP
However, the CAP has been one of the most criticised elements of our relationship with the EU, and Brexit provides an opportunity to replace it with simpler, more cost effective policies. With last week’s deferral of the planned framework 25 year plan for the environment, a Conservative manifesto commitment, the government has signalled it is reconsidering how to deliver its environmental ambition in the face of policy uncertainty. In doing so, it will need to manage tensions between exploiting natural resources and effective environmental protection. Similarly, successive CAP reforms have established a principle that public money for agriculture should be attached to the delivery of public goods, although this has never been fully applied.
What will Brexit mean for resources policy?
Jonny Hazell, senior policy adviser
If we remain members of the single market on terms similar to Norway’s, not much will change in relation to resource policy. All the directives that provide the framework for most of England’s waste and resources policies, such as the waste framework, ecodesign and End of Life Vehicles directives, will still apply. We will also continue to enjoy access to a market that has underpinned the government’s relaxed approach to resource security, which is clearly in the interest of British manufacturers.
Lower product standards could lead to shoddy goods
But, if it’s a hard Brexit, the future is much less certain. In the short term some EU policy frameworks will continue to apply, as they have been transposed into UK law. But this might not be the case for long, eg current recycling targets in England end in 2020. Other rules implemented through EU regulations would be scrapped, the most significant of which are the standards that make products longer lasting, easier to repair and recycle. Although manufacturers exporting to Europe will still have to comply. But, unless Britain decides to mirror the EU’s framework, manufacturers of products that don’t comply could sell them in the UK, hindering efforts to move towards a circular economy and saddling British consumers with shoddy goods.
Recycling still likely to dominate
Once momentum from the current EU framework runs out, we’re in rune-reading territory. However, recycling is popular amongst businesses and the public and the infrastructure required to deliver it is less contentious than landfill and incineration, so it is likely to continue to dominate waste management strategy. This is even more likely in Wales and Scotland as they have already legislated for recycling targets that go beyond current EU ones.
The key question will be whether targets set will be enforced. There is already concern that various aspects of waste policy go unenforced, particularly around illegal exports, and these are only likely to be exacerbated once the threat of EU fines removed.
Brexit could lead to more effective resource policy
Without the safety net of European policy on resource security and a devalued currency raising import costs, Brexit could be the shock the UK needs to take resource policy more seriously. We could match or exceed EU policy to maximise the resource efficiency, resilience and competitiveness of UK industries, fulfilling the Brexiteers’ hopes of a succeeding as an independent trading nation.