Breaking up is hard to do

23rd June 2016


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Catherine Early finds out how a vote to leave the EU might affect the environment profession

The environment has largely taken a back seat in the referendum campaign, with the opposing forces arguing mostly over immigration and the economy. But with an estimated 80%–90% of environmental regulations originating in the EU, the sector and the people working in it stand to be among the most directly affected by a Brexit.

The precise ramifications of leaving are impossible to predict until the UK negotiates an alternative. The country could remain in the European Economic Area (EEA), along with Iceland, Norway and Liechtenstein, where most EU legislation continues to apply. The exceptions are the directives on birds, habitats and bathing water, and the common policies on agriculture and fisheries. Or it could leave completely, and not have to meet EU laws other than for products entering the bloc’s single market or their supply chains. Each option results in different levels of say for the UK in future regulations and trade arrangements (see panel, below).

At risk?

Organisations have been busy assessing what a UK vote to leave would mean for their sector. Environmental lawyers are anticipating a bigger workload. EU environmental law is implemented by an array of legislation and measures, including management agreements, notices, consents and plans. Rose Oliver, working party adviser for the UK Environmental Law Association, pointed out in a recent edition of the organisation’s newsletter that each of these would need to be reviewed and decisions taken about whether and how to preserve or unpick them if the UK decides on a complete withdrawal.

‘Some knotty legal issues would arise, such as how to interpret and deal with legislation like the environmental permitting regulations, which adopts a referential drafting style, placing requirements on regulators and others to act “in accordance with Article X of Directive Y”,’ she wrote.

The UK Green Building Council (UKGBC) has outlined policies and regulations it believes are under threat from Brexit and those with a more complementary relationship. Indeed, some of the most ambitious EU policies actually follow the lead of initiatives introduced in the UK. The Climate Change Act 2008 should be safe, for example, since it is not dependent on EU membership, the UKGBC believes. The trade body points to the pledge by ministers that the government will legislate for net zero emissions in order to achieve the Paris climate agreement. This would be going further than any current commitments from the EU, the UKGBC says.

However, it warns that the UK’s 2020 and 2030 interim targets for renewable energy, energy efficiency and emissions reductions could be discarded because they originate in the EU. Focus would shift solely to overall emissions rather than specifying for energy savings and renewables, but it would still lead towards the same levels of ambition for 2050, the UKGBC notes.

The organisation says the requirement for display energy certificates in public buildings, which stems from the Energy Performance of Buildings Directive (EPBD), could be removed given that the coalition government consulted on proposals to significantly dilute or scrap them. Another provision under the EPBD the UKGBC believes would be at risk is the Nearly Zero Energy Buildings (NZEBs) standard. When the directive was introduced, the UK had policies for all homes to be zero carbon by 2016, and for new non-domestic buildings to follow by 2019. These were thought enough to meet the NZEB requirements.

The zero carbon policy was cancelled in July 2015, however, and the NZEB 2020 target is likely to provide the next uplift in building regulations for energy-efficiency standards. The UK government must undertake cost-optimality analysis of current building regulations to establish whether changes will be needed to meet the standards. In light of the government’s decision last year to scrap zero carbon, it is possible that it would not proceed with any increases in building standards for NZEBs if the UK withdrew from the EU, the UKGBC says.

Going further?

Another key policy for businesses that is derived from the European Union is the energy efficiency opportunity scheme (ESOS). It transposes Art 8 of the Energy Efficiency Directive (EED). ESOS is currently under the policy microscope as part of the business energy tax review, although it is likely to continue as one of the primary reporting requirements for large UK businesses. If the UK was no longer covered by the EED, the UKGBC believes ESOS would be retained only if analysis of the scheme demonstrated that it had driven significant carbon reductions in the commercial sector, which would be crucial in achieving the UK carbon budgets.

Some UK measures exceed the requirements of the EED, the council points out. Combined energy reductions from government buildings in 2013 were already almost three times higher than those required by the directive, for example. ‘As such it is unlikely that emissions targets for public authorities would be watered down as a result of the EED no longer applying to the UK,’ the UKGBC said in a briefing.

UKELA’s working group on energy and climate change has assessed the impact of Brexit on policy in this area. The UK’s ability to meet its targets under the Climate Change Act depends heavily on reductions through the EU emissions trading system (ETS). The UK could opt in to the ETS without being a member of the EU, as Iceland, Norway and Liechtenstein have done. But Stephen Hockman QC points out that the UK would lose its influence in formulating policy for the system if it were no longer a member of the EU. Also, without encouragement from the UK, the bloc may be more inclined to adopt weaker climate policy, he warns.

No speedy resolution

Whatever Brexit path the UK takes, there will be a lengthy period of uncertainty during negotiations. If the UK chooses to leave the EU altogether, many environmental regulations would need to be rewritten. Theoretically, they could be made tougher than existing EU laws, but the current government’s eagerness for deregulation, dilution or removal of environmental legislation will give many professionals cause for concern.

Key figures in the environment movement are hoping for a vote to stay in the EU:

‘Big companies I’ve with are driving innovation and investment, which we are told endlessly by our chancellor is needed for economic growth. The thing that has driven those two things more than anything else is European rules on the environment.’Tony Juniper adviser to the Prince of Wales’s International Sustainability Unit
‘UK manufacturers need to invest in the latest technological advances, they need to stay at the forefront of innovation and they need to collaborate closely with highly integrated supply chains. EU membership supports these goals.’ Terry Scuoler executive, EEF
‘We anticipate that a Brexit trigger a re-evaluation of major infrastructure investments across the industry, from waste and recycling to resource management and energy recovery projects.’ David Palmer-Jonesexecutive, SITA UK
‘One of the reasons we would reach a Brexit situation is that the people who are against regulation have had quite an impact on the vote. It would be unlikely that the government would strengthen national legislation.’ Stanley Johnson, former vice-chair of the European parliament’s environment committee
‘Our businesses would be more hard put to achieve favourable trading arrangements and, therefore, would be much less willing to accept environmental restrictions.’ Lord Deben, chair of the Committee on Climate Change
‘If there is a vote to leave, the government will be like a rabbit in the headlights. The environment is not going to be top of its agenda.’ Laura Sandys, chair of European Movement UK

Implications of the EU referendum

EU membership

Inside the EEA

Entirely outside the EU

Do EU environmental laws continue to apply to the UK?

Yes

Most of them will, with some exceptions, such as the nature directives and Bathing Water Directive

No, but UK exporters will need to comply to export into the EU

Does the UK have a say in the formulation and amendment of EU policy on the environment?

Yes

EEA countries are consulted only during the preparation process for legislation. They do not take part in the formal negotiations, and cannot vote. They have no MEPs to influence legislative outcomes through the European Parliament

No

Would the UK continue to be subject to mechanisms to ensure compliance and penalties for non-compliance?

Yes

Yes, the European Commission retains enforcement powers and fines can be imposed for non-compliance

No

Would it be necessary to negotiate new trade arrangements that could have impacts on environmental standards?

No

In some areas, yes, including in relation to agriculture and fisheries

Yes, across a wide front

Could a future UK government lower current environmental standards in the UK?

Only by means of an agreement at EU level

Not in the majority of cases that are covered by EU obligations

Yes, although UK exporters would need to abide by EU product standards, as well as face tariffs in many sectors

Source: Institute of European Environmental Policy

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