Nearly a year on from the Paris Agreement, the European Union is developing its own 2030 “climate and energy package” to meet its commitments – notably to reduce greenhouse gas emissions by at least 40% compared to 1990 levels. Climate policy is an area of real “shared competence” for the EU, and the UK has played an active role in shaping it for the last decade. So what are the implications of Brexit for the EU, and for international climate negotiations more broadly?
Britain’s credentials in this area are strong. With the Climate Change Act of 2008, the UK took a pioneering role by adopting the first legally-binding climate change target in the world – with an 80% emissions reduction target by 2050 (again based on 1990 levels). The UK was the catalyst for cooperation between the more progressive EU member states on this issue, building the so-called “green growth coalition”. In 2014, the UK was the only major member state that pushed for a tougher EU climate target for 2030. It’s open to speculation as to whether the “at least 40%” goal could have been agreed without British advocacy.
Brexit is set to weaken the green growth coalition, make climate talks more difficult, and shift the power balance in favour of countries opposing an ambitious climate policy.
So far, it’s unclear how the UK will commit to burden-sharing after Brexit. Sectors included in the Emission Trading System (ETS) are regulated at EU level, but emissions reductions from the sectors are covered by its partner policy, the “Effort Sharing Decision”, which is the responsibility of member states. They define and implement specific national policies to meet the targets set for 2020. The European Commission’s “Effort Sharing Regulation” proposal, published on 20 July, foresees binding emissions reductions for member states from 2021 to 2030 – and the UK’s target in non-ETS sectors is set at a 37% reduction from 2005 levels.
Brexit also raises a question mark over ratification of the Paris Agreement. The timeline for the United Nations’ global stocktaking summit in 2018 will be negatively impacted. The UK was instrumental in gaining the support of the Visegrád countries (Czech Republic, Hungary, Poland and Slovakia) in the vote for emissions reduction commitments. Which country will step up to play that mediator role? Which member state will push for timely implementation? Will climate laggards such as Poland, which is pushing for a change in the burden-sharing arrangements before ratifying the Paris Agreement, gain greater influence?
“Brexit could open a window of opportunity for a transition to renewable energy that favours low-carbon technologies and more ambitious energy-efficiency efforts”
As a result of Brexit, the EU will lose a decisive proponent of European energy market integration – a topic that inspires great scepticism from a significant number of member states. Some national governments still consider security of supply to be better ensured by closed national markets and national energy utilities. It’s undeniable that in eastern Europe there is a strong will to maintain national state control of the energy sector.
But Britain has not been uniformly supportive of progressive green policies. The scrapping of ambitious and nationally-binding targets for renewable energy in the EU’s 2030 Energy and Climate Policy Framework bore the signature of the UK government, as did the rejection of an efficiency target. Brexit could open a window of opportunity for a transition to renewable energy that favours lowcarbon technologies and more ambitious energy-efficiency efforts. Britain has often aligned with the Visegrád countries in calling for non-discriminatory energy and climate targets with regard to the choice of low-carbon technologies.
This quest for “technology neutrality” allowed room for the further exploitation of nuclear power and coal in conjunction with carbon capture and storage (CCS) solutions. Both of these technologies are perceived as risky, even among the general public in the Visegrád countries; opinion polls suggest that renewables and energy efficiency are the preferred options for the future. There are further open questions regarding controversial technologies, including the possibility of fracking in the UK, to ensure security of domestic energy supply.
Britain’s renewables sector is likely to become more vulnerable, as the UK is the largest beneficiary of allocations from the European Investment Bank (EIB). In 2015, the UK received around 35% of the €3.6bn that the EIB granted for renewable-energy and energy efficiency projects worldwide. Overall, the EIB has lent Britain around €7.8bn – and it should be noted that only member states can be EIB shareholders. It’s possible that the UK could, in the future, play a role similar to that of Norway, which is part of the single European electricity market through membership of the European Economic Area. If so, Britain would still have to comply with the EU’s renewable energy quotas and energy efficiency targets, but without the political power to influence those standards.
“The UK was instrumental in gaining the support of the Visegrád countries in the vote for emissions reduction commitments”
There is greater uncertainty over how the UK’s new energy policy will develop if it no is longer required to meet the EU’s targets. Although Britain’s goals have historically been more ambitious than the EU’s joint target, British climate action may drop down the policy agenda, as the targets established through national legislation can simply be overturned in Britain’s parliament.
Britain’s exit could trigger a more ambitious EU transition to renewable energy, but the speculation that Germany will drive this effort forward seems unfounded. It is unlikely that the Energiewende (“energy transition”) policy of the Merkel government will be exported, especially if one considers the new amendments to the German Renewable Energy Sources Act. Energy generation from conventional fossil sources is still high in Germany, and the feed-in tariff system, once the motor of renewables’ rapid growth, is to be replaced by a more market-based auction system. This favours large companies and holds back the further engagement of small-scale actors that are the driving forces of the Energiewende.
For pessimists, the future means a weakened climate policy agenda and implementation in the UK, a struggling ETS, and active policymakers becoming passive “policytakers”. Even optimists see only the Commission and national governments “muddling through”, looking for new windows of opportunity to make progress, especially in the areas of renewable energy policy and energy efficiency.
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