A soft Brexit could offer opportunities, particularly for home-grown energy
So here we are then, six months on from the Brexit vote, six months on from Ethical Corporation’s initial take on it, and we are only a little wiser as to what it might all mean. Brexit, we are told repeatedly, means Brexit.
When it comes to policy guidance, that is about as useful as a Buddhist mantra. In fact, it would work quite well as such - a trick to still the turbulent mind by sending it into an endless loop … Brexit means Brexit? Yes, but what does Brexit mean? It means Brexit! Yes, but what does Brexit … Ommmm …
The UK may act as a bridge between Europe and a climate-sceptic US (credit: Pichetw)
We’re currently in a state of limbo. Or, as some have described it less peacefully, a phoney war, with everyone waiting to see if and when the infamous Article 50, giving formal notice of withdrawal, is triggered. Some consequences are already apparent. The falling pound has driven import costs up, which has hit businesses relying on goods and materials sourced overseas, such as PV panels. But some argue that the pound was over-valued, and so a correction was overdue. More generally, the sheer uncertainty as to just what eventual deal may emerge makes it hard for companies to plan – and borrow or invest – with confidence. Business never enjoys trying to peer through the mist, and in the case of Brexit, it’s been a veritable fog.
That said, some of the scariest predictions have not (yet) come to pass. Economic confidence hasn’t collapsed, and the government hasn’t declared its intention to put a match to all EU-derived green regulations. These rules, which cover everything from clean air and water, to habitats, wildlife, recycling and chemical safety, underpin much of the UK’s environmental progress over the last few decades. The government has declared that, along with all EU regulations, they are to be incorporated into UK law post-Brexit – after which, of course, they can be repealed or amended at leisure.
The National Trust is calling for sweeping changes to the common agricultual policy (credit: Andrew Roland)
Brexit: Hard or soft
Some still fear a bonfire, especially if an embattled Tory party feels the need to assuage the populist right with some symbolic slashes at liberal greenery. But initial signs suggest a more moderate approach, at least on climate, as we reported in August. Within days of the leave vote, the government signed off on the Fifth Carbon Budget – reaffirming its commitment to relatively ambitious emissions cuts – and soon afterwards, it ratified the Paris climate agreement. As to the future of climate diplomacy, an independent UK may well try to act as a bridge between Europe and a climate-sceptical US, but it would be unlikely to strike out with a wildly different negotiating position.
When it comes to teasing out the longer term implications, we’re pretty much reading tea leaves. But here’s what we know so far. As with the whole debate, a huge amount depends on whether Brexit is hard or soft. If the former, then the UK is free from all EU rules and restrictions, and could, in theory, ditch the green tape overnight. That’s the nightmare scenario of the sustainability sector. But even if that happens, companies exporting to Europe would have to follow EU regulations applying to their products, so the ghost of Brussels would still be present.
But if, as seems increasingly likely, the UK goes for a softer option, allowing it significant access to the single market, then things get more nuanced. At present, the price of entry to the single market for non-EU states such as Norway or Switzerland includes signing up to a whole range of regulations, including many environmental ones.
The reason is simple: it’s hard to make such a market work unless everyone involved is playing by the same rules. Of course, the UK deal is unlikely to be as straightforward as that. Unfettered free movement, for example, is a red line that no British politician would dare cross, such is the level of anti-immigration sentiment. So it may be that access is negotiated sector-by-sector – a messy but pragmatic outcome, and one that would militate in favour of keeping significant swathes of EU rules on the statute book.
None of this should be grounds for complacency, however. Even with the softest conceivable divorce, there will still be opportunities for future UK governments to water down or repeal legislation that has helped provide the foundation for the growth of much of Britain’s sustainability sector. Making the business case for regulation will therefore become of increasing importance as Brexit looms.
Wind turbines are an excellent resource, but have long been a symbol of loathing (credit: Andy Dingley)
Chance for restructure
But could there actually be opportunities arising from Brexit? That’s a question notable by its absence from the debate, though the Aldersgate Group’s Nick Molho looked at the up side, particularly for boosting low carbon investment in the north of England, in a column for Ethical Corporation in August.
The vast majority of sustainability advocates, in and out of business, voted to remain. Some did so mainly out of concern over the negative economic impacts of leaving; some because they saw the EU as a vital guardian of environmental and human rights; some because their instinctive liberal, internationalist sympathies made them pan-Europeans.
There were exceptions. As we reported in May, some deep greens, affronted by what they saw as the EU’s democratic deficit and its closeness to corporate lobby groups, threw in their lot with leave. Very few in the more mainstream sustainability world did too, notably Michael Liebreich of Bloomberg New Energy, who argued that EU bureaucracy could stymie innovation, and pointed to some directives – such as those favouring diesel over petrol vehicles – as being badly conceived and counter-productive.
He also drew attention to the failings of the common agricultural policy (CAP – which, along with the common fisheries policy, only applies to EU member states, and hence won’t be part of the framework of any soft Brexit deal). The CAP’s focus on area-based payments for productive land has drawn flak for doling out huge sums to large, wealthy landowners while neglecting biodiversity. For now, the government has indicated that it will maintain existing payments until at least 2020. But some environmentalists see Brexit as an opportunity to restructure farm support from scratch. Among them is the National Trust, the UK’s largest conservation group, which itself owns 250,000 hectares of land. It has called for sweeping changes, ending area-based payments and shifting support to habitat and soil protection and the provision of public goods such as flood management.
3D printing could free the UK from import dependency (credit: Belekekin)
Control of alternative power
Meanwhile, there’s one key link to the continent that will be hard to sever post-Brexit: energy. The UK already imports around half of its energy needs, and planned new interconnectors will tie it more closely to its European neighbours. This could, ironically, boost the case for home-grown renewable energy – particularly wind power, and in the longer term, tidal as well.
Wind turbines have long been a symbol of loathing for many older, more conservative Britons, who see them as ugly impositions foisted on their beloved countryside thanks to the green obsessions of a metropolitan elite. Such views were common among many who voted leave. But of course Britain has excellent wind resources, and unlike foreign gas, or French nuclear, they’re firmly under British ownership, as are the waves that lap its shores. Post-Brexit, canny environmentalists would do well to play the patriotic card: “Let’s take back control of our power; British energy from British wind, none of your Euro-gas here.” It might just win hearts and minds among some of sustainability’s least likely constituency.
Similarly, Brexit could help boost the case for investment in other sunrise technologies that help free the UK from import dependency. The rise of 3D printing is one obvious example. It has huge advantages in terms of resource efficiency, and while still in its infancy, some of the most intriguing breakthroughs are being made by British companies.
None of this, of course, is grounds for complacency. Brexit remains a real and present danger to the prospects for a prosperous and sustainable UK. But when peering through the fog to try to work out just how those dangers might play out, it’s as well to keep an eye on possible points of light, too.
This is issue 2 in our top 10 issues that shaped sustainability in 2016. For the full list see here.Brexit Article 50 CAP energy renewables