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BRITAIN VOTES OUT ›

IMPLICATIONS FOR ENVIRONMENTAL POLICY

6TH JULY 2016

Following the outcome of the UK's referendum vote, the Aldersgate Group hosted a debate to explore the environmental implications of the results. Speakers discussed what the UK’s key areas of engagement with the EU in the negotiation process should be as well as its main environmental priorities going forward.

Hosted by CMS Cameron McKenna and chaired by Tom Clarke from Channel 4 News, the debate included senior representatives from the Committee on Climate Change, Kingfisher, Tempus Energy, IEEP and Norton Rose Fulbright.

Opening the event, Dame Fiona Woolf DBE, Partner at CMS Cameron McKenna and Honorary President of the Aldersgate Group, stressed that “Brexit should not prompt the UK into backtracking on its environmental commitments”.

Dame Fiona recalled how the past year has seen “an unprecedented level of commitment to tackling climate change through the Paris Agreement”. The world economy is also seeing rapid increases in low carbon investments from key countries such as China, the United States, South Africa and India. “A country that wants to be a competitive player on the world stage cannot ignore these global trends”.

Chairing the event, Tom Clarke, Science Editor at Channel 4 News, noted “the European project has had the environment at its heart from the very beginning” and the new reality raises major questions.

He described the difficulties in getting coverage of environmental issues during the referendum debate in the media. Whilst many parts of the country are “angry about lots of things, none of those things are about the environment”.

Lord Deben, Chair of the Committee on Climate Change (CCC), asserted that, although Brexit “was the biggest example of self-harm done by a nation for 200 years”, it is time to look forward and say “we are where we are, even if we don’t know where we are”.

Despite the current “meltdown of the British political system”, Lord Deben assured the audience that “climate change is in a better position than it has been for a very long time”. He celebrated the government’s recent acceptance of the fifth carbon budget, noting that the referendum could have given it an excuse not to do so. He also praised the work of DECC Secretary of State Rt Hon Amber Rudd MP, “who has shown us what a politician should look like”.

Lord Deben added that any threat to repeal the Climate Change Act is minimal and “will become less likely as we go on partly because climate change becomes more obvious and partly because when we realise the damage that’s been done by removing the security that we had with EU membership. People will be that much less willing to make other damaging changes”.

He noted that leaving the European Union will make Britain’s contribution to the rest of the world more difficult and we now have one chance “to show that the dirty man of Europe, having become the clean man of Europe through our leadership in the EU, can learn to be the clean man of Europe” without its membership.

Nick Lakin, Group Director of Government Affairs & Communities at Kingfisher, stressed that “it’s vital that existing environmental protections are not diluted or removed”.

For international businesses, Nick noted that global application of laws is key. The EU’s REACH regulation, whilst complex, is something Kingfisher fully supports alongside European timber regulations, which link to the company’s commitment to use 100% sustainably sourced timber. International businesses like Kingfisher will often apply EU environmental standards to business operations globally to ensure that best practice is applied commonly across their business.

He agreed with Lord Deben that the Government’s acceptance of the fifth carbon budget is reassuring but stressed that the devil is in the detail. In the past week, reports suggest for example that business rates for solar panels could see a sixfold to eightfold rise following a proposed revaluation of commercial properties by HM Revenue & Customs’ Valuation Office Agency.

It is in the interest of the audience to “keep reminding businesses that environmental policy matters and government to not let that drop off the table over the course of negotiations”. As a personal commitment, “I will make sure that for Kingfisher, whenever we are discussing Brexit, the environment is part of that discussion”.

Sara Bell, Chief Executive of Tempus Energy, shared how the referendum is already straining innovation companies working to cost-effectively decarbonise the energy system.
 
Sara noted that in the week following the result, every innovation company she had spoken to laid off 20-50% of their staff as a result of the now insecure investment environment. She added that “innovators innovate to a lower cost base…and the UK runs a very cost inefficient system”.
 
Tempus Energy has “legally challenged the state aid approval for the UK capacity market in the European Court”, which in turn prompted the European Commissioner for Competition to “open an investigation into all European capacity markets to determine how they should be designed so that they were genuine transition instruments. With Brexit, it would no longer be possible to enforce a judgement".
 
She added that the UK will require “a reality check in terms of how we’re going to run our energy system outside Europe because Europe has been setting a very clear competitive energy market policy framework that would’ve created a low cost decarbonised energy system”.

David Baldock, Chief Executive of the Institute for European Environmental Policy, urged everyone to continue engaging with their European counterparts, as cutting off those relationships would be “one of the most unconstructive actions”.

David pointed to a range of exit scenarios for the UK. For instance, if the UK were to join the European Economic Area (EEA), it would be “a whale amongst minnows so the EEA would have to change” but would still offer a clear legal structure and process. Some legislation wouldn’t automatically apply, such as the Birds and Habitats Directives.

He noted that whilst the UK has “fundamentally lost influence in Brussels as well as on the global scene”, the next step is to “rebuild our national institutions which have declined” and to ramp up collaboration. Moving forward will require “a lot of people working together inside of and outside of government, partly because there aren’t huge numbers of people inside government anymore” with the capacity to develop environmental legislation. A significant chunk of the civil service will be focused on renegotiations with the EU and devolved authorities.

David stressed the importance of striking “the right balance between communication of persuasion and regulation” in driving forward the environmental agenda. “It isn’t realistic to think this can all be done through engagement with the market”.

Caroline May, Partner and Head of Environment at Norton Rose Fulbright, noted that 100,000 pieces of legislation now need to be reviewed following Brexit and roughly 800 are directly applicable to environmental law.
 
Whilst the UK now has the opportunity to scope a new legislative framework considered to not be “cumbersome and bureaucratic”, the overarching concern is that the UK could decide not to pursue laws that are more difficult to comply with, such as on air quality standards. “It is important that we don’t allow the politicians to dodge difficult areas and issues and that our legislation sets challenges for us in compliance”.
 
Caroline noted that there’s still scope for the UK to play a leading role on the international stage but “we do have to negotiate and work together”. In scoping this new legislative framework, it would be useful to consider “an outcomes based approach to legislation and enforcement which would allow a more holistic approach rather than the current more piecemeal approach to different environmental outcomes”. Regulators need to be “given flexibility within defined parameters” in order to ensure the most sustainable outcomes. 
 
The challenge going forward will be making the environmental agenda “meaningful to everybody in their everyday lives”. Unfortunately voters rarely engage on environmental issues and the politics surrounding them. Environmental regulations can’t be viewed as an imposition but as working “to the benefit of everybody’s way of life, health and wellbeing”.

OUR MEMBERS

Peter Ainsworth

Peter Aldous MP

Wendy Alexander

Anglian Water

Aviva Investors

Bank of America Merrill Lynch

Rt Hon the Lord Barker of Battle

Professor Ian Bateman

BioRegional

BT

Buro Happold

Pamela Castle OBE

John Cox CBE

Cranfield University

Crown Estate, The

Tom Delay

DONG Energy

John Edmonds

eftec

Professor Paul Ekins OBE

Energy Saving Trust

Energy Technologies Institute

Environmental Industries Commission

Forestry Commission

Friends of the Earth

Green Alliance

Sir John Harman

Hogan Lovells

Emma Howard Boyd

IEEP

IEMA - Institute of Environmental Management and Assessment

Ikea

Interface

Interserve

Jaguar Land Rover

Johnson Matthey

Peter Jones OBE

Keep Britain Tidy

Kingfisher

Knowledge Transfer Network

L&Q Group

Professor Paul Leinster CBE

Ian Liddell-Grainger MP

Caroline Lucas MP

Marks & Spencer

Jason McCartney MP

MHI Vestas Offshore Wind

National Grid

National Union of Students

Nestlé

Dinah Nichols CB

Northern Ireland Environment Agency

Norton Rose Fulbright

Lord Oxburgh

Jonathon Porritt CBE

Lord Prescott

RELX Group

Nick Robins

Rolton Group

RSPB

Scottish Environment Protection Agency

Barry Sheerman MP

Siemens

Sky

Graham Stuart MP

Tempus Energy

Kerry ten Kate

Lord Teverson

Thames Water

Roy Tindle

TUC

Tuffin Ferraby Taylor

Chris Tuppen

UK Green Building Council

Peter Unwin

Vattenfall

Viridor

Lord Whitty

Adrian Wilkes

Willmott Dixon Group

Philip Wolfe

Woodland Trust

WSP Environment & Energy

WWF

XL Catlin

Peter Young




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