By Ben Fernandes, EU Policy Officer
Despite the UK’s withdrawal from the EU, it is most definitely in the interest of both sides to cooperate when addressing climate change. Political leaders on both sides of the Channel have been keen to advocate a green recovery from the Covid-19 pandemic, and it would seem to be an area where the two sides would naturally work together to set the global agenda. However, in the context of Brexit, and increasing UK-EU divergence, it remains to be seen whether the two sides will collaborate effectively.
The EU can provide good stability for policymakers when making long term decisions, because it is more separated from constant political pressures than national governments. Furthermore, as a multi-national organisation it can address climate change on a cross-border level and to great effect. The current Von der Leyen Commission has placed the European Green Deal at the top of its agenda, with the commitment to make Europe the first climate neutral continent by 2050.
Prior to Britain’s accession into the European Economic Community (EEC) in 1973, the UK was sometimes colloquially labelled as the ‘Dirty Man of Europe’. The current Conservative Government led by Boris Johnson are keen to avoid a return to this now that the UK is back out of the EU and are adamant that they will execute a clean and green Brexit. In 2019, the same year that the EU announced the European Green Deal, the UK increased its 2050 target from 80% to 100%, meaning it too would strive to be climate neutral by 2050.
With the UK having split from the block, the UK-EU Trade and Cooperation Agreement (TCA), is the basis of the new UK-EU relationship. The TCA does express briefly that climate change is an issue that needs global attention and is an existential threat to humanity. However, the Brexit deal is a broad outline of the new trading relationship, primarily focused on the exchange of goods. It doesn’t offer specific mechanisms or platforms for facilitating joint action on issues such as climate change. Therefore, on climate change policy, there is room for divergence between the UK and the EU, and for each side to set its own agenda.
One area in which the UK has chosen to lead its own path is on emissions trading – the system by which businesses’ emissions are capped. The EU Emissions Trading System (ETS) was adopted in 2005 and required businesses to buy permits for each unit of their emissions, and the number of permits was being steadily reduced over the years to account for more ambitious climate targets. UK operators were bound by the EU ETS between its adoption and 2021, post-Brexit. The UK was given the option of remaining a part of the EU ETS, but it opted to go a separate way and create its own UK Emissions Trading Scheme (ETS). The UK’s scheme is arguably more ambitious, perhaps due to the country being the COP26 host, and it sets the cap 5% lower than the EU’s. That said, the Climate Change Committee has warned that separate schemes would decrease coverage and risks having lower effects on the market in the long term, and risks price instability. The UK Government has stated that it is open to the possibility of linking its ETS with other global systems in the future, but so far this has not happened. In this way, it can be seen that there is some scope for divergence on climate change policy in the current relationship.
However, naturally, the two parties’ policies are very similar and although there is now scope for divergence in policy, in most areas they are closely aligned. In November 2020, Johnson presented his ‘ten-point plan for a green industrial revolution’. The plan includes a combustion engine ban on cars by 2030, and on hybrid cars by 2035. Mirroring this, the EU also plans to ban all combustion engines by 2035. The UK and the EU also both have big wind power aspirations. Johnson plans to quadruple wind power production to generate 40GW of offshore wind power by 2030, and the EU’s renewable energy expansion plans means the EU will also need to produce 180GW more in wind power by 2030. Subsequently, with both parties’ values being alike regarding climate change, it seems unlikely that there will be much significant divergence any time soon.
In similar fashion, both sides have signalled their intention to pioneer an increase in global ambition, and COP26 was an opportunity to do so. The EU has maintained its intention to be a world leader on climate change policies. With the implementation of European Green Deal policies, the Commission sees itself as setting a strong example for the rest of the major world powers. Furthermore, Commission President Ursula Von der Leyen had stated the EU would go to COP26 in Glasgow with “the highest level of ambition”. Likewise, the UK as hosts of the conference, had expressed an intention to lead the way at the conference. The main aim of the climate conference was to keep the 1.5°C dream alive, to stop global temperatures from rising over 1.5°C. To do this, it was necessary to advocate stronger measures for this decade, to try to cut global emissions as much as possible. The UK and the EU needed to lead other major global emitters to adopt more ambitious policies that would move them closer to their net-zero commitments.
By the end of COP26, participating countries had agreed to “revisit and strengthen” their 2030 emissions targets by the end of 2022, and commitments were just about strong enough to keep the 1.5°C dream alive. From a UK-EU cooperation perspective, the conference can be seen as a success. It became clear that at the technical working level, there was some good cooperation. Specifically, there is a good working relationship between the UK’s COP26 President Alok Sharma and the Commission’s Executive Vice-President for the European Green Deal Frans Timmermans. Collaboration of this kind is necessary and productive for both sides, and is important for the world, if the global climate change goals are to be achieved.
At BritCham, we have a Sustainability Committee connected to our EU Policy Hub and also covering practical business impacts. We have recently hosted many events related to climate change both within that committee, and with other committees. To name a few, we have held events on sustainable investing, the European Green Deal, the Carbon Border Adjustment Mechanism (CBAM) and the role of agriculture in fighting climate change. With issues like climate change, the Chamber can play an important role being a platform on which British and European officials can continue to speak post-Brexit, while hearing the input of international businesses. In this way, our events and activity will help to support the much-needed conversation and cooperation between the UK and the EU on climate change and that this conversation will resume post-COP26 to achieve the target set by both the UK and the EU to be climate neutral by 2050, and strive to keep global temperature rise below 1.5°C.