As the dust settles on Britain’s unexpected decision to depart the European Union, there are more questions than answers about what the pullout means for everything from trade to energy policy.
Bewildered European policy analysts—many of whom assumed the “Brexit” referendum would deliver a narrow victory for the “remain” camp—are still grappling with Thursday’s result. What will the split between Britain and the other 27 nations of the European Union mean for British expats? Do a tumbling pound sterling and nervous markets presage a long post-split recession? And what does Brexit mean for Britain’s access to the single market and for its climate policy, which is now a mixture of domestic law and international engagement that is likely to take years to untangle as Britain departs?
“It’s early to say, but I’m assuming that part of the negotiations that will happen over at least the next two years will be how the U.K. will align itself with the E.U.’s climate and energy policy,” said Wendel Trio, president of Climate Action Network Europe.
But the United Kingdom’s continued involvement with the continent won’t necessarily follow the preferences of the departing country, analysts say. Instead, it will have to be approved by a European Union that might be keen to make an example of the country that jilted it to quash similar movements in other member states.
Here are three of the top unanswered energy questions the United Kingdom must resolve:
1. What does Brexit mean for the Paris Agreement on climate change?
One of the first questions to be settled is how Brexit will affect Europe’s commitment to last year’s landmark Paris climate agreement. The European Union put forward a combined promise to cut emissions at least 40 percent compared with 1990 levels by 2030, and Brussels planned to spend the summer divvying that responsibility up among its members in preparation for joining the deal. But the impending departure of the European Union’s second-largest emitter throws a monkey wrench in that plan.
Member of Parliament Barry Gardiner, the Labor Party’s shadow energy and climate minister, told ClimateWire that Brexit could jeopardize the global warming accord.
“The implementation of the Paris Agreement on climate may now be seriously undermined,” he said, noting that the United Kingdom played a leading role in pushing for greater E.U. ambition ahead of the deal and also acted as a bridge between Western European powers and Eastern and Central European countries like coal-dependent Poland on climate and other issues.
The United Kingdom is on a pathway to cut its emissions 57 percent by 2030 under a 2008 domestic law—a trajectory that would have gone a long way toward delivering the European Union’s collective commitment.
That raises the question of how the United Kingdom will formulate its own contribution to the Paris Agreement now that it is leaving, and how that exercise will affect the rest of Europe.
Trio said Britain’s pledge would need the approval and input of the other 27 nations because national contributions were considered in the E.U. contribution. But he didn’t think the European Union could renege on its pledge simply because it is losing Britain.
“A number of countries will have to do more than in a scenario where the U.K. would stay in the E.U., but I’m also assuming that there might be discussions about how to mitigate that,” he said. “But I think it would be very hard for E.U. leaders to reduce the pledge.”
Elliot Diringer of the Center for Climate and Energy Solutions said the Paris Agreement allows countries to change the pledges they made in Paris only if they increase them.
“The E.U. will obviously be encompassing a smaller share of emissions, and how they go about recalculating that we can only speculate,” he said.
Britain’s path to joining the agreement is expected to be much the same as it would have been had the referendum vote gone the other way. There was some speculation last week that Britain might buck the European Union and join Paris unilaterally—a move that would help the deal enter force this year.
But doing that would be in violation of E.U. procedure, and Prime Minister David Cameron has promised an orderly withdrawal from the union.
2. How will Brexit affect U.K.’s participation in the E.U. ETS?
The United Kingdom also introduced carbon trading before the rest of Europe embraced it. It enacted the world’s first multisector cap-and-trade system in 2001, which informed the European Union’s Emissions Trading System that premiered in 2005 and is now in its second commitment period.
But last week’s referendum casts doubt on whether Britain can continue to participate in the E.U. program, which is part of the single market to which analysts warn Britain may have difficulty gaining access.
Trio said the European Commission would have a strong incentive to let Europe’s second-largest emitter participate and might not throw up barriers.
“It’s an important part of the market, and the bigger the market is, the more relevance the instrument has,” he said. “So I would expect that the European commission would be very strongly in favor of keeping the U.K. inside the ETS.”
But he acknowledged that participation in the ETS would now be subject to negotiations between Britain and the compact it is leaving.
The tone of those talks “is, of course, hard to predict,” he said.
There is precedent for non-E.U. countries to participate in the ETS. Iceland, Norway and Liechtenstein all do.
“The Brexit verdict does not mean that the U.K. cannot continue to play a central role in the carbon market,” officials with the International Emissions Trading Association said in a statement. “Continuity is vital to maintaining the integrity of the market, and it’s also critical to maintaining the global momentum from the Paris climate talks last December.”
But the three non-E.U. members of the ETS abide by trade policy set by the European Union and even contribute to its budget as a condition of accessing the union’s single market—strictures a post-Brexit Britain is unlikely to embrace.
In Switzerland, which is also not part of the compact, talks have stalled for the moment over whether and how that country would link its ETS with the European Union’s program. Switzerland has balked at E.U. policies concerning movement of labor—one of the top concerns expressed by pro-Brexit voters in the United Kingdom.
And observers say the European Union would be unlikely to ease U.K. access to any part of the joint market—whether for trading, participation in the European electricity and gas markets, or anything else—for fear of encouraging populist movements in other countries.
“The security that the U.K. felt as part of the wider European Energy Union will now be lost,” said Gardiner. “[That] is likely to make the U.K. decide that it must press ahead with domestic fracking and the production of unconventional gas. In the U.K. context, this would lock our energy infrastructure into a pathway that rendered it impossible to meet our long-term emissions reductions.”
3. What will Brexit mean for the U.K.’s own climate laws?
For the moment, there aren’t votes in Parliament to roll back Britain’s domestic climate policies, but advocates worry that could change.
Cameron announced after the vote that he would step down to make way for other leadership this autumn, and one of the top contenders for his job is former London Lord Mayor Boris Johnson.
The new prime minister will have a lot of sway over how the United Kingdom formulates domestic policies to replace European policies, like the E.U. ban on hydraulic fracturing.
“One of the fears that we have is that the Brexit victory will actually strengthen those who are to the right of the political spectrum in the U.K., many of them more critical to ambitious climate and energy policy,” said Trio. “So it might be that even while climate and energy were part of the Brexit debate, that those who are favoring less strong policies might feel stronger and might attack existing legislation.”
Gardiner noted that many of the political operatives who supported the E.U. exodus are also skeptics of climate action or science.
Johnson’s statements on the issue have been mixed, while fellow Brexit leaders like former Secretary of State for Education Michael Gove and figurehead Lord Nigel Lawson have disputed the scientific consensus. Anti-regulatory sentiment was also a major driver of the Brexit movement.
“Sad to relate, perhaps, but nonetheless true, is the fact that the very people who have criticized the U.K.’s ‘excessive zeal’ on climate policy are those who have led us out of the E.U.,” Gardiner said. “They have done so because in almost all cases, they want less regulation.”
Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500