Uncertainty on energy and environment policy follow U.K. Brexit vote: Environmentalists fear an open door to fracking
There is a plethora of ‘unknowns’ in the United Kingdom today following last week’s historic referendum vote to leave the European Union (EU). But this is an advisory, rather than a legally binding, vote. Nothing will happen on the UK beginning a process of extrication from the EU until it invokes Article 50 of the Lisbon Treaty. As he resigned, Prime Minister David Cameron said that would be a job for his successor.
“What happens between a Leave vote and any Article 50 notification will be driven by politics,” wrote David Allen Green, the blogger around legal matters for the Financial Times. That having been said, amid a period of considerable political turmoil, environmentalists in Britain today are fearful, while energy investors are likely to be watching closely.
As the EU’s second largest economy, an exit by the U.K. also has implications for the Paris climate accord, particularly in the message it sends for the global collaboration needed to make quick progress on climate goals. Christiana Figueres, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC), said before the referendum that a Brexit vote would require a “recalibration” of some kind, but it is not yet clear what that might involve.
Ms. Figueres is in London later this week in her last speaking engagement in her current UNFCCC role as part of the Business & Climate Summit. More than 1,000 global CEOs, investors and politicians are to come together once again to set out “how business can and must take advantage of a swift transition to a climate resilient, low-carbon economy.”
In the past, the U.K. has led on actions on the climate, becoming the first country in 2008 to set long-term binding laws to cut emissions by 80 percent by 2050 and creating a voluntary carbon emissions market before the EU launched its own system. Today the EU has a 20% percent renewables goal by 2020, while Britain’s target is a more modest 15 percent. It is open to speculation whether the exit vote will influence the country’s targets going forward, as there are multiple factors to take into account.
For example, the European Investment Bank (EIB) has invested €7.2 billion ($7.95bn) into renewable energy since 2007, and the U.K. has been the biggest beneficiary, receiving 24 percent of these funds. The country’s future commitments are likely to weigh heavily on the continuity of such arrangements.
The U.K also has the world’s largest and one of the most advanced offshore wind industries. But many of these projects are being funded with EU money.
When it comes to shale gas, there are those who argue that the EU’s stance has served to hold the United Kingdom back – on fracking. While fracking activity in the United States is rising, the U.K. has demonstrated seriously divided views to date on the wisdom of moving ahead.
In fact, British government has for years led the charge against the EU’s environmental rules for fracking, and succeeded in 2014 in blocking a proposed law that would have required specific environmental impact assessments for shale gas projects.
But Boris Johnson, who is currently one of the individuals being considered as a potential replacement for outgoing Prime Minister David Cameron, is known to be pro-fracking. He once lobbied for fracking in London — saying “no stone should be left un-fracked”, reports EnergyDesk for Greenpeace.
Its analysis suggests a Brexit vote could lead to moves that would fast-track fracking across the country.
Dina Medland is an independent writer, editor and commentator with a strong focus on issues around corporate governance, ethics, the workings of the boardroom and sustainable business. She is on the team of contributors to @ForbesEurope and is an ex-Financial Times staff member who has been a regular contributor in recent years. Further details about her background and a portfolio of work – including her commercially sponsored blog ‘Board Talk’ are available on her website http://www.dinamedland.com