Chapter 6: The drivers for alignment of standards and policy
Opportunities for the UK
98.We asked witnesses about the potential for legislative change after Brexit. Prof Macrory told us: “There will be opportunities to improve things, if we want to. Not everything is right with EU law and the structure of EU law.”149 The Minister, Dr Coffey, agreed: “There may be some things that we think are no longer fit for purpose or not achieving the outcomes which they were originally intended to that we have an opportunity to change.”150 She suggested that after withdrawing from the EU the UK would have the opportunity to develop regulations “more bespoke to the needs of Britain.” In particular, she noted that “different parts of our country have different environmental challenges”. For example, “Water stress is a massive issue in the south and the east; it is not a big issue elsewhere. You might want to design a policy and a scheme that is more tailored, whereas at the moment they have to be quite uniform.”151
99.Other examples were given by Ms Mukherjee, Jacob Hayler, Executive Director at the Environmental Services Association, and the Mineral Products Association, as well as by Dr Coffey, who all cited definitions of waste in EU legislation as operationally unhelpful and restricting positive action.152 The Game and Wildlife Conservation Trust mentioned the merits of a more open approach to developing genetically modified food,153 while Mr Elliott and the CLA noted that the removal of the EU’s state aid rules could allow for a simplified and more ambitious climate change policy within the UK.154
100.The key opportunity highlighted by witnesses was stronger future integration of policy areas such as agriculture and environment policy,155 and energy efficiency and industrial policy.156 Dr Doug Parr, Policy Director of Greenpeace, suggested that agriculture policies “could be reconfigured so as to have environmental protection at their core rather than as an add-on.”157 The Wildlife Trusts described Brexit as “an opportunity to develop a more ambitious policy which is integrated across a holistic range of environmental elements (soil, biodiversity, food, water quality, flood risk, access and recreation, etc.) and which provides a greater opportunity to farm in a more sustainable and innovative way.”158 The Ministers agreed. Dr Norman told us: “I have noticed that there are clear opportunities for, if not synergy, a more interesting, holistic view of some of the issues.”159 Dr Coffey told us: “I think there are good opportunities for us to think through future agricultural support, as an example, where we want to drive specific environmental outcomes.”160
Policy alignment: trade
101.Many witnesses thus saw Brexit as an opportunity to address elements of environmental policy and seek some degree of change in policy. But witnesses also recognised that any change in policy direction would be constrained by the need for some degree of continued policy alignment in order to facilitate trade with the EU.161 As we noted in Chapter 5, the future relationship between the EU and the UK will affect the UK’s ability to set environmental standards. Speaking to the Committee in July 2016, Dr Charlotte Burns, Senior Lecturer at the University of York, argued that were the UK to pursue a free trade agreement or trade under WTO rules,162 “there would be scope for the UK Government to put in place different standards”.163 At the same time, she acknowledged that “There will be strong pressure … upon the UK to maintain broadly comparable standards with our European partners”.164 In respect of goods, compliance with environmental standards (such as for engine emissions or Ecodesign) is a pre-condition for full access to the Single Market. Another example, provided by Mr Elliott, is that “Any product coming into the European Union from wherever would need to meet the requirements of REACH.”165
102.Around half of the UK’s overall trade (import and export) is with the European Union, though this figure is higher in some sectors.166 For those engaged in trade, therefore, continuing co-operation on environmental standards is likely to be a key priority. The Mineral Products Association told us: “European Environmental Standards are likely to remain a benchmark for international acceptance, and a requirement for access to the EU market.”167
103.Ms Elliott suggested that for the EEF: “Our members absolutely will continue to comply, and there are many reasons for them to continue to comply—most important is retaining that access to the Single Market.”168 She added:
“Many of our members tell us that there are advantages of having one set of regulations and rules with the EU, and our manufacturers tell us they do not want to have to create multiple products for multiple markets; they want to create one product that they can export to a number of markets, at the same time as maintaining the current level of commitment to environmental standards.”
104.Mr Elliott gave another example: “To try to look at, adapt and adopt alternatives [to environmental permitting] would be very complex and incredibly resource-intensive.”169 He noted that “Any differences in compliance requirements could be a financial burden on exporters and importers.”170 The Mineral Products Association raised similar concerns.171 However, Mr Elliott also acknowledged that:
“If you are a UK-based chemical business whose trade is perhaps much more with other parts of the world, such as the United States and Switzerland, there is a feeling among that community and our membership that there is some scope for … a regime that is a bit more risk-based, pragmatic and proportionate than the demands that REACH puts upon their trade with the European Union.”172
At the same time, he noted that “there are many countries and regions of the world that are now following the example which the European Union has set with REACH. South Korea is an example, and others are following”.173
105.Policy alignment may also be desirable to maintain competitiveness. The CLA argued:
“If the UK were to set more ambitious emissions targets for itself, there would be the risk that those sectors that compete with EU Member States, such as agriculture, could end up subject to far stricter requirements, and therefore having to pay additional costs, compared with their competitors”.174
Similarly, the Mineral Products Association raised the concern that “post-Brexit, further disparities will develop between the UK Regulatory [sic] approaches and those adopted by other countries, both in Europe and more widely, which disadvantage UK manufacturers operating in global markets.”175
106.The policy alignment that would allow for continued trade with the EU could also aid environmental protection within the waste sector.176 Mr Hayler told us that just over a quarter of the sorted materials the UK exported to be recycled back into products went to the EU,177 and that, thanks to the limits of the UK’s domestic processing capacity, “We are going to have to keep relying on those overseas markets to fulfil our recycling ambitions.”178 Geographical proximity was a key enabler of this trade:
“There is a lot of overcapacity for that sort of treatment in other parts of northern Europe and they are very keen for us to maintain those flows of materials into their facilities. It would be a cost issue. If we were further away it would be too expensive to do that, whereas for recycling that material has a positive value which means it can travel a lot further.”179
107.Furthermore, Mr Hayler told us that the UK exported “around 4 million tonnes of waste as fuel to the EU”, under the terms of the Waste Shipment Regulation.180 He still expected the industry to be able to export waste after Brexit,181 but noted that “There are fears about potential future tariffs … [which] would drive up our costs and create difficulties for waste management in the UK.”182
108.Prof Grubb and Prof Howell both raised the possibility of equivalent environment and climate standards being incorporated into the UK’s future trade agreements with the EU.183 Roseanna Cunningham MSP, Cabinet Secretary for Environment, Climate Change and Land Reform in the Scottish Government, told us: “It is important that bilateral trade deals support the achievement of environmental and climate change objectives. Whatever the good intentions of governments, we know that maintaining high standards is difficult without trading arrangements that allow this to happen.”184 The Minister, Dr Norman, noted: “Environmental standards are already written into trade agreements that the EU has. It is a well-known issue to try to make sure that the standards, as it were, are applied across a level playing field in trade agreements”.185
109.Whatever the shape of the UK’s future free trade agreement with the EU, there is a strong shared interest in maintaining cross-border trade. A degree of alignment between the UK and the EU on environmental standards will thus continue to be key to maintaining access to each other’s markets across many sectors.
110.Any restrictions, or the imposition of tariffs, on the UK’s trade with the EU in recycling and waste could significantly increase the costs of waste management post-Brexit. Once the UK Government has clarified the details of the FTA it is seeking with the EU, the Government, in consultation with industry, will need to assess whether its approach to waste management is still feasible and fit for purpose.
Policy alignment: effective protection of the natural environment
111.There is also a practical case for some degree of continuing policy alignment, stemming from the cross-border nature of environmental challenges. Ms Bunker argued that “more than any other part of the world we live in, the natural environment transcends political and national boundaries.”186 The UK’s natural environment is intertwined with that of other EU Member States and, in areas such as climate change and marine pollution, the rest of the world. As Prof Lee told us: “When we assess environmental quality, consumer safety and all those things, it is not just about the science. It is, indeed, about the world we want to live in and about politics as well as science.”187
112.Thus if the UK or the EU are to regulate the natural environment effectively after Brexit, a degree of policy alignment will be necessary. As Dr Parr told us: “there are clearly a number of areas where it makes absolutely no sense to try to do stuff on your own.”188 The RSPB agreed: “Specifically as regards wildlife, an alignment of EU and UK nature conservation policies and actions will increase the chances of UK actions being successful.”189 Co-operation allows broader geographical coverage, a focus on transboundary connectivity, and opportunities to share knowledge, experience and best practice.
113.The Minister, Dr Coffey, acknowledged that “the environment and climate change really do not know boundaries, so it will continue to be a feature of our policies moving forward to work closely with the EU as well as other countries”.190 Mirroring the Minister’s point, Mr Hutchings drew on the character of environmental issues as a driver for co-operation:
“We benefit from migratory birds, but they will be affected by regulations applied in other parts of Europe where they migrate to and from. Likewise, some of the air quality challenges we face in the UK are a consequence of what happens in continental Europe, and surely the UK will want to influence the regime in Europe.”191
The Wildlife Trusts also cited migratory species as a case “where stringent action in one country will not be nearly as effective if it is not replicated within those countries which share that species’ range.”192
114.Ms Cunningham noted that this was also true of climate change: “Climate change targets are challenging, and the best way of achieving them is to continue with multilateral engagement and collective effort, especially to deliver the Paris Agreement commitments.”193 Ms Davis commented that, although the UK and EU had shared ambitions, particularly with regard to climate action, “The question is how we share some of that effort. At the moment we have effort-sharing in decisions on climate and emissions trading, and the question is about how that is split further on.”194
115.The UK’s commitment to overarching international agreements underlines the cross-border nature of environmental challenges, and thus the UK’s shared interests not just with the EU but more widely. Ms Bunker told us:
“Some of the European legislation we have been talking about, the Birds and Habitats Directives and others, takes its lead from international Conventions—the Berne and Bonn Conventions and the Convention on Biological Diversity … If the UK Government take those commitments seriously, and if the EU does, there will need to be alignment to some extent.”195
116.Witnesses highlighted a number of environmental policy areas necessitating policy co-operation and alignment in order to ensure effective environmental protection regardless of Brexit. Though it is beyond the scope of this report to consider them all in detail, we highlight three examples below.
Marine and aquatic environments
117.Prof Howell reminded us that “we are geographically intertwined with our neighbours’ marine space.” As a result, “effective management of this sensitive environment and the activities that go on within it … calls for some level of cohesion and consistency that previously was provided from working within the EU framework, or that of the OSPAR Convention.”196 He therefore believed that marine management must be done “on a regional sea basis”.197
118.As we noted in our report Brexit: fisheries, the geographical proximity of the UK to the EU necessitates a degree of co-operation and alignment of policy if the marine environment, and the living resources found therein, are to be managed effectively and sustainably.198 This affects both commercial fishing and marine conservation. As The Wildlife Trusts argued: “Truly sustainable fisheries cannot be achieved without transnational cooperation.”199
119.The Wildlife Trusts also suggested that a “pragmatic approach” to co-operation would be appropriate for managing offshore marine sites, where agreement with EU Member States would be required, but added that it “needs to be clear who is going to pay for the monitoring” of these sites.200 The Geological Society noted that the Water Framework Directive “was designed to shift the management of water resources to river basins, which can cross political borders”.201 They added that it was “widely considered to be effective … and has yielded very positive results”.
120.The Minister, Dr Coffey, told us that “the UK has been at the leading edge in trying to improve marine conservation and we need to make sure that others do not slide back on it.”202 We welcome her commitment to the marine environment.
121.The desirability of continuing cooperation on managing the marine and aquatic environments is brought into sharp focus by the existence of a land border between Northern Ireland and the Republic of Ireland. Witnesses noted that there would be a particular need to co-operate with the EU regarding “the management of water across the border between Northern Ireland and the Republic of Ireland”.203 Moreover, Michelle McIlveen MLA, Minister of Agriculture, Environment and Rural Affairs in the Northern Ireland Executive, noted that other transboundary environmental issues were at play in the region: “The interconnections of the terrestrial, atmosphere and aquatic environment on either side of the border highlight the continuing need for practical co-operation.”204
Air quality
122.The environmental and health impacts of air pollution are widely acknowledged.205 Mr Andrews told us that air pollution was “obviously a transboundary environmental problem par excellence.”206 Dr Parr agreed, calling it a strategic priority for working with the EU.207
123.The Minister, Dr Coffey, told us that a lot of the UK’s air pollution came from the continent.208 Mr Andrews developed the point: “of the PM2.5 pollution, the microscopic harmful particles that we breathe into our lungs and which are very harmful to human health, causing something like 29,000 early deaths each year, only about half originates in the UK.”209 But he also emphasised that pollution originating in the UK affected the EU in return, noting that “prevailing winds tend to take our pollution over to the continent more often than not, so we are a net exporter”.210
124.Dr Parr therefore believed that there was “a whole suite of regulatory standards where we share a common space. Those apply to vehicles, but we should also work with the Large Combustion Plants Directive, NEC ceilings, and the Industrial Emissions Directive”.211 He concluded: “I think it would create quite a lot of animosity if we were effectively lowering our standards and dumping pollution on our European neighbours.”
Climate change
125.Action to combat climate change is co-ordinated to a considerable degree at a global level. The UK’s contribution to this effort is predominantly as an EU Member State, and the UK actively participates in the mechanisms the EU has introduced to meet collective targets. The EU’s climate action policies include targets to reduce greenhouse gas emissions, and mechanisms to help its Member States meet those targets cost-effectively and to ensure that each contributes its fair share to the collective effort. The evidence we received drew out the extent to which co-operation with the EU affected the UK’s emissions reduction targets and ability to meet them, and how Brexit might change that co-operation. Matthew Bell, Chief Executive, Committee on Climate Change, stated that “our sense was that about half, 55% or so, of the emissions reduction that the UK would have made to 2030 would have come from policies that would have been negotiated at an EU level”.212 Ms McIlveen echoed this view, adding that changes to EU policies such as emission standards for cars and buildings, eco-design requirements for energy-related products, energy labelling systems and restrictions on fluorinated industrial gases (F-gases),213 “may have an impact on our contribution towards UK, EU and international emission reduction targets”.214
126.Other witnesses noted the difficulties the EU may face in meeting its targets, post-Brexit. The Grantham Institute told us:
“The latest figures published by the European Environment Agency show that emissions from the 28 Member States were 24.4 per cent lower in 2014 than they were in 1990. But without the UK, the emissions of the 27 Member States were only 22.8 per cent lower in 2014 than in 1990.”215
Mr Ward underlined the point, noting that the EU has a target to reduce its greenhouse gas emissions by 40% relative to 1990 by 2030, but that “because the UK has been cutting its emissions more quickly than other Member States [this target] will be more difficult for the other Member States to collectively achieve.”216
127.One of the EU measures that has contributed to the UK’s emissions reductions is the EU Emissions Trading Scheme (EU ETS), described in Box 5. The Government’s view, as set out by Dr Norman, is that the EU ETS: “is not functioning perfectly at the moment”. He added: “It is a further matter for discussion at government level as to whether or not we withdraw from that or what relationship we might have with it in the future.”217
Box 5: EU Emissions Trading Scheme
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The EU ETS is part of the EU’s policy to combat climate change and its key tool for reducing greenhouse gas emissions cost-effectively. A cap is set on the total amount of greenhouse gases that can be emitted by the sectors covered by the system. Within the cap, companies receive or buy emission allowances, and each year a company must surrender enough allowances to cover all its emissions. The EU ETS is the world’s largest carbon market. |
Source: European Commission, ‘The EU Emissions Trading System (ETS)’: http://ec.europa.eu/clima/policies/ets_en [accessed 19 January 2017]
128.A number of witnesses agreed with the Government that the design of the EU ETS had not been entirely effective. According to Mr Bell: “It has a long way to go to be a scheme that properly delivers the levels of reduction that are compatible not just with the UK’s commitments but with the EU commitments as well to the Paris Agreement”.218
129.Nevertheless, the Aldersgate Group told us that “on balance the UK should remain part of the EU ETS because as the scheme reforms over time, it has the potential to play a greater role within the UK’s suite of policies to meet its domestic carbon budgets cost-effectively”.219 The Grantham Institute told us that “UK companies benefit from being a member of the ETS because it increases the potential market within which they can sell and purchase allowances, reducing the overall costs of compliance”.220
130.We also heard that, if the UK were to withdraw from the EU ETS, “there is an open and rather complicated question about what happens to emissions permits that might have originated in the UK but are no longer held there”.221 Mr Bell explained that “UK-based companies have acquired allowances through the EU Emissions Trading Scheme that have some value, and there would have to be, as part of the negotiations and discussions, a discussion about what happens to those existing allowances that they already own”.222 He also pointed out that if the UK withdrew it would have to change its carbon accounting system.223
131.Mr Bell also highlighted the cost efficiency of emissions trading schemes as a means of reducing emissions. He therefore asked: “If we are not part of the EU Emissions Trading Scheme … the first question I would have would be, first of all: could we be part of a different trading scheme?”224 In the light of moves towards emissions trading in North America, China and Australia, he concluded: “I think it would be unusual for the UK not to be part of a trading scheme as part of a cost-effective way of reducing emissions.”225 Other witnesses, in contrast, proposed a UK carbon tax as an alternative approach to reducing emissions post-Brexit.226
132.The transboundary nature of most environmental pollution means that failure to co-operate with the EU post-Brexit could have significant consequences for both the UK’s and the EU’s natural environment. Marine conservation, air quality and climate change are three key areas where the UK and EU environments will be conjoined as much after Brexit as before. The Government will need to co-operate with the EU in these areas, among others, to ensure environmental protection is maintained.
133.The land boundary in the island of Ireland presents particular and significant environmental challenges. We urge the UK Government to work with the Northern Ireland Executive, the Irish Republic and EU partners to enable effective long-term management of the environment on both sides of the border.
134.Climate change in particular is a global issue, transcending EU membership, which is most effectively combated by means of co-ordinated global action. We note that the UK’s withdrawal from the EU may affect both parties’ ability to meet their climate targets as currently established. The Government will therefore need to reassess the most cost-effective means of reaching the UK’s climate change targets post-Brexit.
135.Emissions trading schemes, when functioning well, are a cost-effective means of reducing carbon emissions, and the EU ETS is one of the EU’s flagship policies for mitigating climate change. If the UK does seek to continue to participate in the EU ETS, it should also seek to retain influence over its operating rules, to ensure that the system operates effectively. If, on the other hand, the Government does not continue to participate, it will need, as a matter of urgency, to evaluate alternative means of driving emissions reductions, so that the UK can continue to fulfil its national and international obligations.
152 Written evidence from the Mineral Products Association (ECB0005); Q 28 (Sarah Mukherjee); Q 24 (Jacob Hayler), Q 66 (Dr Thérèse Coffey MP)
156 Written evidence from the Mineral Products Association (ECB0005) and the Society for the Environment (ECB0011); Q 36 (Jonathan Gaventa),
161 These issues will be considered more broadly in the forthcoming report Brexit: trade in goods
162 For details on what trade under WTO rules entails, see European Union Committee, Brexit: the options for trade (5th Report, Session 2016–17, HL Paper 72), pp 51–62
166 See European Union Committee, Brexit: the options for trade (5th Report, Session 2016–17, HL Paper 72), table 1
176 Q 25. EU legislation regulates waste management, including landfill and incineration, as well as the transportation and definitions of waste. These regulations are under review as part of the Circular Economy package. Jacob Hayler set out the ways in which the EU governs recycling and landfill.
180 Regulation 660/2014 of 15 May 2014 amending Regulation (EC) 1013/2006 on shipments of waste, OJ L 189 (27 June 2014), pp 135–142
198 European Union Committee, Brexit: fisheries (8th Report, Session 2016–17, HL Paper 78), para 96
205 Environment, Food and Rural Affairs Committee, Air Quality (Fourth Report, Session 2015–16, HC 479)
213 Commonly referred to as CFCs and HFCs
220 Written evidence from the Grantham Institute (ECB0004) and the Scottish Government (ECB0012); also Q 79 (Matthew Bell), Q 40 (Bob Ward),