European Commission President Ursula von der Leyen unveils the European Green Deal in December 2019. Photo: Getty Images.
In December 2019, the EU launched the European Green Deal, a comprehensive policy package which aims to make the continent carbon-neutral by 2050. It contains a wide range of legal and policy measures including support for restoring ecosystems and biodiversity, low-carbon mobility, and sustainable food systems and healthy diets.
Even though the UK has now left the EU, and the UK government has made clear that there will be no regulatory alignment and no rule-taking from the EU, this will affect Britain’s markets, trade negotiations and stance in global climate action.
The UK has essentially three choices in how to react. First, non-alignment, with low ambition for domestic climate and environmental policies and product standards; second, so-called dynamic alignment, which means non-regression on existing environmental regulations, with domestic UK policies mirroring those of the EU in the future; third, non-alignment but higher ambition, with a domestic policy agenda to emerge as global leader on climate and green industrial development.
What would be the consequences of each of these three options?
Non-alignment
There is concern that the UK might be going down this route, swapping an established set of stringent EU environmental protections for a new set of deliberately loose regulations. For instance, standards on air pollution have been watered down in the new UK Environment Bill.
As part of the European Green Deal, a carbon border adjustment tax to prevent ‘carbon leakage’ – companies relocating to countries with laxer climate policy outside the EU to avoid higher costs, with the result of increasing overall emissions – was also announced. The EU has already threatened to potentially apply this mechanism against the UK as part of its policy to ensure a ‘level playing field’ in trade between the two.
Non-alignment on European carbon taxation and border adjustment would help to facilitate a quick trade deal with the US but it would clearly make it more difficult for UK businesses to sell into the EU market.
Furthermore, the UK’s and the EU’s climate security concerns and interests continue to be closely tied together. Ignoring European climate policy developments might jeopardize the UK’s long-term climate security.
Dynamic alignment and mirroring future standards
This would be beneficial to the future industrial competitiveness of the UK’s manufacturing sector.
The European Green Deal is more than a set of ambitious environmental policies. It also includes comprehensive plans for industrial policies, digitalization, financing mechanisms and investment programmes.
A new Circular Economy Action Plan to be published in March 2020 (a leaked draft version is available) will introduce a set of new targets and regulations on a range of products. The aim is that ‘by 2030, only safer, circular and sustainable products should be placed on the EU market’.
We can expect to see new eco-design requirements for information and communication technologies, and a revision of laws on hazardous substances in electrical and electronic equipment. The European Green Deal also aims to boost trade in secondary raw materials with regional initiatives aimed at ‘harmonizing national end-of-waste and by-product criteria’. Those could be a first step towards EU-wide criteria.
Furthermore, the European Strategy for Data will facilitate the development of a ‘single market for data’ and develop electronic product passports which can improve the availability of information of products sold in the EU to tackle false green claims.
The UK would benefit from mirroring these industrial policies domestically to achieve equivalence of standards. This could facilitate a closer partnership and would potentially also offer chances to UK businesses in the green technology sector to benefit not only in terms of EU market access, but also from the European Green Deal investment plan – a €1 trillion opportunity.
Higher ambition: aiming for global leadership
This gives the UK the unique opportunity to become a frontrunner. There are many challenges to implementing the European Green Deal, such as member states with little interest in green issues, which the UK can avoid.
The new UK Environment Bill is the first example of a policy departure from EU regulations. While there are some elements that point to a loosening of standard, in statements accompanying the bill, the Department for Environment, Food and Rural Affairs has insisted that the UK will not be bound by future EU green rules and even ‘go beyond the EU’s level of ambition’ on the environment.
For example, the bill introduces new charges for single-use plastic items to minimize their use and incentivize reusable alternatives. Plus, the UK aims to exceed the EU’s level of ambition to create global action by introducing powers to stop the exports of plastic waste to developing countries.
Taking a global leadership role on climate would also benefit the UK’s climate diplomacy to make this year’s COP 26 (jointly hosted with Italy) in Glasgow a success. The European Green Deal agenda sets a new benchmark for climate action and shows global leadership. If the UK also wants to be seen as leading the climate and sustainability agenda, it can scarcely afford to be seen as falling behind.