Will Brexit put the brakes on climate policies?

News - 6/8/2017

Any mention of the word ‘climate’ was entirely absent from the UK’s farewell letter to the European Union and 12 months after the UK voted to leave there are still doubts over the future of climate policies.
Predictability and stability are essential for investment decisions and efforts to reach climate targets.

The issue is of paramount importance as predictability and stability are essential for investment decisions and efforts to reach climate targets. This is why the Institutional Investors
Group on Climate Change (IIGCC), which represents 140 European institutionals, has published a report urging the UK government to adopt an ambitious decarbonisation strategy1.

It is difficult to say precisely how much European environmental legislation exists but it is certainly substantial. The UK is therefore expected to transpose community acquis like treaties, rules, directives and the European Court of Justice’s decisions and judgments when it draws up its Great Repeal Bill2. Repatriation of environmental policies is seen by some as an opportunity to go even further while others fear a move to turn the clock back.



  • Maintaining the UK within the European energy market has raised doubts over interconnections and funding.
  • The UK has confirmed that it wants to exit Europe’s atomic energy community (Euratom). This has triggered worries over the nuclear industry’s stability and raises questions over (i) how to replace Euratom inspectors with a new inspection framework acceptable to the International Atomic Energy Agency and (ii) the renegotiation of certain agreements.
  • Brexit may also mean the UK leaving the EU’s emissions trading system. Note that following the Brexit referendum result, CO2 prices slumped.


  • The UK Climate Change Levy was supposed to increase in 2019 but its future is now unclear.
  • The UK could miss its 2020 renewable energy targets3, and accompanying measures could be called into question.
  • Freed from any European Court of Justice pressure, the UK may well prove less inclined to harmonise legislation.



  • The European Commission will continue to play a core role in rolling out legislation, notably by providing advice, guidelines and interpretations and sharing information. At the same time, the European Court of Justice will oversee effective compliance with legislation in environmental areas thanks to its ability to impose financial penalties and possible reputation risk.
  • International conventions like Berne and Basel which the UK has ratified will continue to count. - Access to the single market will still require compliance with EU product regulations and legislation like REACH (chemical products) and Ecodesign (energy efficiency).
  • The UK was the 111th country to ratify the Paris Agreement, a move that investors and companies took as an important signal. And it is still expected to announce its own contribution, called Nationally Determined Contributions (NDC).


  • Some observers expect the UK’s agricultural policy to better integrate environmental aspects.
  • The UK has its own climate laws. They aim to reduce greenhouse emission by 80% by 2050. There is also a 10-year climate plan which can be readjusted every 5 years. The UK government raised its sights in July 2016 in its 5th carbon budget (2028-2032). The objective is to reduce greenhouse emission by 57% by 2030 compared to 1990 levels4.

1. An Investable Emissions Reduction Plan. March 2017.
2. Abrogation of the 1972 law which incorporated European legislation into British law, and translation of European laws into national laws.
3. 15% of energy requirements from renewable energy sources by 2020.
4. https://www.theccc.org.uk/tackling-climate-change/reducing-carbon-emissions/carbon-budgets-andtargets.