There should be no rowing back on the environment after Brexit – that’s the clear message from 13 environmental advocacy groups this week in a statement that has already received the support of almost 200 MPs.
But post-referendum, the UK’s future participation in the EU’s Emissions Trading Scheme (EU ETS) is far from certain. And that’s a problem.
The EU ETS goes to the heart of Europe’s combined efforts to tackle climate change. It works by allowing a certain amount of carbon emissions for each major industrial sector in EU Member States. It then permits the sale of allowances between participants.
This is called a ‘cap and trade’ emission scheme. The idea underpinning the EU ETS, like all cap-and-trade schemes, is that firms and industries face different levels of difficulty in reducing emissions. If the firms and industries who can make reductions quickly and easily can sell reductions to those that can’t, the overall cap on emissions can still be adhered to.
That’s the theory. In practice, it has proven more complicated.
An overall emissions cap has been respected. But industries have been granted an abundance of low-price allowances, a disincentive to invest in new technologies. The UK, up until now a constructive voice in efforts to improve the EU ETS, has grown increasingly critical and is now looking at alternative options.
The EU ETS is flawed. But leaving entirely would be a mistake.
A new scheme would take time to develop, and in the fight against climate change, time is not on our side – a point made clearly in the recent House of Lords paper on the complications posed by Brexit.
Submissions to the House of Lords inquiry were near unanimous in their support for the UK staying a part of the EU ETS. As 20 – 25% of UK emission reductions are currently met through ETS allowances, it has been estimated that leaving the EU ETS would increase the cost of the UK reducing emissions by 40%.
Brexit risks jeopardising years of domestic progress, but such commentary misses an important point: reducing UK emissions is not the primary objective of climate policy; warding off global climate change is.
The EU ETS is the largest carbon market in the world and the UK could assume a leading role in pushing for genuine reforms to tackle climate change, as is currently the case.
Brexit threatens to isolate us from our closest allies at the very time we need each other most. On big international issues, we only stand a chance of making change when we stand together.
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