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Priority 7: Climate change and environmental protection

19 June 2017


Cross border cooperation is vital to tackle climate change and environmental protection. The UK is an active participant in the EU Climate and Energy Framework which incorporates member state targets for greenhouse gas (GHG) emissions reduction and the world’s largest Emissions Trading System (ETS) for heavy industry and the power generation sectors. The UK is considered part of the EU’s 2030 GHG reduction obligations under the 2015 Paris Agreement on Climate Change, and has obligations under EU legislation on renewables, energy efficiency and industrial emissions.The UK is also subject to EU environmental legislation covering such diverse areas as nature and biodiversity, waste and recycling and chemicals regulation.


Challenge: Reduced cooperation on climate change and decarbonisation
A UK withdrawal from the ETS could distort the price of carbon and create a host of ancillary problems that could necessitate a redesign of the entire model. While the UK could choose to retain its GHG reduction targets, it would no longer be subject to EU fines or reporting requirements. A withdrawal from the Effort Sharing Regulation (ESR) may increase the burden on the EU27. Failure to comply with the medium and large combustion plant directives could confer an advantage on UK energy intensive industries.
Challenge: Reduced cooperation on climate change and decarbonisation

A UK withdrawal from the ETS could distort the price of carbon and create a host of ancillary problems that could necessitate a redesign of the entire model. While the UK could choose to retain its GHG reduction targets, it would no longer be subject to EU fines or reporting requirements. A withdrawal from the Effort Sharing Regulation (ESR) may increase the burden on the EU27. Failure to comply with the medium and large combustion plant directives could confer an advantage on UK energy intensive industries.

Solution The UK should continue to participate fully in the EU Climate Framework; the ETS and the ESR on GHG reduction. Even if the UK withdraws from the IEM, new arrangements should be put in place to link the UK to the ETS.

Solution The UK should maintain the EU environmental acquis or adopt equivalent measures as part of any future trading agreement.