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What does Brexit mean for the green economy?

The UK’s decision to leave the EU may trigger changes to environmental regulations and policies, but several experts remain optimistic that the transition to a low carbon economy will continue regardless.

The UK’s decision to leave the EU may trigger changes to environmental regulations and policies, but several experts remain optimistic that the transition to a low carbon economy will continue regardless.

Following the shock result on 24 June, there are rising concerns that the decision could adversely affect the UK’s direction on green policies, with the environment largely left out of the debate in the lead up to the referendum.

Businesses will face uncertainty for at least two years after Article 50 – the EU release clause – is triggered, which may not happen until later in 2016. Most of the UK’s green policies and regulations are led directly or indirectly by EU legislation. 

‘Gaping holes’

Matthew Spencer, director of environmental think tank, Green Alliance, said: “Britain will now have to create new national laws and stronger public institutions to fill the gaping holes that will be left as we jettison strong EU environmental agreements.”

Dr Nina Skorupska, chief executive at the Renewable Energy Association (REA), warned that the result “raises serious questions for investor certainty, energy security and much needed investment in the UK energy infrastructure.”

Energy bills

One near-term possibility is that Brexit could have negative consequences on energy bills.

Richard Black, director at the Energy and Climate Intelligence Unit, said: “Leaving the EU is likely to put an upwards pressure on energy bills, partly due to the direct financial costs of Brexit and also the impact of reduced investor confidence.”

Phil Foster, managing director at Bolton-based energy price comparison firm, Love Energy Savings, said: “With the possibility of rising energy prices, small business owners should look to cut back wherever they can. This can include introducing some energy efficiency policies for your office, whether that’s greener LED lightbulbs, installing bigger windows for more natural light or adding movement detectors to turn off your lights automatically.”

Uncertainty is also expected to have an impact on waste management and eco-design activity, with the upcoming EU circular economy package a notable example of legislation that now may or may not be followed in the UK. 

UK leadership

However, Amber Rudd, energy and climate change secretary, has reassured the business community that while there may be challenges ahead, the government’s commitments to putting measures in place to tackle climate change will remain, including its role in implementing the global agreements reached in Paris in December 2015. 

Speaking to businesses at an event in London on 29 June, she said: “We made a clear commitment to acting on climate change. That will continue. The UK will not step back from that international leadership.

“As investors and businesses, you can be confident we remain committed to building a secure, affordable low carbon infrastructure fit for the 21st Century.”

‘Opportunities continue’

Some experts are also reassuring businesses that environmental initiatives should continue as normal for the foreseeable future, with disentanglement of EU and UK environmental laws likely to take several years.

David Symons, environmental director at global professional services firm, WSP Parson Brinckerhoff, said: “Many firms continue to be thinking ahead and embracing concepts such as energy efficiency, the circular economy and product innovation.

“These opportunities continue and business can continue both to drive forward on these areas and also promote low carbon, zero waste innovation as a way to grow and create jobs.”

Others strongly believe that Brexit could prove to be more beneficial for the environment. 

Michael Liebreich, founder of Bloomberg New Energy Finance, has argued that the most significant UK environmental initiatives were led by policymakers at home rather than in Brussels.

One of those initiatives, the Climate Change Act, is continuing to be held up by government, with a new legally-binding target to cut UK emissions by 57 per cent against 1990 levels by 2032 agreed by the government on 30 June.