What Would Brexit Mean for UK Renewables?

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On the 23rd of June, scarcely a little more than 3 months from now, the United Kingdom will hold a referendum to decide whether it stays in the European Union going forward. The issue is complex, and both sides have put forth dozens of reasons to support their positions, but what we’re especially interested in is what Brexit would mean for Renewable Energy and Climate Policy in the UK.

Europe old map

So far, the groups and individuals with the most regressive ideas on climate and renewable energy have also been those that are most in favour of exiting the EU, while environmental groups and supporters of renewables have for the most part favoured the ‘stay’ camp. This is likely because belief in anthropogenic climate change usually plots the same line on the ideological spectrum as left-right postures on immigration, multiculturalism, and euroskepticism: older and more conservative individuals tend to believe less in climate change and are therefore less likely to want to take urgent action against it via renewable energy development, while younger and more politically liberal individuals hold the opposite stance. It is worth pointing out that overall, most of the population does believe in anthropogenic climate change. Where we see more variation is in how urgent people believe the problem to be and how much they prioritize addressing it, with there being a very clear divide on this issue between centre and left of centre people and those on the opposite side of the ideological spectrum. One of the concerns this elicits is that were the UK to vote ‘Leave’ in the upcoming referendum, the current government could feel beholden to interests groups that are broadly right wing and for whom Climate Change and Renewable Energy are low on the list of priorities, favouring economic development over responsible environmental policies.

Going beyond the political implications of Britain leaving the EU there are other practical issues that need to be considered, such as access to EU funding and special subsidies for climate-related projects.

The European Investment Bank (EIB) has invested 7.2 billion euros (£5.59 billion) into renewable energy since 2007. The UK has been the biggest beneficiary, receiving 24% of these funds, significantly more than any other country. However if we were to leave the EU it is unclear if we could continue to receive funding from the EIB for climate related projects under similar conditions to now. Non-EU countries have received only 12% of the funds that have been disbursed so far, so there is the possibility that the UK could lose access to potentially billions of pounds for climate and renewable projects. What is clear is that EU members enjoy certain privileges and higher priority in access to funding over non-members, and they wield significantly more clout when it comes to affecting EIB policy.

The EU’s 20% renewables goal by 2020 is by now well known to everyone, but if the UK voted to leave opponents of brexit are worried that the motivation to continue decarbonisation would be weakened. The 20% quota is for the EU as a whole, and in Britain the target figure is currently set at a more modest 15%, but due to the government’s quasi-ideological opposition to renewable energy and its latest steps attacking UK Renewables it is widely believed that the UK may very well miss that goal. While the goal itself would still be legally binding were the UK the leave, as it was established under the Climate Change Act of 2008 and not by EU policy, the hypothetical lack of pressure to contribute to community-wide renewable energy goals might further undermine an already shaky commitment to renewables. Furthermore, the UK would presumably lose access to the EU’s eighth Framework Programme that funds innovation and research, Horizon 2020, which runs until 2020 and has a total budget of €70 billion. A significant portion of these funds are dedicated to energy innovation and the UK is one of the larger recipients. Were we to leave many academic institutions and companies that currently benefit from the programme could see their funding evaporate. This would have a very negative impact on research and development of new clean energy technologies.

Another concern that brexit elicits is the possibility of diminished influence on international policy agreements and regulations. Even if the UK votes to leave in June, it is likely that it will want to still partake in certain international agreements and organisations such as the European Union’s Emissions Trading System (ETS). Some non-EU states like Norway and Iceland are already members, while Switzerland is currently negotiating to link its national system to the EU’s. If the UK wanted to remain part of this scheme after exiting it could do so, but its ability to influence policy would be greatly diminished and it would likely be subject to the decisions of the other EU-member states as it would no longer have voting power in the EU parliament.

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