BREXIT. A CHANGE IN THE CLIMATE? FIRST REACTIONS.

Meanwhile the petition for a second referendum is gathering signatures at the rate of 1000 per minute. (8.40 am today). At this rate it seems likely to pass the 3 million mark before midday.

So what are the implications of the referendum vote for climate and energy policy issues? These are not at the forefront for the moment, and no doubt the Leave politicians, many of whom have disappeared from public view and seem to be largely maintaining radio silence at the moment, will have some difficult questions to answer that relate more closely to their campaign promises and claims. It’s perhaps worth rehearsing a few of these, with possible implications for the energy sector.

As earlier comments in this blog have suggested, EU membership has been at most a limited constraint on UK policy. We have criticised the weakness of the EU’s flagship policy, the emissions trading scheme, which has perhaps led to a greater reliance on individual national policies (across Europe), not necessarily consistent with each other or with European targets, than would have been ideal.

There are specific areas which may be profoundly affected.  The most obvious is British/ French collaboration on Hinckley Point nuclear station, which must now be facing almost insuperable political difficulties. The other area that could matter greatly to us is collaboration over interconnectors, where the EU was developing a very useful role.

The biggest issues however lie in the broader political arena, around support for climate policies in which the UK has been a leader. Most of the  leading figures in the campaign to leave the EU are climate policy sceptics, including former Tory chancellor, Lord Lawson, former environment secretary, Owen Paterson, Johnson, Gove, Redwood and many others.

Even though our politicians will be pre-occupied with fire-fighting, an early challenge in the new political landscape will arrive next week, when ministers are due to approve new greenhouse gas reduction targets under the UK’s Climate Change Act.  Advice from the Committee on Climate Change is that the UK should aim for a 57 per cent cut in emissions by the early 2030s but it is possible that the climate ideologues, emboldened by Thursday’s vote, will try to reject this.

However with millions of voters already feeling they have been the victims of a fraudulent campaign, and a petition for a second referendum already approaching 3 million signatures, my guess is that this will not be the time or the issue where the embattled Brexiters choose to stand against current policy.

Looking slightly further ahead, a critical question will be the UK’s commitment to the Paris agreement. As I have suggested before, this is an issue that will almost certainly become closely intertwined with trade, especially in relation to heavy industry.  In the steel industry context, I noted earlier that a Brexit would almost certainly entail significant devaluation of sterling, possibly to the short term benefit of that industry.  That has now happened with remarkable speed, although with Brexit I fear the prospects for steel and many other industries are looking much less attractive.

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 Small questions at random for future Brexit ministers.

·         How is the £350 million a week Brexit dividend to be spent? How much of this can now be put to restoring the cancelled CCS funding is one question that might particularly interest those concerned with climate policy? We understand from the campaign that in general the commitments to environment spending will be maintained.

·         Does the Brexit bonus of cutting EU regulation extend to disavowing the Basel 3 recommendations? This is the implication of Leave campaign’s statements to the effect that this the second largest “cost” of red tape. Since these were essentially the reserve ratio requirements to limit post-crash activities of the banks, would this impact on UK credit standing, and on financing of energy projects?