Breaking up is hard to do: The risk to the green economy from Brexit dwarfs any benefits on offer

James Murray
Breaking up is hard to do: The risk to the green economy from Brexit dwarfs any benefits on offer

Leaving the EU could deliver some gains for green businesses, but they are far outweighed by the potential losses and certain disruption

One week to go.

I've never been a massive fan of agony aunts, but years ago I stumbled across a column that despite its platitudinous nature has stayed with me and is now routinely trotted out on the rare occasions a friend asks for relationship advice. A reader was asking whether they should leave their partner and the newspaper's font of wisdom noted before making any momentous decision it was important to consider not just what you'd gain by leaving - freedom, excitement, a change of scene - but also what you'd lose.

This, in essence, is what we all have to remember as we weigh which way to vote in the upcoming European referendum: it is not just what you gain, it is what you lose.

Anyone who has hitched themselves to a side in this increasingly vitriolic, binary, and at times downright squalid referendum debate may find this hard to believe, but there are pros and cons in the arguments for both leave and remain. The question is which side, on balance, offers the greater benefits when weighed against the inevitable risks.

Whisper it, but as the campaign has gone on the green arguments for leaving the EU have got stronger. Not the arguments put forward by the official Leave campaign, you understand; they remain as vague, inconsistent, and reckless as their scurrilous claims about immigration and the economy, where Leave spokespeople have implied we will have both more and less inward migration and have promised to spend money saved from leaving the EU many times over.

George Eustice's calls for a more experimental approach to environmental protection may have some merits, but they are tempered by Owen Paterson's demand for the precautionary principle to be ditched and key environmental directives torched (not to mention Nigel Farage's vision for an over-fishing free-for-all). The precautionary principle needs constant policing to ensure new innovations are not hamstrung, but do you really want people who think climate change or over-fishing are not a problem doing the policing?

No, the green arguments for 'Brexit' have got better thanks to contributions from other commentators.

Bloomberg New Energy Finance's (BNEF) Michael Liebreich has offered a compelling right-wing environmental vision for leaving the EU, arguing the bloc's flawed approach to renewables deployment and clean tech innovation coupled with mis-steps on diesel emissions and carbon trading warrant a Leave vote. It is a vote, he argues, that would allow the UK to secure the sovereignty needed to foster real clean tech innovation and build on already successful national environmental policies, such as the promised coal phase out and carbon floor price.

From the opposite end of the political spectrum, the Green Party's Baroness Jenny Jones has reached a similar conclusion, lamenting the EU's position as an unreformable "super-sized top-down dogmatic project of endless industrial development and growth". Other influential left-wing thinkers such as Paul Mason and George Monbiot may have concluded leaving brings with it too big a risk at this point, but they too have highlighted how Brussels' corporatist agenda, the looming TTIP-fuelled watering down of environmental protections, and the EU's inherent opposition to national green industrial policies and anti-austerity infrastructure investment all undermine the Remain pitch.

Meanwhile, as the polls show the Leave camp edging ahead (even as the bookies intriguingly maintain Remain are favourites) there is a growing sense a vote to Leave would be damaging, but not necessarily an 'environmental doomsday', for the green economy. As energy and climate change select committee chair Angus MacNeil notes today, there may be some 'swivel-eyeds' within the Vote Leave campaign who want to hack away at climate policy, but they are not the government, and even if they make it to Number 10 they will struggle to secure majority support for the repeal of the Climate Change Act. It is a 'don't panic' perspective endorsed this week by analysts at S&P Global.

Inevitable decarbonisation

Any attempt to halt the green economy in the long term resembles pushing water uphill; the climate risks are too self-evident, the economics of clean technologies too compelling, and the market for green businesses too global for a small cabal of climate sceptics to represent anything other than a short-lived road-block on the journey towards a decarbonised economy.

The EU is anything but perfect. To continue the relationship metaphor Brussels dips into our bank account, stops us trying new things, blocks us from playing with other people, and criticises our cooking. Or, to translate, the EU requires a net financial contribution, stops policies such as lower VAT on solar panels, makes clean tech trade deals with emerging markets harder to deliver, and criticises our cooking.

And yet, for the vast majority of people with any connection to the green economy, the arguments for a green Brexit fail to convince.

In part this is because most of the environmental reasons cited for leaving - excessive red-tape, weak support for innovation, restrictive VAT rules, a faltering emissions trading scheme, TTIP over-reach - are as much reasons for reform as reasons to leave. But also because even if you think the EU will always struggle to drive through green reforms, voting to Brexit is not just about what you gain, it is about what you lose. We might gain from an end to Brussels nagging and a few months of excitement on trade deal Tinder, but we would lose security, stability, and the comfort and strength that comes from shared endeavour.

From an environmental and an economic perspective the list of things the UK stands to lose from Brexit is overwhelming.

First there is the inevitable short to medium term economic hit that would be triggered by a Leave vote. Conservative MPs had fun yesterday, suddenly converting to the cause of anti-austerity to attack the Chancellor's warning that if the economy tanks in the way most independent experts expect he would be forced to introduce a new 'austerity on steroids' budget. But if a Brexit induced recession results - and it is highly likely - whoever is incumbent in Number 11 by the end of the summer would have to respond somehow. If anyone thinks clean tech and environmental funding would remain a priority in a world where NHS and pension budgets are being cut then they are deluding themselves.

Trade deal uncertainty

Then there is the huge uncertainty that would come from unpicking our relationship with the EU. As MacNeil argued today we have seen the damage a year of policy uncertainty has done to the energy industry, but such uncertainty would pale into insignificance compared to the confusion that comes with not knowing what our relationship will be with our biggest trading partner.

No one knows what will happen in the event of a Leave vote. Parliament and common sense may re-assert itself and some kind of Norway-style deal that maintains membership of the economic area may be thrashed out. This would minimise disruption to businesses, but as the Prime Minister warned it would also mean the UK exporting electric vehicles to the continent with no say over the rules and policies that govern this exciting new market.

Such a deal would almost certainly require the continuation of Freedom of Movement, the ending of which the Leave Campaign has shamelessly and irresponsibly made its central pitch to the electorate (as others have noted when a post-Brexit government inevitably fails to deliver the miraculous salve it has promised it will fuel a breakdown in trust in politics that will make the expenses scandal look like an era of Athenian ideals). Consequently, an even more disruptive period could yet materialise during which the UK is forced to broker countless trade deals - just at a time when Trumpian figures worldwide are preaching nationalist protectionism. Such a scenario threatens to badly dent the prospects of export-focused clean tech firms.

In addition, leaving both the EU and the economic area would threaten the effective environmental policies, legislation and investment that comes from Brussels, and which thanks to a staunchly anti-EU media landscape we hear very little about.

The UK has pioneered its own effective environmental legislation over the decades, but in recent years it has been the EU that has driven the policies and rules that have helped clean up our beaches and rivers, improved our air quality, driven the development of more efficient appliances and vehicles, and led to a surge in recycling. Moreover, the UK remains a net beneficiary of EU infrastructure and science spending, further strengthening its clean tech base.

Of course, upon leaving the EU the UK could retain and improve these various regulations and projects. The problem is that to do so would require a reversal of recent trends. The UK is currently in breach of EU air pollution rules, off track to meet its renewables targets, and unlikely to comply with recycling goals. In the corridors of Brussels UK diplomats have repeatedly lobbied against the strengthening of fuel efficiency, air quality, and waste rules. The idea that freed from Brussels the UK would improve rather than weaken these various policy areas requires a remarkable leap of faith, as does the idea the government would fund an expansion of Whitehall to take on the extra responsibilities that would be passed back from Brussels.

In the longer term it also takes a Teflon belief in British exceptionalism to think the UK's international influence would not be eroded by leaving the world's biggest trading bloc. At a time when the challenges we face, from climate change to terrorism to biodiversity loss, are increasingly international in their nature it seems strange to step away from a body that has done so much over decades to pioneer - not always perfectly, but always with the goal of peace and progress - the concept of international co-operation. The Paris Agreement was made possible by the US and China, but it was the EU that blazed the trail for this historic deal, keeping the show on the road following the failure of the Copenhagen talks and upping ambition in the midst of a financial crisis when other countries were threatening to back-slide on climate action. David Cameron was mocked for even hinting at the prospect of war and instability being unleashed by a Brexit vote, but in rejecting the idea of pursuing progressive goals and enlightenment values through close international ties we risk losing something very precious.

Climate sceptic revival?

Finally, there is one other thing we risk losing by voting to leave: a government that is committed to tackling climate change and regards the green sector as an important and beneficial part of the economy.

Some people think the emergence of an avowedly anti-environmental government is highly unlikely, and such a changing of the guard is anything but inevitable; Cameron could cling on in the event of a Brexit vote, even if he goes Tory modernisers could mount a counter-putsch against the ebullient right of the party, Jeremy Corbyn could surprise everyone at a snap election. But be in no doubt, Brexit would be a stunning rejection of political centrists everywhere and a major coup for that particular brand of neo-liberal, right wing Euroscepticism that so often morphs into neo-con, right wing climate scepticism.

The current government and its Conservative-led predecessor may have angered many within the green economy with a host of policy missteps, but they have remained fully supportive of the Climate Change Act and have quietly engineered a period of record clean tech investment and sharp emissions reductions. Those green groups who painted the current Conservative leadership as environmental vandals could end up missing them when they are gone.

Many within the Leave camp have made little or no attempt to conceal the fact phase two of this campaign is to deliver a government in the mould of Australia's Tony Abbott or Canada's Stephen Harper - robustly right wing, populist, and anti-regulation with pollutocracy climate scepticism baked in as standard. It is not difficult to envisage a scenario where post-referendum Cameron is forced out and a more avowedly neoliberal Conservative government sweeps to power on the back of Boris' bravado and an immigration fear-fuelled punishment beating for Labour in its heartlands reminiscent of its post-Scottish referendum shellacking. We could be a few short months away from a government that makes Cameron and Osborne look like Attlee and Bevan.

The personalities involved in the Leave camp and their past statements on the environment suggest such a government would be a disaster for green issues. Their previously stated goals include the torching of environmental regulations, an extended life for coal plants, a fracking bonanza, the repeal of climate legislation, and the justification of everything with a downplaying of climate risks and some miniscule green fig-leaf funding for small nuclear reactors or whatever next generation clean technology is currently flavour of the month.

None of this is inevitable, the vast majority of parliamentarians and business leaders fully support the urgent need for climate action, as do most of the public. But the political shake up that would ensue post-Brexit makes such a scenario more, not less likely. Stranger and more regressive things have happened, especially in such a febrile political atmosphere.

The UK's leading climate and euro sceptics have more in common than a shared address. They also share a reckless disregard for basic principles of risk management and evidence-based decision making, a Maoist belief in the power of creative destruction, and an unshakeable confidence everything will work out fine in the end. They don't even try to hide the fact leaving would be a massive punt, they just think it is a risk worth taking and the inevitable fall out, both in terms of pounds and pence and trust in politics, is a price worth paying. It is staggering that such recklessness could be about to be rewarded.

The UK green economy would battle on outside the EU - the fundamentals are still good, people will still need energy and transport and other infrastructure, climate change risks and compelling clean tech economics will mean green technology and business models will eventually come to dominate. But the risks of leaving far outweigh any potential upsides of Brexit. To vote to leave would be an act of economic, and green economic, sabotage. It's not just what you gain, it's what you lose.

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