Brexit referendum: an opportunity for EU energy policy reform?

Update, 06/30/2016: The unthinkable has become reality. Apparently not even the Leave campaigners believed that they would carry away victory in the referendum, confirming our suspicions that the Brexiters could not provide credible alternatives. On the first day after the referendum, leading lights of the Brexit campaign already evaded their responsibilities and withdrew central promises that misled millions of citizens.

In terms of energy policy, the effects on the EU and the UK still remain uncertain and major changes cannot be expected in the near future, since negotiating the Brexit will be time consuming and results difficult to predict. In fact, it is not even clear if the UK issues a declaration under Article 50 to leave the EU. It also remains unclear whether in case of leaving the UK would also leave the EU Energy Market, a step with potentially grave consequences in terms of energy prices and energy security.

It seems the Brexit referendum’s decision leaves no winners after all. Time, money and efforts that have to be spend on negotiating the UK leaving the EU are severely stalling the important and urgently needed EU reform as well as decisions that would accelerate an extensive expansion of renewable energies across all EU Member States in order to effectively tackle climate change.

Article posted 15/05/2016:

On June 23, British citizens are going to the polls to decide whether their country should leave or remain in the European Union (EU). As the ‘Remain’ and ‘Leave’ campaigns still lie neck to neck, the outcome is entirely uncertain, and the so-called “Brexit” is casting a shadow over the European Community. What is even more difficult to predict than the outcome of the referendum are the effects a Brexit would have on the EU and the UK itself. So far, no Member State has withdrawn from the EU, making a Brexit unprecedented, with highly uncertain consequences. Besides the grave economic insecurities, not only for the UK, but also the EU and the global economy, the EU would lose a strong partner in foreign policy. As a permanent member of the United Nations Security Council, Britain acts as a bridging influence between the EU and NATO. Alongside all that, it is clear that a Brexit would have an uncertain – and likely negative – effect on European and UK energy and climate policy.

British ambivalence in the climate-energy nexus

In the past, the EU and the UK have certainly had their differences over energy and climate policy and British Governments have at times acted rather selectively on the implementation of EU environmental directives. On the one hand, the UK was laggard in implementing the 2008 EU standards for air pollution, although it remained a huge problem with approximately 37,800 deaths being caused in 2012. On the other hand, the UK led the discussion on ambitious climate protection targets in the form of extensive carbon emission reductions and nationally adopted goals for a proactive approach to tackling climate change under Prime Minister Tony Blair. With the Climate Change Act of 2008, the UK was an EU-pioneer for adopting the first legally binding climate change targets in the world, stipulating a total reduction of greenhouse gas emissions of 80% by 2050, compared to 1990 levels.

Given this context, it seems rather paradoxical that Britain resisted EU interventions promoting the expansion of renewable energy across all Member States. The UK firmly opposed the EU Commission’s interference in determining the national energy mix in favour of renewables. That was clearly a step backwards, since shifting towards renewable energy is an inevitable component of an effective climate mitigation strategy that is capable of drastically reducing greenhouse gas emissions.

However, in terms of offshore wind energy production, the UK is still in the lead with a 46% share in the European offshore market. Although this represents only a fraction of total European renewable energy capacity, it still contributes to meeting Europe’s 2020 climate and energy targets of a 20% cut in greenhouse gas emissions, while increasing energy generation from renewables and improving energy efficiency by 20%. With regard to European energy consumption, the UK has contributed strongly to the principle of “unbundling”, describing the separation of energy network operator and energy producer. Through this regulation, European consumers have benefitted from decreasing energy prices due to increased competition in the EU energy market.

By losing the UK as a member state on the 23 of June, the EU would lose an influential ally in combatting climate change. At the same time, a Brexit could open opportunities for renewable energy expansion within the EU, without the UK slowing down or even blocking the process. Some suppose a “leave” decision could result in a more centralised regulation of the EU energy market and see an opportunity for Germany to undertake a new attempt to push for an EU-wide renewable energy expansion. Though, considering the recent developments in Germany concerning the lately proposed amendment of the German Renewable Energy Act, this seems rather unlikely.

Let us be honest: of course the EU is not perfect. Processes are slow and negotiations tough and national interests still dominate over a ‘common European good’. Over the years the UK has certainly done its bit to stall European processes by cherry picking EU benefits and putting its national interests at the fore. But on the flipside, we’ve all benefitted from British ambitions to curb climate change which have surely contributed to the development of the EU’s climate targets. Like most things in politics it’s a mixed bag with plenty of nuances.

Joint effort needed to push renewables and effective climate action across all EU Member States

To achieve a positive European future, characterised by a green and low-carbon economy, state sovereignty and national self-interests are going to have to recede. Purely national solutions are simply not going to be enough to solve complex environmental problems, such as climate change, pollution and biodiversity loss which often pay no heed to national borders. Notwithstanding that fact, some advocates of leaving the EU call on environmentalists to vote in favour of the Brexit, while the leading lights of the Brexit campaign seem to not care enough about the environment to develop their own solutions. The Leave campaign’s website has a conspicuous absence of environmental and climate policy, while their position on energy remains patchy and cryptic. They are simply not providing credible alternatives.

In this context, to vote Remain at the referendum on 23 of June becomes an opportunity to start shaping a positive plan for working together to reform the EU towards an effectively regulated energy market that supports a flourishing renewable energy sector, instead of withdrawing to an ineffective patchwork of national strategies.

Wednesday, June 15th, 2016

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