“There is much that still needs to be resolved” surrounding the UK’s climate and energy policies following leaving the European Union.
This is according to a new policy brief from the UK Energy Research Centre (UKERC) analysing the “undeniably important impact” of Brexit on the UK meeting its net zero targets
When it comes to the UK emissions trading scheme (ETS), the UKERC highlighted the uncertainty over the UK’s carbon price with the UK ETS beginning formal operation on 1 January but a carbon price not being set until May, when prices reached £50 per tonne.
Alongside this, the government stated in December’s energy white paper that the UK ETS would be “the world’s first net zero emissions trading scheme” and that it would “consult in due course on how to align the cap with an appropriate net zero trajectory”, which the UKERC said would require the expansion of the scheme to cover all sections of the economy.
It has subsequently been announced that the UK ETS will not be tightened to align with net zero until 2023, if possible, and no later than 2024.
Additionally, having left the Internal Energy Market, the UK has also left the European institutions that oversee the functioning of the EU’s energy market, therefore – as the UKERC described it – going from rule maker to rule taker. Examples include the UK’s transmission system operators, which will leave both the gas and electricity European Networks of Transmission System Operators, and Ofgem, which will leave the Agency for the Cooperation of Energy Regulators and the Council of European Energy Regulators.
As a result, relevant government departments and organisations will need to spend considerable time and effort trying to influence future EU choices that affect them, the UKERC said.
Alongside this, the diverting of UK civil service resource was highlighted, as it has had to dedicate much of its capacity to Brexit. The UKERC warned that there may be opportunity costs of doing so during an important time for climate change.
The energy and ETS provisions of the Trade & Cooperation Agreement indicate that negotiations about how to set up replacement regimes and rules will be ongoing for some years to come, according to the UKERC, which suggested that the UK therefore needs to recognise this and ensure that there is sufficient civil service capacity in place to concentrate on how to meet carbon targets whilst maintaining system resilience and affordable energy prices.
“While it should be recognised that climate change issues have been given priority in the overall agreement, when it comes to how this cooperation will work in practice there is much that still needs to be resolved, as there is in many other sectors,” the policy brief concludes.