Following the outcome of the UK’s referendum in favour of leaving the European Union (EU), the Aldersgate Group argues that it is in the UK’s interest to continue to lead on environmental issues and grow the UK’s thriving low carbon economy.
Noting that environmental issues featured very little on both sides of the EU referendum campaign, the Aldersgate Group said that the government should continue its work to improve the state of the natural environment at home and ensure the UK economy remained competitive at a time where the global market for low-carbon goods and services is rapidly growing.
Nick Molho, Executive Director of the Aldersgate Group said: “Environmental and low carbon economy issues were largely overlooked during the EU referendum campaign. Yet, both within and outside the EU, the UK has often taken a leading position on tackling environmental issues such as climate change. Today, its low carbon and renewable energy economy has a turnover in excess of £46bn, employs over 238,000 full time workers directly and British businesses are leading exporters of clean technologies such as ultra-low emission cars.
“With serious environmental issues facing the world economy and with low carbon investment rapidly growing globally, it is in the UK’s economic and environmental interest to engage positively in international negotiations on climate change and other environmental issues and support the growth of its low carbon economy through national policy. Showing its commitment to the Climate Change Act by adopting the fifth carbon budget and a robust carbon plan to deliver it and making rapid progress on a 25 year plan to improve the state of the UK’s natural environment must now be essential priorities for the government.”
Reacting to the publication today of the Environmental Audit Committee’s report, EU and UK Environmental Policy, the Aldersgate Group said that whilst improvements needed to be made, EU environmental policy was on the whole positive for UK businesses.
Nick Molho, Executive Director of the Aldersgate Group said: “EU environmental policy is important for UK businesses in that it has helped introduce similar environmental rules that apply to all businesses active in the Single Market. This has created more of a level playing field for UK businesses and reduced the cost and complexity associated with complying with different regulations in different Member States.
The EU’s common environmental and product standards have also sent clear market signals to businesses, which have helped both create market opportunities for businesses across the Single Market and improve environmental sustainability in certain markets such as the energy efficiency of consumer products and the sourcing of timber.”
Nick Molho added: “EU environmental policy could be improved in a number of areas such as by improving the common implementation of rules in different Member States, removing inconsistencies in the EU’s waste legislation and ensuring that new policies are developed in a way that better takes into account the EU’s overall environmental objectives. However, the UK and its businesses are likely to be better placed to make these improvements and influence the EU’s future environmental priorities if the UK remains part of the EU.”
Reacting to Secretary of State Amber Rudd’s speech later today on the importance of the EU internal energy market, Dame Fiona Woolf DBE, Energy Lawyer and Partner with CMS Cameron McKenna LLP and Honorary President of the Aldersgate Group said:
“Secretary of State Amber Rudd is right to highlight the contribution that the EU’s internal energy market makes towards the affordability and security of the UK’s electricity system. Co-operation within the EU isn’t just important for energy security; it is also important to tackle environmental issues such as climate change cost-effectively. EU energy and climate policy has an important role to play in helping the UK build a low carbon electricity system in a way that is secure and cost-effective, such as through building more links like the Britned interconnector between the EU’s national power grids.”
Reacting to the Prime Minister’s announcement today on an EU referendum to take place on 23 June, the Aldersgate Group issued the following statement on the importance of EU environmental legislation for UK businesses.
High quality environmental legislation is good for the economy, for business and for citizens. EU environmental legislation has provided to date important benefits for UK businesses and the environment. Many environmental issues such as climate change and air quality are transnational in nature and other environmental issues, whilst not always or necessarily transboundary (e.g. water pollution), are common to many member states.
Whilst some improvements must be made, EU legislation has helped tackle some of these challenges in a more environmentally and economically effective manner by pooling the resources of different member states to address a particular environmental concern and driving environmental and business innovation across the EU. Membership of the EU has also strengthened UK diplomatic efforts in international negotiations such as recently at the climate change summit in Paris.
The UK has at times been a major player in the improvement of EU environmental legislation such as on emissions trading and industrial pollution; however, EU legislation has often resulted in standards that have resulted in a higher degree of environmental protection than would have otherwise applied in the UK. For instance, EU legislation has been the principal driver of rising UK standards on air and water pollution with major health benefits - the Bathing Water Directive has driven real improvements in beach water quality and benefitted tourism. The Environment Agency has stated that the Landfill Directive has changed for the better the way that waste is managed in the UK. The Birds and Habitats Directives have led to substantial improvements in the standards of protection for habitats and species in the UK.
In addition to addressing environmental issues cost-effectively, EU legislation has resulted in the introduction of common environmental and product standards which have been beneficial to UK businesses by providing more of a level playing field across different member states and providing clear market signals on the standards that products and services being developed on the Single Market need to meet. These standards have also often resulted in cost reductions for consumers, for instance DECC predicts that tighter efficiency standards for household energy appliances are expected to deliver an average annual saving of around £158 per household in 2020 (including around £25 per household through more efficient TVs and set-top boxes, £25 through more efficient consumer electronics and around £20 through more efficient lighting).
There are undoubtedly areas of European environmental legislation that could be improved and made more effective, in particular through more consistent implementation across member states and a greater focus on looking at environmental issues as a whole when developing policy to avoid unintended impacts. This could help avoid instances where some areas of EU legislation undermine its environmental objectives such as the European Court of Justice ruling last June that the UK’s reduced 5% VAT rate on energy-saving products was in breach of EU laws. However, the UK is most likely to have some influence in supporting these improvements and ensuring that the interests of its businesses are recognised and promoted if it continues to be part of the EU.
Should the UK leave the EU, the government must ensure that the UK continues to abide by environmental standards of at least a similar threshold to those contained in existing European legislation and applied across the Single Market. This is particularly the case in key areas such as product efficiency, fuel efficiency, industrial pollution and climate change. However, no clarity has been provided to date as to how this would be done and how the future development of these standards and legislation could still be influenced by the UK in the event that it was no longer part of the EU.
The Aldersgate Group welcomed the EU Commission’s intent to drive much greater resource efficiency across European economies with the publication of its Circular Economy Package today. However, whilst the package touches on most of the right issues, it now needs to be much clearer in terms of how it will promote a significant increase in the reuse of secondary materials that is needed to deliver an EU economy that is competitive and fit for the 21st century.
Nick Molho, Executive Director of the Aldersgate Group said: “The Commission should be given credit for having reintroduced a new circular economy package today, having made it a priority across departments and showing a desire to drive much greater investment in the EU’s circular economy. All the businesses we work with are already innovating to find new ways to be more resource efficient and competitive but a strong circular economy package could help them go much further by removing barriers and introducing smart incentives.
The EU Commission’s own research found that greater resource efficiency could save EU businesses around €630bn a year by 2030 and just yesterday, Green Alliance found that the move to a circular economy could also help deliver net employment benefits across the EU. The business case for a strong circular economy package is compelling and goes far beyond the important environmental benefits.”
The Aldersgate Group, which is working closely with other UK and EU organisations as part of the Alliance for Circular Economy Solutions, stressed however that much more needed to be done to make the package a success. Whilst today’s package touches on the right issues and rightly focuses on increasing resource efficiency across the whole product lifecycle, a lot more detail was needed in order to boost the use of secondary materials across the economy. In particular, using the Commission Ecodesign working plan to develop standards that would facilitate the disassembly and repairability of products beyond just electronics will be important as well as a clear timetable for introducing quality standards to address consumer confidence in secondary goods.
Nick Molho added: “The package today provides a decent starting point but it is not yet detailed enough to give the resource efficiency makeover the EU economy needs. The package needs a clear overall resource efficiency goal, clear standards to facilitate material reuse across all key products, quality standards to boost consumer confidence in secondary materials and a clear strategy to favour those businesses that are more resource efficient through public procurement policy.
The Aldersgate Group and its business members stand ready to work with the EU Commission and Parliament to build on today’s positive announcements and thrash out the important detail that will determine whether or not the package will be a success.”
The Aldersgate Group welcomed the vision set out in the EU Commission’s Road to Paris today but urged the EU Council to ensure that its final proposals on emission cuts for 2030 were in line with the “at least 40% domestic target” previously announced. This was key to build an increasingly positive momentum ahead of the Paris climate summit and to help grow the EU’s market share in the low-carbon sector.
Nick Molho, Executive Director of the Aldersgate Group, said: “It is often forgotten that Europe’s economic growth, competitive advantage and the health of its job market will be enhanced or undermined according to our response to climate change. Action on climate change isn’t just about preventing significant environmental and economic damage; it’s also about benefiting from the huge commercial opportunities that come with the shift to a low-carbon economy.”
Mr Molho added: “It is critical that the final emission cuts put forward by the EU Council in the coming weeks are in line with its previous decision to cut emissions domestically by at least 40% by 2030. The EU should also make clear at the outset that it is ready, if appropriate, to increase its emission targets in the event of a successful agreement being reached in Paris.”
Ahead of the European Commission's announcement in the European Parliament on 17 December, the Aldersgate Group urged the European Commission to maintain the circular economy package in its work programme for 2015.
Nick Molho, Executive Director of the Aldersgate Group, said: "Moving towards a circular economy with much higher degrees of recycling and remanufacturing is an important part of making the European economy more efficient, competitive as well as environmentally sustainable. Ensuring that EU policy goals are delivered through "better regulation" is a good aspiration, but the Commission should go about this by developing smart regulations to meet these goals as opposed to simply abandoning crucially important areas of policy such as the circular economy package".
See our letter in the Telegraph.
Reacting to the European Council announcement, Nick Molho, Executive Director at the Aldersgate Group said: “European leaders have made the right decision to commit to a greenhouse gas emission reduction target of at least 40% by 2030, which keeps open the option to increase the EU’s commitment to a higher and more adequate target in the event of successful climate negotiations in Paris next year. Beyond the obvious environmental benefits, recent research shows that a strong greenhouse gas target is in the interest of the UK economy and we therefore urge the UK Government to push for an ambitious international deal on climate change in 2015.”
Nick Molho added: "It is on the other hand disappointing that the package contains insufficient ambition on energy efficiency, one of the cheapest ways of cutting greenhouse gas emissions, protecting consumers against rising energy bills and improving energy security. We urge the next Government to make energy efficiency a national infrastructure priority in the UK to ensure its environmental, economic and energy security benefits can be maximised."
In the run-up to the crucial European Council on 23rd-24th October, the Aldersgate Group has signed a letter to the Heads of State and Government of the European Union, calling for "a robust 2030 energy and climate policy framework and energy security strategy," that can meet Europe's long-term climate objectives and deliver a global climate agreement in next year's negotiations in Paris.
The letter, signed by 57 companies, funds and associations, asserts that an ambitious agreement would “contribute towards a modern, resource-effecient and low carbon growth as a central driver for Europe’s economic recovery and competitiveness agenda”. Signatories include the Aldersgate Group members Philips, Kingfisher, and Interface.
The Prime Minister has supported the call from The Prince of Wales’s Corporate Leaders Group, Aldersgate Group and E3G for ambitious initiatives on green growth as the UK implements commitments from the EU-China summit.
The organisations sent a letter in November 2013 setting out the critical opportunity to align European and Chinese interests on the green economy, and formulate a new approach to the EU-China relationship which maximises mutual opportunities and better manages trade tensions.
The PM recognised their incredibly useful work with Government departments to raise the issues and opportunities represented by liberalisation of green sectors and noted that all comments outlined in the letter were taken on board in preparation for the EU-China Summit. He advised that these are reflected in the resulting EU-China 2020 Strategic Agenda for Co-operation.
The Aldersgate Group have written to both David Cameron and José Manuel Barroso, President of the European Commission, to urge the EU to propose an ambitious set of concrete initiatives on green growth at the EU-China Summit.
In collaboration with E3G and EU CLG, the joint letters state that the Summit represents a critical opportunity to align European and Chinese interests on the green economy, and formulate a new approach to the EU-China relationship which maximises mutual opportunities and better manages trade tensions.
Further integration of European and Chinese markets would deliver immediate and large business opportunities for European firms. China will spend $8 trillion on urbanisation and over $1 trillion on power systems to 2020. The majority of this investment will need to be clean, efficient and low carbon. The letter sets out four priorities to help create a "Green Growth Area" between the EU and China.
The Aldersgate Group has signed a letter to the President of the European Commission, José Manuel Barosso, calling for draft legislation for a structural reform of the EU Emissions Trading Scheme (EU ETS) to be brought forward by the end of the year. The letter was signed by 53 businesses, investors and associations, who believe that a clear carbon price signal and long-term visibility are essential to drive investment and growth.
The European Commission is supporting a new Aldersgate Group (AG) project on the circular economy to demonstrate how businesses and their supply chains can implement Resource Efficient Business Models. This follows the publication of the AG's report, Resilience in the Round, that was published last year.
The co-funding increases the AG's capacity to drive change in four key markets: electrical and electronic products, clothing, furniture and construction products (that are collectively worth more than 350 billion Euros per year across the EU). The project will be in partnership with WRAP, ESKTN, The University of Northampton and Rijkswaterstaat (RWS) and has a time scale of 3.5 years.
The Aldersgate Group has warmly welcomed a letter from 12 European Government Ministers which supports the EU ETS back-loading proposals and calls on the European Commission to bring forward structural reform proposals by the end of the year. In a joint statement, the Aldersgate Group also called on the Commission and Ministers to work together for early agreement on an EU 2030 Climate and Energy Framework.
Andrew Raingold, Executive Director of the Aldersgate Group, said: "Businesses are concerned that the EU ETS is not providing the right price signals to stimulate investment and growth in low carbon goods and services. Supply of carbon permits continue to dwarf demand which is threatening the viability of the European carbon market. Business leaders are calling for an urgent short-term rescue package and structural reform moving forward."
Andrew Raingold, Executive Director from the Aldersgate Group, told Parliament Magazine's Brussels Briefing Live conference that the UK's 2020 renewable energy target is challenging but achievable.
He said: "analysis by the AEA consultancy and the Government's independent advisors demonstrate that the UK's target of generating 15% of its energy from renewable sources by 2020 is achievable. However, there is little room for complacency. Policy uncertainty and mixed messages from Government means that the UK is not keeping up with faster growing international markets in the race for global investment."
The Aldersgate Group (AG) has written to all UK-based MEPs to urge them not to undermine the Government’s commitment to increase the EU emissions reduction target to 30% by 2020. A crucial vote in the European Parliament is expected at lunchtime tomorrow.
Andrew Raingold, Executive Director of the Aldersgate Group, said: “A 30% carbon reduction target would provide greater certainty for businesses to invest in tomorrow’s technologies, boosting innovation and creating jobs. This is vital if the EU is going to be at the forefront of a green industrial revolution and is not the enemy of competitiveness, as some have claimed. In fact, many of Britain’s biggest businesses are urging MEPs not to undermine the Prime Minister’s commitment to a 30% carbon reduction target.”