The Future of Environmental Regulation

“Climate change action is by now unstoppable” – Christina Figueres

The UK’s decision to leave the EU last week has been met with a great deal of uncertainty from the environmental community. This is unsurprising considering over 80% of environmental regulation within the UK originates from the EU. A webinar on 28 June by the Institute of Environmental Management & Assessment (IEMA) following the result reaffirmed this notion of uncertainty stating that political agendas and the economy are likely to take precedence over environmental regulation.

Although, the sentiments of Ms. Figueres are not wrong. Momentum continues to grow in all aspects of society to bring about better environmental standards. On 30 June, Amber Rudd  confirmed the fifth carbon budget on the advice of Committee on Climate Change, which commits to reduce greenhouse gas emissions by 57% from 1990 levels.  The decision, which builds upon the 2008 Climate Change act, assures the public that an internationally unified cause can, in some cases, transcend the intermittence of political instability. International agreements, in particular COP21, provides a framework for countries to work towards in order to maintain the increase in global temperatures to well below 2°C. In regard to the built environment, which contributes around a third of global emissions, roughly half of the national climate plans presented specifically address the sector.

As environmental incidents continue to exacerbate, the World Economic Forum predicts that negligence of climate change will impose the highest impact risk to countries in the future. These associated risks have, as of Wednesday, begun to be assessed by Moody’s, a financial ratings agency. The agency uses the nationally determined contributions agreed to in Paris, which set out a pathway to a 2.7°C future, as a baseline, and assess four risk aspects that may impact each countries’ contribution. This 2.7°C pathway is what has been currently set out by each countries’ Nationally Determined Contributions (NDCs) rather than the overarching agreement to keep global temperatures well below 2°C. This methodology allows Moody’s to assess how each country is performing in relation to its own commitments in Paris.

A key component to the Paris Agreement determined that the private sector would also have a pivotal role to play in minimising the increase in emissions. A number of companies, such as Land Securities and Kellogg’s, have come to adopt science-based targets. These targets are created to be aligned with the required emissions pathways to retaining global temperatures below 2°C. Whilst there is a lack of regulatory drivers which enforce these targets, the plethora of continually improving environmental assessments, such as CDP and GRESB, offer mechanisms to assist the private sector in complying with the Paris Agreement.

These external pressures guarantee that action on climate change will continue to develop, despite the UK’s dissociation from the European Union. Whilst this is commendable, areas of uncertainty persist for environmentalists. In particular, as alluded to by the IEMA webinar, those policies that are in development or recently produced are at greatest risk. The Circular Economy directive is one such of these policies. Taking into account the UK’s current recycling rate of 44.8%, this is one such directive that has the potential to make a great deal of difference. It is as of yet unclear whether the UK has the motivation or the resources to replicate this progressive directive following the political divide.  Air quality is another environmental issue that may be at risk, especially with the UK’s poor history of complying to EU regulations. The media attention given to this issue towards the beginning of the year may be its saving grace.

It will be a number of years before any of these changes are made certain. Although, as much as there is the concern for lost environmental regulation, the UK also possesses the unique opportunity to rewrite the regulation in a way that is progressive and better fits the landscape of our society.