Life after Brexit: the UK economy needs a strong environmental watchdog

The limitations of the UK government’s recent consultation on environmental governance after Brexit show that the misperception that regulations are bad for growth still stands in the way of good environmental policymaking, argues Nick Molho, Executive Director of the Aldersgate Group.

The UK’s upcoming departure from the EU would, in the absence of government intervention, mean that current legal principles that form the bedrock of European environmental law (such as the “polluter pays” or precautionary principles) and the mechanisms used to ensure compliance with that law would no longer apply. To address this regulatory gap, the UK government recently opened a consultation on the design of a new Environmental Principles and Governance Bill to be published later this year.

A new bill to protect the environment after Brexit

On the face of it, this is a positive development and has been the result of considerable work from the Department of Environment, Food and Rural Affairs (Defra). The bill will incorporate key environmental principles into UK legislation and introduce a new independent and well-resourced body to “hold the government to account on the environment”. In principle, this body would oversee the proper implementation of “environmental legislation and government policy” and may advise the government on policies needed to improve the state of the natural environment within a generation as set out in its 25 Year Environment Plan.

However, the consultation has important limitations. The new governance body, whilst provided with the power to issue advisory (and possibly) binding notices, will not as currently proposed have the power to initiate legal proceedings against government in the event of a breach of environmental law in the same way that the European Commission is able to do with EU member states through referrals to the European Court of Justice. There is also uncertainty as to whether the environmental principles will be incorporated into law or into a policy statement as well as the extent to which the new body will really be able to influence new government policy.

Time to move beyond the “regulations versus growth” myth

These limitations appear to have been fuelled by the fear in some government departments that a well-functioning watchdog and binding environmental principles are bad for the economy, a concern that most likely explains the delayed publication of this consultation. This fear is not new but flies in the face of increased evidence showing that well-designed, properly enforced and ambitious environmental regulations can deliver significant environmental andeconomic benefits.

In a recent report, engineering consultancy BuroHappold carried out business interviews to understand the economic impacts of ambitious environmental regulations in three sectors: construction (London Plan), waste (Landfill Tax) and automotive (EU passenger car emission regulations). In all three cases the analysis found that the upfront costs of complying with these regulations were outweighed by the economic benefits they triggered through increased business investment in innovation and skills, better-quality products and infrastructure, greater business competitiveness, and job creation.

As the Royal Society for the Protection of Birds and the cement manufacturer Cemex stated in a recent joint blog, “progressive businesses and conservationists are in agreement that sound and well-implemented legislation is important in order to protect and restore the environment, to provide a level playing field for industry and to stimulate innovation and enhanced performance.”

The bill needs to be strengthened and broadened

If the UK government genuinely intends to have a “world-leading” environmental policy framework after Brexit, the proposals for the upcoming bill need to be significantly strengthened and broadened. First, the bill needs to provide the green watchdog with the same last-resort enforcement powers than the European Commission currently has, namely the power to initiate legal proceedings against government. The environmental principles that will underpin the application of existing environmental law and the development of future environmental policy should also be set in legislation, not a policy statement. This is essential to give environmental law genuine legal bite and to provide businesses with a reliable sense of policy direction and the certainty that there will be a level playing field in the way regulations are implemented after Brexit.

Looking ahead, the bill should also be broadened if it is to drive private investment in the natural environment. Most importantly, the key goals of the 25 Year Environment Plan should be included in the bill, and the new watchdog should have clear powers to advise the government on the policies needed to deliver these objectives and to regularly report to parliament on the government’s progress. This is essential to ensure continued scrutiny on the delivery of the plan’s goals and to ensure that these goals can genuinely shape environmental polices in the next couple of decades.

The government has set itself the objective of improving the state of the natural environment within a generation, an ambition supported not only by environmental non-governmental organisations but a large cross-section of the business world that understands that a healthier environment is essential for a competitive economy and resilient infrastructure. Delivering this vision will require binding environmental principles, effective enforcement powers and long-term legal targets to improve the state of the environment.

Nick Molho is Executive Director at the Aldersgate Group