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June 24 —The U.K.'s historic vote to leave the European Union will almost surely weaken Europe's pro-climate action forces and is likely to have a negative impact on investments in clean energy, experts said June 24.
But the overall, long-term impact the move will have on efforts to combat climate change, including the Paris Agreement reached last year, remains far from clear, they said.
Surveys showed those in the U.K. who voted to leave the EU were about twice as likely to be skeptical about the science behind climate change, and many “Brexit” leaders were similarly skeptical of either climate science or international treaties.
Observers said that probably means the U.K., which has generally been a progressive voice in international climate negotiations, would be less likely to continue that role.
“There is a very real fear that [Prime Minister David] Cameron's successor will come from the school that supports a bonfire of anti-pollution protections,” John Sauven, the director of Greenpeace UK, said in a statement. “The climate change-denying wing of the Conservative Party will be strengthened by this vote for Brexit.”
Stanley Johnson, co-chair of Environmentalists for Europe, agreed.
“Don't tell me a new Brexit-led British government is going to put climate change and environmental regulation on top of its pile of priorities starting June 24,” Johnson said before the vote.
News of the vote sent worldwide financial markets reeling, lopping hundreds of billions of dollars off the market capitalizations of corporations. Financial analysts said they do not expect a rapid recovery.
“When financial markets take such a big hit, it's safe to wonder about the impacts that will have on investments,” Marco Livorno, an energy market analyst with Hildebrandt and Ferrar in Milan, told Bloomberg BNA. “Low oil prices already made investments in most green energy projects difficult, and with less money available we could see a major dropoff.”
But beyond those points, the June 23 referendum left more questions than answers.
The EU, for example, last year submitted to the United Nations an Intended Nationally Determined Contribution, or INDC, on behalf of all 28 member nations, promising to reduce greenhouse gas emissions by at least 40 percent compared to 1990 levels by 2030. A total of 162 INDCs covering 189 countries were written into last year's Paris Agreement, the world's first global climate pact.
It is not yet clear how the EU's INDC target will be adjusted with the U.K. out of the picture. Without the U.K. included, the 40-percent, EU-wide reduction target will be more difficult, since the U.K. was expected to have a more ambitious internal target, with the Committee on Climate Change, an autonomous U.K. government advisory body, recommending a 57-percent domestic reduction in emissions compared to 1990 levels by 2030.
Earlier this week, Christiana Figueres, the outgoing head of the UN Framework Convention on Climate Change, speculated that a U.K. departure would require a “recalibration” of the EU's vow.
But David Waskow, director of the World Resources Institute's International Climate Initiative, told Bloomberg BNA a change in the overall EU target was unlikely.
“There are questions, possibly, a question of effort-sharing within the EU bubble, shifting from 28 to 27 members,” Waskow said. “Now the focus would be on that effort sharing within the 27. So the EU target of 40 percent reduction won't change, but that effort sharing will have to be addressed.”
News of the U.K. vote also pushed prices for EU carbon credits down almost 20 percent to a two-year low of 4.60 euro ($5.06), amid uncertainty whether the U.K. would continue to participate in the carbon markets that also include some non-EU states, such as Switzerland and Norway. Analysts said prices were unlikely to stabilize until the U.K.’s role was clarified.
“Brexit clearly poses some risks to the strong momentum coming out of Paris,” Elliot Diringer, executive vice president of the Center for Climate and Energy Solutions, told Bloomberg BNA. “It's much too early to know how things will play out.”
The situation could worsen if the U.K. vote emboldens other anti-EU parties in other countries. If the EU begins to fracture, it would have even bigger impacts on financial markets and international priority making, and it would clearly diminish the influence of the EU's progressive voice in climate negotiations. But political analysts said that kind of development remains a long shot.
It's possible that the Brexit vote could result in the Paris Agreement entering into force earlier than expected. Entry into force requires at least 55 countries representing 55 percent of worldwide emissions to ratify the document.
Most prognostications see the 55-55 threshold being reached in the second half of next year. That would take place without EU ratification, which requires individual ratification from all member states and the European Parliament, something expected only in late 2017 or in 2018.
If it is no longer required to wait for the EU as a whole, the U.K.—which represents 1.1 percent of global emissions—could vote to ratify the Paris Agreement before the EU, perhaps as early as this year, said Alden Meyer, who tracks the UN climate negotiations for the Union of Concerned Scientists.
With assistance from Dean Scott in Washington.
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