On her second day as Prime Minister, Theresa May scrapped the Department for Energy and Climate Change (DECC), triggering alarm bells that climate change would be a low priority under her premiership.

But does this move, taken in the aftermath of the Brexit decision, foretell a radical shift in climate policy?

So far, not much has changed. The Climate Change Act makes adjusting policy direction difficult, and the fifth carbon budget for the period 2028-2032 had already been agreed the week before May was instated.

On a positive note, the leadership of the new Department for Business, Energy and Industrial Strategy (BEIS) have been champions of strong climate policy. Nick Hurd, the minister responsible for climate change in the newly formed Department, welcomed his new brief as a chance to reconnect with the issue that mattered to him most as a new MP.

UK must uphold ambition and internationalism

The UK has a more ambitious emissions reduction target of 50% by 2025 against 1990 levels compared to the EU target of 40% by 2030. It has also cut emissions by 35%, while the EU as a whole (including the UK) has only managed 23% so far.

As the EU and the UK separate out and revise their Nationally Determined Contributions (NDCs) under the Paris Agreement, it is essential that the UK maintains ambition and uses its influence to prevent the EU backsliding on its climate commitments.

And until now, the EU negotiated on behalf of the UK (and other member states) at the UNFCCC. Post-Brexit, the UK will have to strike deals for itself.

But multilateral negotiations are dominated by groups of countries working together. The UK must therefore choose which clubs to join if it wants to live up to the Brexit promise of embracing a new internationalism.

As a first step, it should join the High Ambition Coalition in its own right (the EU is a member), signalling its intent to pursue ambitious climate action.

Brexit's implications for EU climate negotiations

The climate policy ripples caused by Brexit may be more keenly felt in the new ‘EU 27’ than the UK. Two weeks ago, the EU announced the amount each member state needs to reduce emissions by in order for the EU to meet its agreed NDC target of a 30% cut in agriculture, transport and building emissions by 2030.

Because the UK’s share is higher than average (37%), around 29 million tons of CO2 will need to be reallocated once the UK leaves the EU. Some countries will not want to cut beyond what they have already grudgingly agreed to, leading to prolonged discussions over relatively small volumes of greenhouse gases.

The next few years look set to be bogged down in similar Brexit negotiations – time that should be spent reaching an agreement on how to deliver on the EU’s longer-term commitment of 80-95% emissions reduction by 2050.

In addition to these delays, without the UK pushing for greater ambition from the inside, less committed member states could water down EU climate commitments. This would undermine the EU’s claim to be at the vanguard of climate action, weakening its influence in future international climate agreements.

UK climate spending can support good relations with major developing economies

The UK has been a climate finance leader in Europe. It created the International Climate Fund (ICF) and committed to doubling its funding at the end of last year.

A major innovation of the ICF was that it was jointly managed by DECC, the Environment Department, and the Department for International Development (DFID). Together, these departments created incentives for development finance institutions, including Multilateral Development Banks, to do more on climate change. They also engaged the private sector, catalysed private investments, and incorporated a climate risk perspective into development assistance. 

DECC’s involvement has been vital in focusing the attention of major economies and mainstream financial institutions on reducing emissions. As an international climate change negotiator, DECC also created direct links into the UK’s negotiating position.

Although DECC has now been swallowed by BEIS, this need not be bad news. The new structure could create opportunities to continue to mobilise business action and private investment in developing countries by leveraging climate finance. 

A potential shift to the right in UK politics

Politically, the UK’s international commitment to development assistance is unlikely to change, not least because the 0.7% of GNI ring-fenced for aid is protected by law. But a big shift in policy could undermine the extensive work already done to ensure all development assistance supports low-emission and climate-resilient development.

The most significant fallout from Brexit for both climate and development policy is likely to result from the potential shift to the right in UK politics.

Trends prior to the referendum now look likely to accelerate, including a stronger emphasis on value for money in investments, a greater focus on private sector delivery, and approaches that create new market-based incentives for action, such as index-based insurance (see the Africa Risk Capacity initiative).

Uncertainty over EU funding could also impact research and jeopardise the UK’s position as a thought leader in climate finance, adaptation and resilience.

UK must remain a strong advocate for adaptation and resilience

The UK’s divorce from the EU also has implications for domestic adaptation finance.

The EU’s current seven-year budget includes €1.7 billion for climate change adaptation and risk prevention in the UK – a bill the UK Government may be reluctant to pick up. As it draws up its own NDC, the UK has the opportunity to lay out clear and verifiable goals for how it will adapt to climate change. Fortunately, much of the groundwork has been done in the UK’s National Adaptation Programme (NAP) and the work done by the Adaptation Sub-Committee.

The UK government, spearheaded by DFID, has also been a strong advocate for adaptation and resilience internationally. Its programmes that support resilience in vulnerable countries are generally high performing, delivering both development and climate benefits. It would therefore be surprising if adaptation does not retain its financial and political prominence under a reshaped government.

On the international negotiation stage, the UK may continue to push its opposition to loss and damage payments for developing countries within the UNFCCC, although Brexit could also open the way to a softer EU stance on compensation and liability. 

If the UK is serious about being a world leader outside of Europe, it must look to the future and put tackling climate change at the heart of its internationalist approach. This means putting in place the building blocks of a new green economy, making climate risk a central consideration in its investment strategies, and helping developing countries adapt to climate change.