In this latest Environmental Law News Update, Christopher Badger and Mark Davies consider predictions for the year ahead, new legal limits on sulphur in shipping fuel and Mark Carney’s call for action on climate change disclosures.
Environmental Law Predictions for 2020
We begin this year as we did the last: with our predictions for environmental law in the forthcoming year.
The Environment Act 2020
The forthcoming Act offers the Government the chance to safeguard our environment for future generations. The key question is whether or not the Government will seize that chance. Key concerns include the failure to set out the policy framework within which the environmental principles will be applied in practice, the fragility of the Office for Environmental Protection and whether or not the body will be sufficiently resourced in order to be able to meet its objective and the date of 2037 as the date to achieve environmental targets when many agree that there is a current climate emergency.
The Queen’s Speech identified that the Act will set legally binding targets, including a commitment to improving air quality and banning the export of plastic to countries outside of the OECD. There was no suggestion that the Government intends to make any major changes to the current shape of the legislation. We therefore predict:
- Little substantive change to the current shape of the Bill;
- The Government’s commitment to a ‘level playing field’ will not amount to equivalence with EU standards and in fact opens a path towards divergence which may well be significant in an era of expected major infrastructure projects;
- No non-regression clause;
- Few effective means of monitoring domestic progress towards the hitting of future environmental targets.
Heathrow’s third runway
We predict that the current appeal by Plan B and Friends of the Earth against the expansion of Heathrow will fail by a majority in the Court of Appeal, resulting in the case inevitably being heard in the Supreme Court, albeit not before the retirement of specialist environmental Justice, Lord Carnwath.
At the Supreme Court we predict that a refreshed panel of Justices will also reject the appeal. Environmental protection objectives, enshrined by way of example in the Paris agreement, will not prove sufficient to prevent expansion. Instead, and at the risk of oversimplifying the extremely complex arguments that will be advanced, we predict that the Supreme Court will rule that the carbon budget commitments imposed on the UK Government and its commitment to the Paris Agreement allow for the reconsideration of the Airports National Policy Statement at a future point in time, based on future scientific evidence, and do not immediately require the derailment of the expansion project.
Expansion of producer responsibility schemes
The expansion of producer responsibility schemes is one way of the Government addressing some environmental concerns, namely the environmental impact of placing products on the market, without having to pay to achieve potential environmental benefits.
By way of example, the Government’s consultation on the UK packaging producer responsibility system closed back in February 2019. Responses have not yet been published, but it is intended that the scheme will be reformed in 2021 and become operational in 2023. The proposal is that businesses will bear the full net cost of managing the packaging they handle or place on the market at end of life.
We therefore predict that there will be a significant policy development that businesses are going to be required to respond to, incentivising the use of recyclable packaging but at a cost to business. Expect policy to extend to the world of chemical and pharmaceutical regulation, where producer responsibility could be used to attempt to regulate end of life drugs and chemicals which may otherwise end up in the natural environment.
New requirements on sulphur limits in shipping
From 1 January 2020, the limit for sulphur in fuel oil used on board ships operating outside designated emission control areas has been reduced to 0.50% mass by mass. This is intended to significantly reduce the amount of sulphur oxides emanating from ships and have major health and environmental benefits, particularly for those living close to ports and coasts.
The main type of “bunker” oil for ships is heavy fuel oil, derived as a residue from crude oil distillation. Crude oil contains sulphur which, following combustion in the engine, ends up in ship emissions. Sulphur oxides (SOx) are known to be harmful to human health, causing respiratory symptoms and lung disease. In the atmosphere, SOx can lead to acid rain, which can harm crops, forests and aquatic species, and contributes to the acidification of the oceans.
These Regulations are at the instigation of the International Maritime Organisation (“IMO”). Ships must be issued with an International Air Pollution Prevention (IAPP) Certificate by their Flag State. This certificate included a section stating that the ship uses fuel oil with a sulphur content that does not exceed the applicable limit value. However, there is a concern about enforcement. The IMO does not set fines or sanctions. Instead enforcement is down to the individual State Party. There is also some concern that there is not sufficient compliant fuel oil to meet projected demand.
Mark Carney wants to see action on climate change finance disclosures
In what will be one his last interviews as Governor of the Bank of England, Mark Carney told the BBC Radio 4 Today programme (as part of the episode edited by Greta Thunberg) that the Bank wants action by companies on climate related financial disclosure, so much so that it should become ‘the norm’.
What is interesting is that Mr Carney considers climate related financial disclosures are necessary, not so that institutional investors can understand the impacts of large investments, but so that, in his words, ‘you and I… can understand how our money is being invested’ and whether that money is being invested ‘in accordance with the transition path’ that is ‘the law of the land’.
Of course, what the ‘transition path’ comprises is still being agreed and what you and I might think of as green, or indeed dirty, investment might differ. Shortly before Christmas the European Parliament approved a compromise to the EU’s sustainable finance rulebook (at the insistence of the UK, France and a host of Eastern European countries including Poland, Hungary and the Czech Republic) to recognise nuclear and gas as ‘transition’ sources of energy.
This is interesting because when Mr Carney was asked in the interview about whether he considered there to be enough ‘truth in our political debate’, he responded to say that on climate change he thought that there should be a ‘cross-party, non-partisan approach’ so that information provided is ‘absolutely clear’.
Whilst it is not suggested that countries should not be able to debate and determine whether nuclear and gas energy should be considered as ‘transition’ sources of energy, for example, it would seem that if Mr Carney’s wish for you and me to understand whether our money is being invested greenly or not, there is going to need to be some education as to what constitutes a green investment in the eyes of the state. Whether that may differ from what you and I consider to be a green investment will remain to be seen.
Either way, expect to see a lot more discussion as to whether investments are ‘in accordance with the transition path’; it’s the law of the land.
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