Britain Looks to Carbon Markets From China to Canada Amid Brexit

  • U.K. should maintain status as climate leader: Lords report
  • Replacing funding provided by EIB will be a challenge

Britain should consider linking with China or California on climate policy and emissions trading after leaving the European Union, according to a panel of lawmakers.

“Repatriating environmental law to the U.K. will be an immensely complicated task,” said Robin Teverson, chairman of the House of Lords EU Energy and Environment Sub-Committee. “We are not convinced that the government has yet found a way to deliver the continuity of environmental protection that we all want to achieve.”

The U.K. should identify other countries it can align itself with to maintain its status as as leader in the fight against global warming, the House of Lords EU Energy and Environment Sub-Committee said in a report published Tuesday.

While the first option for Britain should be to stay in Europe’s carbon market and agitate to improve it, aligning with China, Canada and California might be among alternatives if the U.K. leaves, Teverson said. Canada plans to install a minimum price on each ton of carbon dioxide emissions in 2018 and China plans to put together a national market this year.

The U.K.’s environmental and climate change standards and policies are “profoundly embedded” in EU law, according to the lawmakers’ report. 

One challenge facing Britain following Brexit will be to replace funding currently provided by the European Investment Bank, Teverson said. The EIB has lent more than 37 billion euros ($39 billion) to the U.K. since 2000, including for low-carbon projects, according to the report.

“We can have broader horizons,” as nations seek to bed down the Paris climate deal struck in 2015, Teverson said by phone. “It’s an important part of finding our place in other groups in the broader United Nations.”

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