ENVIRONMENT: An Introduction

Contributed by Six Pump Court 

Practice Area Overview – Environment 

Environmental law in the UK is potentially on the brink of great change driven by a number of challenges and policy developments. Brexit will remove the oversight and jurisdiction of the European Commission, European Court of Justice and the European Environment Agency. At the same time, the Government had committed to a ‘net zero’ legal target by 2050 – the first developed economy in the world to do so. The ‘David Attenborough effect’ appears to have strengthened the public’s view of the importance of the environment, and arguably at the present time civil and community pressure exceeds regulatory pressure on business. Business awareness of its carbon footprint, impact on natural capital and the potentially damaging effects of climate change has never been greater.

The key developments that will dictate the direction that environmental law will take are:

The Environment Bill 

The first half of the Environment Bill has been published and subjected to pre-legislative scrutiny. It promises a world-leading, statutory and independent environmental watchdog called the Office for Environmental Protection (OEP). It promises the placing of clear environmental principles on a statutory footing, to be accompanied by a policy statement explaining what these principles mean. At this point in time, the draft Bill has been severely criticised. Climate change has been omitted from the remit of the OEP. There is no legal requirement for policy or public bodies to seek to ensure a high level of environmental protection, nor any presumption that environmental protection will not be reduced following the UK’s departure from the EU. The enforcement powers of the OEP have been criticised for being restricted to ensuring administrative compliance, rather than achieving environmental standards. Further, the second half of the Bill is yet to be published.

The net zero target 

The Climate Change Act (2050 Target Amendment) Order 2019 came into force on 27 June 2019. It enshrines in law a commitment by the UK to reach net zero carbon emissions by 2050, by amending the Climate Change Act 2008. Aside from the fact that current projections are that the UK will miss its fourth and fifth climate budgets, there is an interesting debate on how much this will cost, with the Department for Business, Energy and Industrial Strategy estimating that the total cost of reaching compliance will be in excess of £1 trillion (or £70 billion per year). There has been no full impact assessment and, although the Government will place the 25 Year Environment Plan on a statutory basis, there is some concern over the lack of detail on policy initiatives required to achieve compliance. Much may depend on the ability of private enterprise to drive forward green innovation.

Green reporting 

The Government published its Green Finance Strategy on 2 July 2019 with two fundamental principles: aligning private sector financial flows with clean, environmentally sustainable and resilient growth, and strengthening the competitiveness of the UK’s financial services sector. Corporate reporting assumes an ever increasing importance, with an expectation that all listed companies and large asset owners will disclose in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), as well as the future clarification of the responsibilities of the Prudential Regulation Authority, the Financial Conduct Authority and the Financial Policy Committee.

Enforcement 

Serious pollution incidents in the last 12 months have increased by 30%. For the last 12 months to Q3 2018/2019, a total of 514 incidents were recorded (which may rise by 10% when all investigations are concluded). This is well in excess of the Environment Agency’s ceiling target of 400 incidents. Waste crime is a significant priority with substantial additional Government funding specifically allocated to target this area. The Environment Agency has been working with the police and HMRC to develop and establish a Joint Unit for Waste Crime (JUWC), to be led by the Environment Agency. Civil sanctions go from strength to strength and continue to represent a cost-effective but environmentally conscious means of resolving certain disputes. Variable monetary penalties have yet to be used but the coming year may see their development as a means of finding an alternative to criminal prosecution.

Air Quality 

On 5th April 2019 the European Commission published its ‘EU Environmental Implementation Review 2019’ for all Member States, including the UK. On air quality in urban zones there has been no change in compliance concerning the high number of zones with exceedences above the EU air quality standards for nitrogen dioxide, albeit that in 36 out of 37 non-compliant zones, the latest data shows that there has been some improvement. Air quality in the UK continues to give cause for severe concern and it is noted that persistent breaches of air quality standards have severe negative effects on health and the environment.

Environmental Arbitrations 

There has been a surge in the number of international investment claims filed with an environmental component. The main factors driving this trend are the increasing internationalisation of environmental law and growing awareness of the interconnected and transboundary nature of many environmental problems, coupled with a desire of host States to protect their ability to act in pursuit of legitimate environmental regulatory objectives. Expect to see disputes rise as States reconsider their approach to renewable energy policies, environmental permitting, extractive industries and water and waste management.

All of the above presents the enticing and challenging prospect of a fascinating year ahead for environmental lawyers, clients and industry.