 For today's event and to introduce a colleague of mine, former colleague, head of E3G in London, Nick, I was very happy to work with E3G with my other colleague, Johnson Cavanto, who's here for a number of years recently on European energy policy, but was always hugely impressed with Nick, maybe, who's an amazing, I think, insight as to what's happening in the political system and applying it to a particularly climate and energy issues. Where he's had a long-held interest going back to MIT, I suppose originally, in terms of energy systems analysis, Al Strump, he went astray, World Wildlife Foundation, he was World Wildlife Foundation, he was found again, and then Foreign Office and number 10 in London, and as I said, for the last, must be 10 years in E3G, 11 years in E3G. So I think we're very lucky to have him here, it's a very interesting time to have his perspective on some of the climate change issues in relation to Brexit in our future of Europe. Thanks very much, and thanks so much for inviting me here. I think it's the second time I've spoken here. The first time I spoke here was the first time at Amen, and when we kind of dragged him into doing some interesting politics around Europe. Amen mentioned in my history that I kind of took a detour working in the nuclear industry. I actually wasn't working in the nuclear industry, though I was working in the nuclear industry. I thought I was working in the only UK firm that produced wind turbines at the time I graduated from college as a mechanical engineer. Then I found out that the wind turbine we were building was a three megawatt wind turbine on Orkney, and the partners in the wind turbine were BA Systems, a nuclear firm, and Rolls-Royce, and that's when I realised the reason we were doing that when the Danes were building 500 kilowatt wind turbines was that the Department of Energy wanted us to come up with the most expensive wind turbine ever built. So they could prove definitively that wind power had no future in the UK and the only future was coal and nuclear. That's when I started to stop doing engineering and started doing politics, so which kind of sums up my whole journey. I wish in some ways I'd graduated at the time I could have carried on building huge monstrosities in the North Sea that were drowned, but you don't get to organise the times you live in, and that's why at E3G we do a lot of work trying to connect politics and policy, and this is obviously the role of Brexit in energy and climate change is pretty much on the biggest piece of politics and policy out there. So before I start I'll just introduce E3G so you know who we are. So we're a non-profit. We have offices in London, Brussels, Berlin, and Washington, but we work kind of half in Europe and half outside Europe. We'll focus on accelerating the transition to sustainable development where real kind of climate changes are core business, but really looking at the difficult social and political and regulatory transitions. We're working with a range of organisations in Brussels and Jonathan leads that work here as well on the negotiations, but also on the future of Europe, so the link between that shifting how all of this changes Europe going forward, but we're also working in the UK with a set of environmental NGOs and others on for greener UK that are trying to make sure that the UK side is run well. So on both sides of the channel we see both sides of the conversation. I think we're trusted on both sides of the conversation but we'll see how that goes during the negotiations and just because everybody always asks where work we do is supported by foundations, mainly mixture of European and UK foundations. So what are the kind of core messages from the work we've been doing since the referendum really, since the fateful day afterwards we thought what does this mean for us? Well the first one is we think that EU 27 is much too complacent about the outcome of Brexit on the interests, the future security and prosperity of Europeans, but they just think it's something that happens over there and it isn't really going to touch them. But we definitely think Europe can't afford an uncooperative Brexit which can appear in several different ways because the chances of a deregulatory state in the UK are incredibly high for lots of structural political reasons which we'll downlifts discuss and if that happens it will massively chill the development of an inclusive high quality Europe and also lower Europe's ability to shape the world for Europeans, that ability to project power and influence and of course it will also give immediate costs and the country most affected by those immediate costs will be Ireland as you all know so well in the front page of the papers today say so eloquently about how much public revenue will be lost. The world has changed and we'll go through these detailed scenarios we've been doing for the last year when after the elections we see the scenarios kind of polarised now between a more cooperative soft outcome and actually a complete crash and with nothing much in between we'll go through why that is and it's a mixture of the kind of chaos in the UK plus the failure to get a mandate for a hard Brexit and we really think that in order to move us towards a more likely cooperative soft Brexit outcome and perhaps even a change of hearts in the UK that's all talk about that that energy and climate change is a great place to build cooperation we need to have dynamic cooperation there's a lot of win-win activities we need to do and that can be a way of doing it and Ireland has a specific role to play in championing a more cooperative politics inside the EU 27 because it's unique space, voice and position negotiations that's the general message so the first piece why do we think Europe is complacent about Brexit? Well part of it's the good news you know the mojo is back Macron is back the populace are defeated everything's fine well it's not everything's fine everything's going better than it was and the idea of Europe cracking up into chaos has seen us a much lower likelihood in the next few years though obviously in Paris it's we've got five years to defeat the populace it's a basic line and we need to make some big changes but still that means that the political attention in Berlin in Paris in Brussels is really focused on the Eurozone reforms it's focused on the offer to the left behind it's focused on dealing with Trump dealing with China if you follow the latest EU China summit good on climate still bad on difficult on trade and the relationship between two you know Europe's got to act like a proper geostrategic power now and it's not you know it's still getting its head around how to do that without the UK and of course this is embodied in a future of Europe process that's about to kick off from already in earnest start in December and it's because they think yeah and rightly that the economic costs of a disorderly crash Brexit will form up mostly on the UK and basically that will be a good thing to discourage others to go so if your main issue is discouraging others and that's still especially in Brussels is the main thing people think about then that's good in the kind of political chaos in the UK is an object lesson if even a stable politically stable country like the UK doesn't feel that stable when you live in it but anyway from the outside it's a narrative so that so basically the heart of the better is a little bit and it's I was talking to a colleague in Paris she said rationally they know that's not true but this is emotional this is about you know there's an emotional piece here which is still quite strong because of the resentment of the divorce vote but as I said before the underestimates the cost of having a very large economy just offshore from Europe which is focused on aligning with the US and Australia and others and using deregulation as a major force of competitiveness which will fail and therefore they'll double down on it they won't say we're not going to do more deregulation you know there's a long way you can go down that line if there's a lack of cooperation and really I think people underestimate on the continent the strength of that faction of the Conservative Party and their supporters in the right-wing press I mean it's a daily mail it's a telegraph it's the express they're the major right-wing tabloids and broadsheets and they're very vocal about this even after the tragic fire the Grenfell fire their headline was did EU regulations cause displays it was absolutely repulsive that's their first thought can we blame EU regulations for everything so and I just don't think people understand how much sway they have in a particular part of the party and they're already preparing for this you know the key objective of this faction in the UK is to do trade deals with other countries and they're already looking at how to harmonize around chlorinated chicken and beef hormone treated beef with the US and Australia so the first three deals they want to do are US Australia New Zealand agriculture will be key what's that do to Ireland and Ireland's agricultural sector what's the DUP think of that we might ask doesn't seem to fit their version of Brexit but that's the that is the agenda live in Whitehall at the moment so too complacent so where are we going into so this is the structure you know this you phase one phase zero the negotiations about negotiations that took around two minutes we're expecting that to take a little longer after David Davis was so baroc in his idea so we're in phase one you know citizens money in Ireland and at some point there will be a decision that that's going well and we'll move into phase two the future relationship which people start talking about the future relationship and then they turn it into a discussion of trade and investment and services and all the other bits of our future relationship seem to to drop off and that the sometime you know there'll be a conclusion of a withdrawal agreement and the end of the and the kind of some some undeterminate point because we want to finish the trade relations but have some kind of MOU or principles where you know nothing's agreed till everything's agreed but we're not quite sure what that means but anyway so they can sort that out that's not too difficult you know Barney I said it's a two plus two two years withdrawal two years trade like Hammond said two plus four yesterday two plus seven might be more realistic um who knows um but somewhere in that in that range but the critical thing for us when we look at this is when do you discuss areas where we need to carry on cooperating whether that's security whether that's environment whether that's climate change whether that's energy whether that's digital places where the world is moving on we're staying the same or a little less than the same like a tariff isn't good enough where we actually need to cooperate to do win-wins and it's just doesn't like there's anywhere there so that we're doing two plus two and then do these things or are they going to be bundled in so where do we actually do the issues which for us we feel are at least as important economically and probably more important in terms of health and welfare and prosperity and security than some of the issues being looked at in the trade area given the low level of tariffs bound in under WTO which already there so priorities and for energy and climate of course this is happening at a very busy time i won't go through all the different processes but we're doing a lot of stuff on energy and climate at the same time as brexit but particularly we're re-engineering the whole of the EU energy economy and transport economy and financial economy and the budget which we changed by brexit and then have to put a new offer forward in 2020 to put paris back on track now we've decided we're defenders of paris we can't so back and then pretty much straight after that in the same commission with the same parliament we will have the global stock take in 2023 where we have to put our 2040 target on the table to be finalized in 2025 so that's pretty much one political moment in the same time frame as the brexit strike future agreement where we will determine the 2040 trajectory and offer of the EU and that pretty much determines what temperature we get to live with globally so if we can't as europe put a strong proposition forward how likely is it that china and india and others will or we'll end up with three degrees what do we think of that or two and a half you know pick your number but it ain't going to be well below two and it's certainly not going to be 1.5 so paris fails at that point inside which brexit is going on in parallel with all these changes so that's why we say for energy and climate change to crash brexit would be incredibly damaging so first distraction at the same time is doing this and especially if we we have a very uncooperative process and we're dealing with clearing up mess the idea that it will both empower low ambition forces in poland and it's silent allies in certain industries in certain other countries to do less but also weaken european diplomatic capacity uk has 145 full-time climate diplomats the european commission has 1.5 germany has around six so you know having a good relationship on climate deployment through the uk really helped as well as in global influence we don't want the uk veering towards a trumpist or post trump to be honest us which will still be split on climate change and not a real leader on climate action um because it hasn't got a good relationship with europe um deregulation a race at the bottom we need to stop that how do we make sure we've got rules that stop that race at the bottom especially if you're in ireland um disruption to markets you know ireland becoming an energy island if we haven't got rules to have a seamless internal market particularly in electricity it's going to be very hard to respond to the any energy revolution that's going on at the moment just as we're accelerating the growth of renewables and just when things like offshore wind are dropping radically in price and starting to become cost competitive with any other alternative but can only be deployed at real penetration scale inside an integrated um at least you know sub regional scale grid if not a continental scale grid you know you need that to make it work otherwise it doesn't become feasible disentanglement if the uk drops out we have to open up the european 2030 target have to rearrange burdens does europe actually put forward a lower target in 2020 like trump will was going to do that so we do in that we do a us so you know what's the consequences of dropping out so uk is drafting an ets bill even though it wasn't in the queen speech it's drafting an autarkic climate policy which is not connected to europe and deferral of investment you know until people know how they're going to be integrated together will they actually put money on the table for significant investments until they know how the european budget is going to work how the eib is going to work uh the market so on all of these areas of course um even under the best agreement some of these will come in but under a crash agreement all of these will be very bad sense so so where are we now what are the what is the kind of state of play in terms of the way the EU sees this um so we've got some good things barnier has said repeatedly in private and public that he wants to have a strong clause on not rolling back environmental standards um however in ceter and t-tip that was non-binding it was non-justiceable though there's a new court ruling that may change that but so fine but actually how binding is going to be in the final agreement when this is a real demand from the uk the hard liners they want to have the flexibility to do this because they want to align with other people's trade agreements um no cherry picking so there seems to be a bundling of the internal energy market with the internal market as a well it's not a thing that's a name for a lot of things a lot of treaties and so no you can't cherry pick sectors that's the need that's the line but again you know there is a revolution energy and digital systems which means we are integrated physically and we need to evolve with the integration of technology it's a technological fact we have to work together because we are physically connected and getting deeper connected in that way um the political importance of the climate leadership has risen with Merkel and Macron particularly coming out vis-a-vis Trump they've got to back that up if they mess this up they won't be able to back up their rhetoric with action so that should impinge on european prioritization um by 2030 at an aggregate level europe gets to 50 percent of renewables in the power sector and uk and others will be further down that path you just can't do that without integrating at the regional level and in the end there's an out the energy has never been a classic internal market system we have lots of different arrangements with countries like the energy community outside the EU and so if we want to carve it out and call it special it is special it's a different bit of the treaty it has different structures around it it's not the same as trade competence legal wise so there's no need to bundle it together to avoid cherry picking but you know it's unclear those are good arguments to make it different but Barney to us anyway has been unclear in terms of where he sees cooperation fitting in the negotiations and this issue of you know punishment and integrity is this just a chip in a bigger game of making UK feel the pain well if it makes Ireland feel lots and lots of pain perhaps it should be lower down on the list of instruments to use to enforce that particular negotiating objective the problem is we're not having a public debate about those priorities in Europe it's as if it's all done in Barney A's head well that's obviously not good enough there should be a public debate about in which areas you make leaving the EU look like a bad thing I mean obviously UK politics is an object lesson of why you shouldn't try and leave Europe but you know I think it's really you know the absence of that public debate is really stifling the discussion we are not negotiators Barney A has to say certain things he's a negotiator but we can have a political discussion around the negotiations which thinks about these things whereas sometimes it feels like it's like no you're not allowed to speak because that will undermine the European negotiating hand well I just don't I don't believe that and I don't think it's healthy for democracy and for 21st century diplomacy to say people in in closed rooms will determine the future and I think t-tip showed what's happened when you try and run a 21st century diplomacy process that impacts people's what they eat what they breathe where they go to work and then try and run it like an old classic 19th century process where you just trust the negotiator to go away for six months and come back with a deal so we've done a lot of work on scenarios around brexit thinking through how they work and we've I'll show you the kind of how we've labored it so we've looked at four core drivers the first one is how people are prioritizing national interest we've done quite a lot of work particular energy and climate looking at the national interest different countries secondly you know orderly versus disorderly negotiating processes this is not always what you want but the negotiations are so complex the UK is so disorganized just trying to run this even with goodwill is hard and as the co-behagian negotiations showed us in climate change you know things can just fall over because they're too complicated and geometry of the negotiations can determine things which political outcomes the third one is the timing extent of economic impacts how wealthy do people feel particularly in the UK at certain points how's that going to change that's going to be a lot of this is what forces come together at what time relative to negotiations again it might not be your intent you have to live with the economics and politics you've got and then last one is what's the momentum coming out of the article 50 withdrawn negotiations are we hating each other and static or is it you know we've done a quick deal with lots of goodwill and we got half when you've got on the way to moving forward so how that's gone which is again a mixture of tactics playing into strategy so those are the areas we've looked at and this is where we kind of plot them out we have a y-axis between orderly and disorderly we think that's really important that how things are playing and then we have a x-axis of corporation interest dominate and on the other one sovereignty and integrity for the EU interest dominates that's the kind of playing field and we identify kind of three stroke four kind of core blobs of where we think things can land up depending on the dynamics they don't overlap because they're driven by very different forces at the bottom there's the EU in chaos outcome which is very disorderly driven from the EU side remember we started writing these last year and basically integrity and sovereignty is not completely dominant but pretty dominant so that's the kind of that was one outcome at the top right we have economic transition that's a corporation interest dominate it's an orderly process we try and do you know the best deal we can obviously there's a range of outcomes that you can get in that but it's generally we're trying to get a good outcome and we have a process that lets us go through it and then on the other side we have a blob that has two poles one is the sovereign transition which is you know Europe prioritizes integrity UK prioritizes sovereignty it tries to run an orderly process and kind of tough battles David Davis is in there being kind of I'm going to make a row in the summer um that's you know but that can drop down into hostile nationalism particularly because that's where you play tactical games to your own audience and say aren't they bad they're not looking good faith and so it's a bit of a slippery slope and so in February 2017 that's where we thought the scenario was that's amazing negotiating position we thought the dominant scenario was they'll try and do sovereign transition particularly from the UK side with a very high risk of dropping into hostile nationalism and I go through this in detail but you can just from the reds for the energy and climate change on all of the indicators and benchmarks we use um not very good either for the UK on the left or the EU on the right more reds for the UK but still not a very good outcome and particularly if it crashes out and I say there's a paper you can read all of this um so what's changed so we just updated the scenarios they've just been put on the website so after the UK and French elections so what have we what have we seen well positive move on national interests we think there's a kind of stronger view towards cooperation macrons come forward people feeling um more confident UK election result means business voice will be stronger there's you know the remainers were seen to have kind of pushed against the hardest of brexit outcome so positive positive on that line orderly versus disorderly on the other hand gone the other way the ability of the UK to hold a negotiating position and particularly to do a final deal at heads level when the normal negotiations break down because this will not be solved at the negotiator level has dropped off massively because there is no consensus in any party on what brexit UK wants so this isn't just a fact so who knows what brexit will pop out so the likelihood of um disorderly negotiations has gone up um economic impacts mixed but we're seeing them hit in but not a real change from what we were expecting we're expecting that to you know negative economic impacts to roll through pretty much as they are now and momentum coming out we think yeah it's kind of mixed as well not not a huge change um going forward updated it after the recent meeting was a bit more positive because they've not argued over the agenda so how does that change what we think is likely in dominant scenarios it's it's very strange we think that UK can't do a sovereign transition anymore it's lost that mandate so the actual that space has gone that's why that blob has gone down we think EU and chaos is off the table for the next few years you know we may be proved wrong but we're taking a fact that that's an unlike very unlikely event now so we're now stuck in two polarised scenarios a solid orderly kind of economic interest driven approach and a disorderly populist driven hostile nationalist approach like a crash brexit so you know kind of either one or the other and the question is which one are we going to go for and how do we try and get further up that side and again I won't go through the detail but we've done analysis of what hostile nationalism means for energy and climate very bad for the UK gets lots of reds it's still pretty bad for you on all of our metrics and particularly bad for Europe going into the next climate I mean climate is really really bad because it just you know there won't be much much better if we get an orderly outcome orderly cooperative outcomes again feel free to read through the detail so quite big stakes quite polarised outcomes how do we make sure we're more likely to get on the cooperative outcome and we think that's my island it's on my last slide but island can play a really critical role so island has the most to gain from the strong cooperation and not just an engine climate but everything and much to lose from the crash brexit I don't think there's much complacency here so you're a bit of an outlier compared to certainly Paris and Berlin I wonder if Denmark and Sweden and others what they think we haven't gone but we are planning to take this down to kind of get the temperature island is very well positioned to be a advocate for a negotiating approach actually creates a clear space to do the cooperation so let's just leave it to chance or Barnier's whims to do it because you can blend you've got an interest which is very hard headed about the deregulatory side so being tough in the lose lose negotiations over trade relations you know those aren't much fun they're not going to generate any wealth or value but they need to be sorted out but at the same time in the kind of win win areas where we need to strengthen future cooperation from where we are today's isn't about you know in climate change we need stronger climate change to go cooperation is stronger energy than under current European rules and that's what we were negotiating internally inside Europe a positive cooperation a cooperative approach and we think you could do this in four ways firstly just making the case for it just saying if we want the politics to be shaped in the right way we can't just talk about lose lose all the time we have to have some places where you are building this partnership and that's important for us that's important for Europeans and it's important for Ireland so making that kind of principled national European case secondly make sure these issues are dealt with positively in the first phase discussions about Ireland because all of these issues will come up now we're not quite sure when the timing of that is going to be but it's something they will have to address in phase one on things like energy cooperation etc and properly can't just be again a kind of border discussion it's going to have to be about how we cooperate thirdly start to build the coalition of other countries who care and who will start to move that again trying to find who those people on the environment side on cooperation and different areas and realize that if it's just a negative relationship we can end up with something very bad and also support business and think tanks talking about it like this this is a way you surround negotiations with thinking it's not all about negotiation we haven't thought through all of the dynamics and the priorities of the brexit negotiations that should be a right debate and it should be a debate with Europeans across all the countries including the Europeans who live in the UK who have some interests and don't necessarily feel particularly represented by David Davis at the negotiating table and lastly the potential as we get into the second phase to oppose that climate energy then becomes a bit of an early harvest strategic confidence building measure very normal thing to do in big complex negotiations say let's show we can work together on these things let's work we can work through arbitration and regulatory harmonization of in an area that is not politicized but we've got very aligned goals there's lots of value to be created and show we can do it and then other things on the cooperative side can move forward and that is a and that's put in from the beginning not waiting till after we've got totally bored of doing you know customs deals and tariff negotiations and access for the city of London and everybody's completely tired at the end and I think there's a particular issue at the end of phase one which is about international obligations where we have to decide if we're going to talk about UK being part and EU's commitment under the Paris Accord which was taken together and part of phase one is talking about ongoing international obligations so again there is a place in the current terms of reference to say okay how are we going to deal with this this is big and important it can't just be shoved in a side closet and left till later we need to actually have a process for dealing with it and so we think if this is something Ireland can do which would have a material impact in getting a better outcome and again not just in climate energy but in shaping the whole frame of the negotiations and particularly so that European citizens this back to the future of Europe that they think these things are being done not to in the interest of Siemens and Goldman Sachs and others and trade-offs between you know sectors and services and goods because whatever they say that's what the trade stuff will be about but actually in the interest of what Europeans care about and what give Europeans direct welfare benefits security benefits prosperity benefits because we don't want this to be t-tip too in terms of the relationship between a negotiation and European citizens because then one it might fall over right at the end which would be another way of getting crash Brexit not getting ratification but also it would set up the new Europe assuming UK does leave in the wrong spirit from the beginning in a spirit that had distrust at its core rather than trust and a new social contract at its core which for me is what the point of the future of Europe debates was all about and this is critical to do it thank you very much