Last reviewed 11 January 2021

A global pandemic, a climate in crisis and uncertainties over Brexit dominated the news in 2020, but it hasn’t all been gloom and doom. Greenhouse gas emissions are not rising as fast as expected, environmental protection is being strengthened and Covid vaccines should see life return to normal — or should that be the “new normal” — at some point. John Barwise reviews ups and downs of the last 12 months and what might be in store for businesses this year.

Life in a year of Covid

Covid-19 was not the first story to hit the news desk in 2020 but it was the most serious. More than 1.5 million lives have been lost to this deadly virus so far and the tragic loss of life looks set to continue well into the new year, as governments around the world struggle to get their vaccines distributed.

Little was known about the virus when the first human cases of Covid-19 came to light in Wuhan, China, in December 2019. Evidence suggests it came from a strain of the coronavirus that infects wild bats, which later spread to humans. Initially reported by Chinese authorities as a “viral pneumonia”, the World Health Authority (WHO) decided otherwise and declared a public health emergency in January 2020 and announced a global pandemic in March.

The speed of infection took health authorities by surprise — less surprising was the cause. Scientists had been warning for some time that the increase of infections from animals to humans is directly linked to the massive destruction of wildlife habitats across the world. Marie Quinney of the World Economic Forum (WEF) described the pandemic as a “stark reminder of our dysfunctional relationship with nature”.

“We have lost 60% of all wildlife in the last 50 years, while the number of new infectious diseases has quadrupled in the last 60 years. It is no coincidence that the destruction of ecosystems has coincided with a sharp increase in such diseases,” she added.

Lockdown rules

The spread of the disease caused massive disruption globally. Here in the UK, environment regulators were forced to prioritise their duties following government lockdown. The Environment Agency (EA), which was already short-staffed due to funding cuts, had to prioritise pollution incidents and flooding over site visits and inspections. Emissions monitoring and water sampling rules were relaxed, and businesses were allowed to store more waste on site because of disposal restrictions during the pandemic.

Local authorities also struggled due to a sharp rise in household waste during the lockdowns, with many civic amenity sites closing. Fly-tipping was up 300% in some areas following the closed recycling centres because of the risk of spreading infection. At the same time, commercial waste arisings plummeted as pubs, shops, cinemas and other businesses were all forced to close during the pandemic.

Paradoxically, the lockdowns did deliver some environmental benefits. Earth Overshoot Day — the date each year when humanity's demand on the Earth’s resources exceeds what it can regenerate in a year — was actually delayed by three weeks because of reduced demand on Earth resources.

Air quality also improved in the UK and elsewhere. Lockdowns led to less traffic, as cities, normally clogged with traffic jams and tailbacks, meant nitrogen dioxide emissions fell by up to 50% in some areas. Levels of particulate matter (PM2.5) also fell, with initial estimates showing reductions of between 5–24%. Some areas sustained improved air quality after the lockdowns, as more commuters turned to cycling and walking as an alternative to public transport and private vehicles. But as restrictions eased over the summer, pollution levels started to rise once again.

Climate change talks cancelled

Global disruption caused by the pandemic meant crucial climate change talks (COP26) had to be postponed for a year. The UN Biodiversity (CBD COP 15), which was to be held in China in March, was also rescheduled for 2021. Ironically, one of the key items on the Biodiversity agenda was the devastating destruction of natural habitats and the evidence linking wildlife to human infections.

CBD COP 15 will now take place in May 2021 followed by COP26 which will now go ahead in Glasgow November 2021.

A green industrial revolution and the new normal

Lockdown measures have plunged markets into chaos with global growth in 2020 recording its weakest pace since the global financial crisis a decade ago.

Global warming is also heading in the wrong direction. The Met Office Hadley Centre recently announced the warmest 10 years on record, with 2020 likely to be one of the warmest ever.

The combined effect of a global economy in freefall and the consequences of climate change — severe storms, prolonged droughts and wildfires — has forced governments to rethink ways to better manage future growth.

In the UK, the Chancellor, Rishi Sunak, announced a multi-billion pound package of measures to support net-zero emissions target and to boost biodiversity, including carbon capture, green heat networks, climate change agreements and funding for electric vehicles. The plan was welcomed by most commentators, but others criticised the £27bn road improvement plan, which they argued would cancel out some of the carbon reduction benefits.

The Committee on Climate Change (CCC), which had earlier cast doubts over the UK’s ability to meet forthcoming carbon budgets, also said the funding package did not measure up to the challenge. According to the CCC, the Government needed a more focused investment strategy to accelerate the transition to a low-carbon economy and improve our climate resilience.

In July, the Chancellor announced a further £3bn package to help stimulate a green recovery, including £2bn to set up a Green Homes Grant (GHG) with £1.5bn delivered through energy efficiency vouchers and up to £500m of support allocated to English Local Authority (LA) through the Local Authority Delivery (LAD) scheme. A further £1bn will be used to retrofit schools and hospitals, and improve energy efficiency in public buildings. A further £350m was allocated to cutting emissions in heavy industry, construction and transport, which the Chancellor said would also create new green jobs.

Building back greener

Momentum is building for a greener economic recovery. In October, the Prime Minister, Boris Johnson told the “virtual” conservation Party Conference that the coronavirus crisis was “a catalyst to make the UK the world leader in clean power generation.”

Central to the government’s plan is a new green industrial revolution. The £12bn ten-point plan includes the measures above but also includes additional funding to expand offshore wind energy, and upgrade ports and factories to build and transport the next generation of turbines.

The plan also includes funding for electric vehicle production, carbon capture and storage, and support for a new generation of nuclear power stations. The ban on new petrol and diesel car sales has also been brought forward from 2035 to 2030. Specific measures to protect the environment and plant more trees are also included in the package.

Environment Bill and other measures

Meanwhile, back in the “socially distanced” House of Commons, the Environment Bill finally resumed its passage through the Parliament. The legislation builds on the Government’s 25 Year Environment Plan and introduces legally binding targets for air quality, nature restoration and protection, water and resource management, and improvements in waste management, including a target to recycle 65% of municipal waste by 2035. A circular economy package is also included in the government’s Resources and Waste Strategy which will be legislated through the Environment Bill.

The bill has been broadly welcomed by businesses and environmental organisations, but concerns remain. For example, breaches in environmental laws that are currently enforced through European courts will be handled through a new Office for Environmental Protection (OEP).

The OEP will have powers to investigate complaints and potential breaches of environmental law. But there is concern amongst some MPs and others that the OEP may not have the powers or the independence to hold the Government to account on its legal obligations.

Earlier this month, MPs gave their backing to environment secretary, George Eustice’s choice of Dame Glenys Stacey as the preferred candidate for Chair of the OEP. Stacey’s previous roles include Chief Inspector of Probation and chaired an independent review into farm regulation at the request of Former Environment Secretary Michael Gove.

Brexit trade deal

The UK and the EU have finally reached an agreement over future trading arrangements, after four and a half years of negotiations. The agreement was finalised on Christmas Eve, leaving very little time for Parliament to debate the arrangement before the 31 December deadline.

Much remains to be discussed and businesses are still digesting the finer detail of what the deal means in practice for future trading with European customers, particularly on regulations and international agreements. Environmental regulations for businesses will remain broadly the same as they are now. Some key factors that will affect businesses include the following.

REACH: the UK has left European Chemicals Agency and established an independent regulatory framework which started on 1 January 2021. The UK chemical industry exports around 50% of chemicals to EU Member states, and over 70% of chemicals are imported from the EU. The UK Chemical Industries Association (CIA) and others have raised concerns over data sharing and transposing REACH into UK law following withdrawal from the EU.

Emissions Trading Scheme (ETS): the UK Government and Devolved Administrations has established a UK-wide ETS to replace the current EU ETS, which will apply to energy intensive industries (EIIs), the power generation sector and aviation. Under the scheme, the EA will retain the structure of the existing EU ETS charging scheme but with three additional subsistence charges for UK ETS installations. Full details of all the proposals are outlined in the consultation document which is open for comment and available here.

The UK Government has confirmed it will maintain environmental standards and international obligations, and existing EU environmental laws will also continue to operate in UK law now the transition period has ended. The following will also continue:

  • the UK’s legal framework for enforcing domestic environmental legislation by UK regulatory bodies or court systems

  • environmental targets currently covered by EU legislation: they are already covered in UK legislation

  • permits and licences issued by UK regulatory bodies.

All references to EU legislation and regulatory powers have now been transferred from EU institutions to UK institutions. Existing international agreements and obligations will continue to be upheld.

2021 and beyond

The Environment Bill, which will drive through the government’s plans for “green industrial revolution”, is expected to have its report stage and third reading early in the new year.

Beyond that, businesses will need to start preparing for more ambitious plans to drive the UK’s legally-binding commitments for net zero by 2050, compared to 1990 levels. The transition is already underway with new plans for at least 68% reduction in greenhouse gas emissions by the end of the decade.

Expect more regulations on energy efficiency electrification, particularly of transport and heating, and a major expansion of renewable and other low-carbon power. Hydrogen is likely to play a key role in servicing energy demands for some industrial processes and other energy-intensive applications.

Carbon capture and storage (CCS) will be encouraged, together with bioenergy (for GHG removal from the atmosphere), and very likely for hydrogen and electricity production.

The push for more efficient use of resources will also see the concept of a circular economy take hold, partly to reduce resource consumption and reduce waste, but also to enhance productivity across industry, as the UK seeks to increase its prominence in global markets, without the support of the EU.

Future-proofing will be a challenge for businesses, as many learn to adapt to the post-Brexit and post-pandemic “new normal”. Upskilling existing staff and recruitment will be key factors in this process, particularly among younger generations who see sustainable business practices as a prerequisite for their career development.

And finally, the tragic death of nine-year-old Ella Adoo Kissi-Debrah, due in part to illegal levels of nitrogen and other pollutants in urban areas, is a stark reminder of the urgent need to tackle pollution. Expect more pollution restrictions in the coming years.

Gearing up for the Prime Minister’s green industrial revolution is more than just aiming for net zero, it’s an opportunity to seize the moment to protect human health and the environment, and plan for a better, more sustainable, future.