The Folly of Starmer’s Surrender Summit – Not so Much ‘Ruthlessly Pragmatic’ as Cravenly Sycophantic – Watts Up With That?

From Tilak’s Substack

Tilak Doshi

When the first post-Brexit UK-EU summit to be held in London today was announced in February, UK Minister for the Constitution and European Union Relations Nick Thomas-Symonds said that Britain will be “ruthlessly pragmatic” in talks to “reset” its relations with the EU. Most Britons are not holding out for much ruthless pragmatism of any sort from a Labour Government led by a Europhile Prime Minister who called for a second Brexit referendum. British citizens are resigned to ever greater convergence with Brussels across food standards, fishing rights, defence and energy at what is being dubbed today’s “surrender summit”.

As Britain navigates its post-Brexit future, Chatham House recommended on Thursday that the UK should link its carbon market with the EU’s Emissions Trading System (ETS). It cited a letter signed by more than 50 companies and business groups that called for the convergence of carbon prices between the UK and EU that will “help curb costs for consumers”. Currently, carbon prices in the UK scheme trade around $10/ton cheaper than in the EU. The research institute considers this a matter of priority for the UK to be exempt from the bloc’s Carbon Border Adjustment Mechanism (CBAM) – a tax based on the carbon content of imported goods – which would apply initially to imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen.

According to Chris Aylett, Research Fellow at Chatham House, “failing to align with the EU on a key climate policy tool will be costly for UK industry and stifle investment in the energy sector”. Alas, Mr. Aylett has it precisely backwards. Joining the EU’s ETS can only mean that the UK, like the EU, will consign itself to further de-industrialisation and an energy sector that is even less fit for purpose than it already is.

The EU ETS: A bureaucratic burden, not a trade solution

The EU is intent on implementing the world’s first tax on the carbon content of imported goods from January 1st, 2026. The ostensible purpose of this tariff is to prevent European industry from being undercut by less expensive goods made in countries that do not share the EU’s obsession with climate change and therefore have not adopted their draconian climate rules.

An early analysis on the impact of the EU ETS when it was first announced found that Russia, Turkey, Ukraine, India and China will be among the most effected by the CBAM. The BASIC countries (Brazil, South Africa, India and China) all expressed “grave concern” with the EU’s CBAM plan when it was first announced and warned of potential WTO challenges or retaliatory tariffs.

The complexity of the Brussels-concocted plan ensures that exporters to the EU will have their work cut out. Exporting firms will have to document detailed carbon audits on their emissions which would include calculating the percentage of emissions that are already covered by carbon taxes elsewhere (domestic and for imports which go into manufacturing the exports). If these complex and expensive analyses are beyond the compliance capabilities of firms, especially for small and medium-sized businesses, the EC will unilaterally establish carbon tariffs on the basis of the dirtiest 10% of European producers of the same good.

Linking the UK ETS with the EU’s would exempt UK exporters from CBAM levies, thereby easing trade barriers. But the CBAM risks violating World Trade Organization (WTO) rules on non-discrimination and national treatment. By rejoining the EU ETS, the UK will become embroiled in disputes with its trading partners. The UK will risk its recently concluded trade deals with India and the US. These deals signal a pivot to vibrant markets. Why chain Britain to an underperforming EU – a sinking ship – when it can sail onwards to global opportunities?

The EU originally announced its carbon tariff scheme in 2021 when it seemed that there was a broad transatlantic alliance intent on setting up a “climate club” combining the markets of the US under the climate-focused Biden administration and Europe together with close allies like the UK and Canada. To mitigate the problem of “free riders” – primarily, developing countries outside the OECD – the climate club would establish an incentive structure that penalized nations that did not play by the climate rules of “decarbonization” and “Net Zero by 2050”.

This alliance has been upended by the Trump administration which shares little enthusiasm for the EU’s green crusade and has exited the Paris agreement. The US Trade Representative stated recently that “the EU’s Carbon Border Adjustment Mechanism (CBAM) imposes costly verification measures and could reduce US exporters’ advantage in the EU market over high-emissions competitors, namely China”.

Joining the EU ETS plunges the UK into a bureaucratic quagmire. The EU ETS has faced criticism for its exemptions and free allowances granted to certain industries, particularly those with strong lobbies in Brussels. For instance, the steel sector – despite being a major source of CO₂ emissions demonized by the climate zealots – has been shielded from a tightening of the ETS. The EU’s free emissions allowances for favoured producers make the CBAM, according to one analyst, a “horribly complex, legally questionable, and politically explosive instrument”.

Aligning with it would subject UK firms to EU regulatory oversight, potentially including European Court of Justice supervision – a red line for Brexit voters and the increasingly popular Reform UK party. Why surrender this sovereignty for marginal trade relief when the CBAM affects only an estimated 3% of EU imports? Moreover, the EU’s economic malaise – stagnant growth, high energy costs and industrial decline – makes ETS linkage a losing bet. Tying the UK to this underperforming bloc would stifle any hope of the UK’s economic revival.

The energy transition: a foolish quest against economic reality

Chatham House’s case for Britain to rejoin the EU ETS hinges on the “energy transition” narrative, portraying Net Zero by 2050 as an economic and moral imperative. This is a delusion, as both the Conservative and Reform UK parties have declared. Given global energy realities, the Net Zero goal is not only unachievable but undesirable. Even Tony Blair opined that trying to reach Net Zero by 2050 is “doomed to fail” although he has now retracted this straying from the approved climate narrative.

The EU’s climate club assumes a world racing toward decarbonization, yet most nations (now including the US) are prioritizing economic growth boosted by fossil fuels. The UK’s own energy transition is faltering. According to a recently published report by the Renewable Energy Foundation, the UK spent approximately £220 billion (in 2024 prices) on renewable energy subsidies from 2002 to the present. The annual subsidy cost is currently £25.8 billion a year and now comprises about 40% of the total cost of electricity supply in the United Kingdom.

In a recent interview, independent energy consultant Kathryn Porter stated that people “have been sold a fairy tale about renewables making their bills cheaper”. Depending on natural gas, even with the high prices during 2022 caused by the outbreak of the Ukraine war, would have still saved the country £220 billion, equivalent to £8,000 per household. Without the drive for decarbonization and so-called “cheap renewables”, the cost of electricity supply in the UK would now be 40% less.

The EU’s Net Zero obsession, embodied in the ETS and CBAM, constrains energy use to the detriment of economic vitality. Germany’s deindustrialization, with firms like BASF relocating to Asia, exemplifies this. Post-Brexit UK cannot afford to inflict this wound on itself. Its industrial heartlands – steel in Port Talbot, manufacturing in the Midlands – are already in ruins. Reform UK’s critique of Net Zero as “economic suicide” resonates here: why prioritize a green mirage, shackling to EU carbon prices that raise production costs, when global competitors like the US, India, and China embrace energy abundance?

Conclusion: a pragmatic rejection of Europe’s climate folly

Britain’s post-Brexit path should indeed be one of ruthless pragmatism – free from EU constraints and open to global opportunities. Joining the EU ETS, as Chatham House naively proposes, would reverse this progress, binding the UK to an underperforming EU and an ideological Net Zero agenda. Britain must reject this fool’s gold and chart its own course, fuelled by realism, not green dreams. Closer economic relations with the US, India, and APEC economies, not the EU’s sinking climate club, offer a pragmatic path for a prosperous future.

The EU’s CBAM, far from a trade necessity, is a protectionist gambit facing WTO challenges and global backlash. The UK’s trade deals with the US and India, and potential APEC partnerships, offer access to growing markets unburdened by climate tariffs. The energy transition, a quixotic quest to constrain energy use, defies the global reliance on fossil fuels now championed by Trump.

Far from securing economic advantage, tethering the UK to the EU ETS would shackle it to a declining economic bloc, undermine its newfound trade agility and commit it to an unachievable and undesirable “Net Zero by 2050” agenda that prioritizes ideological conformity over prosperity. Britain’s pragmatic path lies in rejecting Europe’s climate club and embracing global trade opportunities powered by realistic energy policies.

This article was first published in The Daily Sceptic

The Folly of Starmer’s Surrender Summit – Not so Much ‘Ruthlessly Pragmatic’ as Cravenly Sycophantic

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