Brexit: What does it mean for the advanced bioeconomy?

June 24, 2016 |

Scotland: The Auld Alliance Redux

Scottish First Minister Nicola Sturgeon said that a re-vote on Scottish independence is “highly likely” following the Brexit vote, but cautioned that her government will first wait to hear the European Union’s response, and would have internal discussions before pressing for a new referendum on independence. Sturgeon said that clearly circumstances had greatly changed since 2014.. The legalities of that will also await a new government — but with 62% of the Scottish people voting to “Remain” and the Scottish National Party in office, count on a strong push for a new poll, and soon enough.

Scotland was allied with France for centuries (The Auld Alliance), and had significant independent economic ties to the Netherlands and Flanders, before the Scottish and English kingdoms were unified under the Stuart dynasty.

More fallout in Ireland and Gibraltar

Meanwhile, Spain has indicated that it will seek co-sovereignty with the UK for Gibraltar in the near term and sole sovereignty as an end goal. And Northern Ireland’s deputy leader, Martin McGuinness, said that a poll should be held on reuniting all of Ireland. Both the Irish Prime Minister and Northern Ireland’s First Minister swiftly tossed cold water on the proposal, both saying that there were more important priorities in the coming days. Strong majorities in Gibraltar and Northern Ireland voted with the “Remain” camp.

More countries out of the EU?

Not all that likely and not all that soon, but possible. This Ipsos poll, taken well before the stunning Brexit vote, showed significant anti-EU votes in France and Italy. There may well be a rise in anti-EU sentiment following the UK’s decision to withdraw.

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The Big Bioeconomy Impact

More emphasis on protectionist policy and trade development, less on climate and environmental factors.

As we reported last spring, the National Farmers Union has been encouraging European parliamentarians to vote against biofuels reform, saying legislators have been bullied into the deal by environmentalists and social pressure groups. The NFU is touting not only emissions benefits, but reducing Europe’s reliance on imported protein for animal feed, a byproduct of biofuel production.

We see it as a wave of international grumbling against open borders and trade liberalization — given that trade deals allow nations to game their way into massive increases in exports by keeping a lid on their currency values — at the expense of domestic industry. We’ve seen the grumbling that comes from, for example, China’s devalued currency. Yet, currency unions that overcome this gaming can get fouled up when different economies have different spending and debt policies — they can’t stimulate themselves into growth via devaluation — and we get problems seen last year in Greece with Grexit.

The solution is “ever-closer union” – coordinating policies, trade flows, people flows, and currency at a single international level — and that runs into stiff opposition on ideological grounds, and immigration issues raise their ugly head as poorer people flood into richer countries.

As we tipped in Knock on Wood: Why Trade and Brand will Trump Tech, earlier this week, protectionism is on the rise, though big banks, big government and big corporates hate it.

RED and EU policy

Renewable energy targets come under the EU’s overall Renewable Energy Directive (RED), and that’s up in the air now in terms of how it will apply in the UK going forward.

As we reported only last week the Low Carbon Vehicles Partnership has told MPs on the energy select committee that introducing E10 is the only way to meet the EU’s Renewable Energy Directive targets by 2020, despite concerns of higher pump prices and as many as two million older make cars potentially having problems with the fuel. Experts think that E10 could cost an extra pence per liter at the pump, adding $58 to family fuel expenses per year.

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