EU Leadership in Energy and Environmental Governance

Global and Local Challenges and Responses

Jakub M. Godzimirski, Jakub M. Godzimirski

• Publisher: Palgrave Macmillan
• Year: 2016
• ISBN:
  9781137502766
• Topic: Politics & International Relations
• Subtopic: Trade & Tariffs
• Index: Politics & International Relations

This edited collection focuses on the impact of the changing global distribution of power on the EU's energy policy and ability to project its approach to energy-related issues abroad. It maps the EU's changing position on global energy, the impact of various factors on its energy policy, and its relations with Russia, China, the USA and Brazil.

Part I

EU Energy Policy at Work

1

Defining and Projecting EU Energy Policy

Caroline Kuzemko and Amelia Hadfield

Introduction

What is EU energy policy – and how successful is the EU in projecting it? Of course, posing questions about the nature of EU energy policy presumes that the EU has a collective energy policy. This has been a slowly emerging and contested area of EU competence – certainly in comparison with other sectors. The question of what EU energy policy is can be answered by pointing to the three ‘pillars’ that have historically constituted the objectives of EU energy policy: climate-change mitigation, energy supply security and establishing competitive, integrated markets (EC 2013a). EU energy policy might in this way be explained as the application of various strategies and instruments, and the establishment of institutions, in pursuit of these three objectives.

Understanding the nature of these strategies, particularly in light of the new dimensions of energy policy outlined for the 2015 European Energy Union (EC 2015), requires digging a little deeper. In this chapter, we do so by using an approach that places political ideas and power at the core, to reveal the complexities and internal contradictions within energy policy. We find that there is currently too much unresolved internal contestation to be able to provide simple answers as to what EU energy policy represents for the myriad of actors involved in constructing it, and the many more who are affected by its outcomes. Energy policy objectives are not necessarily complementary – for instance, more radical climate and geopolitical ideas about energy policy may pose challenges to market-liberal energy policies as well as to the establishment and maintenance of a collective EU competence in energy. As will be shown, these internal contradictions have implications also for the EU’s ability to project its energy policy, internally and externally.

EU energy policy: economic liberalization and peace

Efforts to establish energy policy at the EU level have had a long and somewhat mixed history. Indeed, establishing common ground between countries on energy has historically been a tall order. The geographic location of valuable fossil fuels within distinct state boundaries has long produced political tensions within international trade and relations, often making energy an issue of national security. The result has been a number of conflicts associated with asserting rights of access to energy sources (mainly oil) as well as an historical splitting of countries into various categories, such as producers and consumers of fossil fuels. The difficulties in establishing multilateral or regional common ground have also been exacerbated by historical, and current, tendencies for energy to be understood as an important public good and/or as a national asset – indeed, state sovereignty over natural resources has long been protected by the UN Charter and by international law. Such laws have been further reinforced through international arrangements like the UN Convention on Subsea Rights and exemptions for natural resources from WTO trade rules (Behn and Pogoretskyy 2012).

Within this context, the slow EU start in finding common ground might actually appear relatively positive, even though solving issues of national versus EU multilateral energy policy remains a thorny issue even today. After the Second World War, in the period of European reconstruction and peace building, the 1951 European Coal and Steel Community provided an essential building block for the European Economic Community (EEC). In this period the focus was on creating an identity founded partly on the overt rejection of power politics, which had historically so brutally split Europe, through the pursuit of peace via the establishment of international norms (Haukkala 2005: 2). With regard to energy specifically, however, this agreement did not extend beyond coal, nor was it much more than a social assistance instrument that was to help to put an end to coal production in Europe (Buchan 2009: 6). This partial agreement on coal can be understood within the context of its dwindling strategic importance as a source of energy during the ‘century of oil’. The other EU energy agreement, the 1957 Euratom Treaty, was challenged by member states that questioned EU legal competence in the area of reactor safety. The issue was settled in 2002, nearly 50 years later, by a European Court of Justice ruling (ibid.).

EU energy policy and the liberalization agenda

In retrospect, we can see that the 1980s and 1990s were the most fruitful years for the EU’s collective strategy, as evidenced by the establishment in 1986 of the Single European Act and the 1992 Maastricht Treaty. Furthermore, in a continuation of the EU’s earlier vision of itself as a normative peace project, the Charter of Paris made ‘economic liberty’ and positive economic interdependence underpinned by rules and norms the basis of the newly emerging post-Cold War order (OSCE 1990). The EEC had found itself on the ‘right’ side during this period when the end of the history of ideological contestation was claimed. It became widely accepted that other political models had failed, as shown by the fall of the Soviet Union, and that market liberal ideas were intrinsically superior (ibid.). The EU’s position within the emergent liberal paradigm meant that it could assume a degree of knowledge authority and associated soft-power possibilities (Kuzemko 2014a).

The EU, however, was not able to extend market liberal rules fully to energy or to establish its competence in energy through the Single European Act or the Maastricht Treaty. Gas and electricity markets remained dominated by monopoly players, many of which were state-owned, and a great many physical barriers to trade persisted between member states. This is not to say that progress was not being made – there were various attempts to bring energy into the EU’s liberalization agenda, and thinking about how to govern energy and to deliver energy objectives was shifting. From the late 1980s onwards it was increasingly understood that energy security would be a natural outcome of the creation of a liberalized, competitive and integrated market (CEC 1988; EC 2011: 4; see also McGowan 2008: 94). This is what has been referred to elsewhere as the liberal model of energy security (Youngs 2011: 47; Kuzemko 2013: 17–18). Integrated, liberal markets were also seen as being more conducive to the EU maintaining its international competitive position (Buchan 2009: 5). In 1988 the primary objective of EU energy policy was therefore ‘greater integration, free from barriers to trade, of the internal energy market with a view to improving security of supply, reducing costs and improving economic competitiveness’ (CEC 1988: 2).

The three internal energy policy packages/liberalization directives, adopted in 1996/98, 2003 and 2009, sought to implement policies and institutions that would be capable of delivering on the new energy policy objectives. The packages were based mainly on the provisions of the internal market (Tosun and Solorio 2011: 2); and, in the absence of an Energy Directorate General, they were largely the work of the Competition Directorate (DG COMP). DG COMP was also most active in implementation, often by threatening member-state governments with EC Treaty competition rules (Eikeland 2011). Although progress has been slow compared to liberalization in other sectors, and various member states have either objected to market liberal rules or have failed to enforce them, it can be claimed that the direction of EU energy policy has been towards establishing competitive, integrated markets and that each package has extended the reach of the Commission (McGowan 2008; Eikeland 2011). The first and second packages together allowed for regulated third-party access to transmission and distribution, the legal and functional unbundling of transmission and distribution system operators, a regulator for gas and electricity in all EU countries and full energy market opening. Furthermore, the third package allowed for the creation of new EU-wide regulatory institutions: the Agency for the Cooperation of Energy Regulators (ACER) and a new European network for gas and electricity transmission system operators (European Network of Transmission System Operators for Gas [ENTSO-G] and European Network of Transmission System Operators for Electricity [ENTSO-E]).

The influence of market liberal ideas over EU internal policy has also been reflected in the construction of its foreign energy relations, which have largely set the terms of reference. The EU has pursued an ongoing – and urgent – need to better ‘promote EU policies beyond its borders’ and to ‘normalise’ energy relations with third parties via liberal market rule-making (EC 2011: 4). The most significant attempt to formalize market liberal trade rules in energy was the Energy Charter Treaty (ECT) which also sought to bring the key energy producers Russia and Norway into agreement with EU rules (Hadfield 2008). The EU has also held onto the notion, with greater or lesser degrees of urgency over time, that speaking with one voice in foreign policy will allow the EU to be more influential in its attempts at energy policy transfer. These energy foreign-policy ideals have tended to echo those of other Western institutions. The shared goals of the International Energy Agency (IEA), for example, include free and open markets and trade and undistorted energy prices (Kohl 2010: 197). The World Bank and IMF have, like the EU, encouraged market-liberal policy transfer via lending conditionality and have in the past influenced the privatization and liberalization of energy sectors in a range of transitional and developing countries (de Oliveira and MacKerron 1992). As such, EU knowledge authority has been part of, and extensively supported by, a broader orthodoxy of market-liberal ideas within those elite policymaking communities that manage the Western-dominated Bretton Woods system.

The emerging climate change agenda

The EU is, of course, a multilevel organization. Besides the broad liberalization agenda, the 1990s also saw increasing levels of EU commitment to climate-change mitigation and associated strategies and policies. Unlike energy, climate change is a policy area where member states appear likely to seek a collective, EU-level response (Buchan 2009: 1). EU climate governance has been closely inter-related with international climate organizations and agreements, the Kyoto Protocol in particular. Moreover the EU perceives itself to have been a principal driver within processes of establishing international agreement on climate change as well as in setting the emissions reduction targets by the United Nations Framework Convention on Climate Change (UNFCC) (DG Clima 2014a, 2014b). The long and arduous battle to establish a common, international, climate framework included a great many compromises from the early environmental debates of the 1970s (Bernstein 2001).

Not until 1997 was it finally agreed, at Kyoto, that 37 developed countries would abide by legally binding emissions reduction targets of 5.2 per cent over 1990 levels by 2008 to 2012. Although clearly not a nation-state, the EU is accorded almost state-like, or perhaps ‘special’, status within climate protocols and energy organizations. Both the Kyoto Protocol and the IEA treat the EU as one signatory – as if it were a nation-state. This might imply a certain level of agreed motivation and expectation within the EU; in 2005 the EU did proceed first by embedding Kyoto targets within EU legislation and then by establishing a new set of targets and standards via the 20-20-20 agreement. The first EU integrated strategy for dealing with climate change, in response to the Kyoto targets, was designed only in 1998 (Giddens 2009: 193); in 2002, climate change finally became an EU key priority.

And so by the early 2...

Table of contents

• Cover Page
• Title Page
• Copyright
• Contents
• List of Tables and Figure
• Acknowledgements
• Note on Editor
• Notes on Contributors
• List of Abbreviations
• Introduction
• Part I EU Energy Policy at Work
• Part II Troublemakers and Competitors
• Part III New Energy Partnerships?
• Index