On 26 November the EU’s Energy Ministers will decide on a new climate and energy governance mechanism. This will be crucial to delivering the outcomes that these leaders agreed on last year in climate and energy policy. However, the draft of the Energy Council’s Conclusions, already published on 30 September, is a cause for concern, writes Oliver Sartor of the Institute for Sustainable Development and International Relations (IDDRI). Sartor warns that if the draft Conclusions are accepted without change, they could seriously undermine the EU’s climate and energy policy.
At the next Council of Energy meeting of European ministers on November 26, there is a small, technical item on the agenda which is the “new climate and energy governance mechanism”. This issue sounds abstract and far from the concerns of most stakeholders. It is not. It matters enormously to the future direction of European climate and energy policy. Troublingly, however, recent drafts of the Council’s conclusions are a cause for concern about the quality of this new mechanism.
One year ago, the European Council set a number of targets and objectives for the EU to achieve by 2030. These included:
- reducing emissions by 40% compared to 1990 levels
- at least 27% renewable energy in total consumption
- at least 27% energy efficiency compared to projections
- 15% electricity cross-border interconnection capacity
- strengthening natural gas security to supply disruptions
The EU must now ensure that it can deliver the outcomes that it has agreed to achieve. Crucial for doing so will be putting the right governance tools in place.
The EU is largely on track to achieve its 2020 climate and energy targets, so it is worth looking at the ingredients of this success story. The economic crisis helped, by reducing emissions and energy consumption. But the presence of legally binding national obligations supported by well designed planning and reporting arrangements also compelled national governments to deliver outcomes and implement specific measures. For instance, all but two Member States are currently on track to meet or exceed their nationally binding 2020 renewable energy targets thanks to the effective design and legal force of the renewable energy directive.
However, for the post-2020 period, there is strong opposition from key Member States to nationally binding targets. Thus, for example, the EU has agreed on an “EU-binding” renewables target. This is partly about resistance to “more Europe”; but it also reflects the fact that, as the low-carbon transition progresses, all Member States must increasingly make structurally important changes to their energy systems. Thus, they are justifiably keen to retain sovereign control over energy policy.
If the list of “key performance indicators” covers all aspects of the Energy Union, as this language suggests, it will be too long to be effective
The challenge for the EU is to recognise this reality and give some more flexibility to Member States, while still ensuring that they collectively deliver on the EU’s goals and help investors have confidence to invest. For this reason the European Commission has proposed an approach under which each Member State develops its own “National Climate and Energy Plan” to contribute to the EU’s 2030 goals. This will reflect national circumstances and competences. But the Commission will monitor progress and take action if Member States collectively fell short of the EU’s goals.
Pledges and credible commitments
Given the need for stronger national ownership of the energy transition, the Commission’s approach makes sense. However, recent drafts of the October Council Conclusions also show that it comes with risks.
First of all, the draft conclusions say that national plans will set out national “targets and objectives” to contribute to EU energy goals and that progress would be tracked based on a list of “Key Performance Indicators” (KPIs). This “list of key indicators should reflect in a balanced manner the agreed EU climate and energy targets, as well as EU energy policy objectives and agreed targets for each of the five dimensions of the Energy Union”.
However, from this language it is not clear what the degree of commitment from Member States to deliver outcomes would actually be. Are targets and objectives the Member States’ own concern and KPIs simply a way of tracking the aggregate progress of the EU as a whole? Or do the targets and objectives constitute commitments by the Member States vis-à-vis the EU to deliver outcomes? The EU needs Member States to make commitments in the form of pledges on core targets and objectives so that they can be held to account.
Furthermore, if the list of “key performance indicators” covers all aspects of the Energy Union, as this language suggests, it will be too long to be effective. A long list will create a negative political dynamic that seeks to water down the level of commitment and EU oversight of national performance. A shorter list of pledges is more likely to get high-level attention at key moments in the political process and can be more closely tracked by stakeholders to hold their national governments to account.
2050 strategies must inform 2030 plans
A second risk is that national plans will turn a blind eye to what is needed to achieve the EU’s 2050 climate goals. Achieving the EU’s 2050 climate objectives of 80-95% emissions reductions means that, by 2030, key structural transformations will need to be well advanced. Marginal improvements in CO2 and energy intensity are not enough. Think of deep thermal retrofitting of buildings, deployment of CCS in heavy industry, high penetration of electric vehicles, etc.
An excessive focus on short, synthetic and so-called “high-level” national plans ends up undermining vital parts of the EU’s existing climate and energy governance architecture
The draft Council Conclusions are not sufficiently explicit on this point. They call only for plans to have “a perspective related to the 2050 climate strategy”. They actually need to require all Member States to develop concrete and detailed 2050 decarbonisation strategies. This should build on and give more structure to their (very weak) existing obligations under the EU’s Monitoring Mechanism Regulation to develop one.
The content of these strategies should not be binding on Member States. But they are still needed to introduce concrete thinking about coherence with 2050 goals into the 2030 strategy development process at national level.
Protecting parts of the existing governance architecture
A third risk is that an excessive focus on short, synthetic and so-called “high-level” national plans ends up undermining vital parts of the EU’s existing climate and energy governance architecture. The most recent draft of the European Council’s conclusions implies that much of this governance acquis could be lost in the name of “minimising planning and reporting obligations”. There is scope for streamlining and integration, and we do need “high-level” strategies. But national planning and reporting documents must also contain a more detailed chapter that provides sufficient detail on policies, measures and projections to credibly support transparency, investor visibility, and allow for the review of the impact of EU energy legislation where relevant.
In talking of “minimising planning and reporting obligations” in favour of a “single, national plan” the EU must also be careful not to prejudge the important role of complementary legislation to national plans. For example, experience with the EU’s 2020 Climate and Energy Package shows that EU obligations to implement common minimum standards and measures has been extremely effective as a complement to high level national targets. A good example is the current Energy Efficiency Directive, which requires Member States to implement a range of basic “common sense” measures. These add up and they will help Member States to achieve their binding CO2 and non-binding national energy efficiency targets for 2020.
The EU’s new climate and energy governance mechanism should matter to all stakeholders who want to have ambitious, transparent, and reliable commitments from their national governments on energy and climate policy. The system must be allowed to evolve, but it will never work if it gets off to a false start.
Oliver Sartor is Research Fellow Climate and Energy Policies at the Institute for Sustainable Development and International Relations (IDDRI) in Paris. With colleagues Michel Colombier and Thomas Spencer he has written a working paper on Designing planning and reporting for good governance of the EU’s post-2020 climate and energy goals.