Ambitious climate policy through centralization? Evidence from the European Union

Abstract

Finding the right balance between centralization and decentralization is a struggle as old as the European integration project itself. Centralization, defined as a shift of competences to a higher and more aggregated governance level, offers a number of advantages, including greater policy consistency and fewer market barriers and competitive distortions. However, it also comes at the price of reduced flexibility to accommodate national circumstances, which in turn can undermine domestic political support. As the evolution of climate policy in the EU illustrates, the degree of centralization does not necessarily correlate with the level of policy ambition with respect to climate protection. Tracing the role of centralization debates in the context of emissions trading and of policies to promote renewable energy, this article shows shifting preferences about centralization over time, and attempts to explain the causes of these changes and their implications for climate policy. It also addresses a recent trend towards greater regional cooperation, which is reflected in the emerging notion of a European Energy Union. But it also concludes that generalizations about the impact of centralization – or a lack thereof – fall short of the nuances in each individual case.

Policy relevance

Following its recent enlargement, and faced with changing economic and political circumstances at the national level, the EU must once again confront difficult questions about the adequate balance between centralized and decentralized approaches as it seeks to operationalize the climate and energy targets for 2030. The need for greater ambition in climate protection, unilateral measures taken by Member States to induce greater greenhouse gas mitigation in the power and industry sectors covered by the EU Emissions Trading Scheme, divergent strategies to stabilize electricity markets as these integrate growing shares of variable renewable energy sources, or the ongoing discussion about a European Energy Union all underscore the need for improved understanding of the implications of centralization. This article draws on past experiences with central climate and energy policies to explain factors affecting the decision for or against centralization, as well as the effects of such decisions.

Keywords:

• Centralization
• climate policy
• decentralization
• EU ETS
• European Union
• member states
• national policies
• renewable energy

Acknowledgements

The research contributing to this article was supported by the European Union under FP7 Grant ENV.2012.6.1-4: Utilising the full potential of economic instruments to achieve the EU’s key greenhouse gas emissions reductions targets for 2030 and 2050 under the grant agreement number 308680. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the following information. The views expressed in this publication are the sole responsibility of the authors and do not necessarily reflect the views of the European Commission.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Michael Mehling http://orcid.org/0000-0001-5167-6551

Notes

1. Likewise, one and the same Member State might be in favour of centralization in one area of climate policy, while opposing ambitious European action in another area; for example, Germany supported the more centralized approach of three European targets in the context of the 2030-climate-and-energy-debate, but strongly defended its national approach regarding the renewable energy support scheme against the European DG Competition – taking the conflict to the highest political level.

2. These targets set three key objectives for 2020: (1) a binding 20% reduction in EU greenhouse gas emissions from 1990 levels (with binding Member State specific targets); (2) a binding increase of the share of EU energy consumption produced from renewable resources to 20% (with binding Member State specific targets); (3) an indicative 20% improvement in the EU's energy efficiency.

3. After the successful outcome of the Paris Climate summit in December 2015 with its Paris Agreement (FCCC/CP/2015/L.9), this line of argument could be used in favor of ambitious action.

4. For a more comprehensive overview and analysis of EU climate governance, see, for example, Jordan et al. (2012), pp. 43 et sqq.; Schreurs and Tibergien (2007), pp. 19 et sqq.

5. Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC.

6. Directive 2004/101/EC of the European Parliament and of the Council of 27 October 2004 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in respect of the Kyoto Protocol's project mechanisms.

7. Some argue, however, that the primary goal of this measure is to raise revenues (Burke, 2014).

Additional information

Funding

This work was supported by the Seventh Framework Programme [grant number Grant ENV.2012.6.1-4, Agreement n° 308680].