The governance beast: a guide to understanding energy union governance

Geneviève Pons is Director at the WWF European Policy Office

Have you seen the governance beast?

This mysterious creature made his debut appearance on social media last year. Best described as a cross between a goat, an eagle and a Gruffalo, each part of his outlandish body has a meaning for European Union energy and climate governance.

WWF designed the beast in the run-up to a proposal on EU energy and climate governance, which was part of a package of draft energy and climate legislation released by the Commission on 30 November 2016. The governance element is responsible for ensuring climate and energy targets are met, and for planning and reporting on progress.

It may sound dry, but getting governance right is crucial to reaching 100% renewable energy in the EU and winning our fight against climate change.

WWF’s governance beast featured all the elements we wanted to see reflected in the European Commission’s proposal. Wings for high ambition – going beyond the EU’s 80% to 95% emissions reduction 2050 target, set before the EU signed up to the more ambitious Paris agreement. Sharp claws to prevent EU countries backsliding and to ensure they get more ambitious over time. Teeth, to ensure compliance with EU targets. A big heart, to ensure a fair and just transition to 100% renewable energy. Ears for listening to stakeholders.

One of the most important parts of the beast is its eyes. For WWF, it was essential the governance proposal did not stop at 2030, but looked ahead to 2050. Longer-term climate plans are crucial for investor confidence and for avoiding stranded assets – investments which are lost, for example, in a coal plant that becomes obsolete.

In fact, in the energy sector short-term plans alone make little sense, since power plants and renewable energy infrastructure have lifetimes measured in decades. Shorter-term plans can be shaped only once the longer term strategies are in place.

When the bundle of proposed energy and climate legislation, officially entitled the ‘Clean Energy for all Europeans’ package, was actually released, we found the governance draft to be one of the stronger parts.

It is a good attempt by the Commission to bring energy and climate change together, and to put the current multitude of different planning and reporting obligations under one roof. To do this, the Commission proposes that member states develop national energy and climate plans (NECPs) up to 2030.

But the governance proposal does have weaker elements. One of these is the lack of clarity on how the Commission will enforce the already-agreed 2030 climate and energy targets for renewables and energy efficiency – the teeth of the governance beast. How will member states be encouraged to deliver renewable energy pledges that are enough to reach the EU’s goal of 27%?

Another undeveloped element is how the public and stakeholders should be involved in developing and implementing the plans – the beast’s ears.

But the main governance shortcoming concerns long-term climate planning – the beast’s eyes. For a start, it only gets a small mention.

Second, member states are asked to hand in their long-term plans in 2020 – that is, after they hand in their 2030 plans in 2019. This makes no sense. No business would ever do their shorter-term plan before the longer one.

Third, the Commission talks of 50-year plans, from 2020 to 2070. For NGOs and politicians alike, 2070 is too far away to be meaningful, and an invitation to put off prioritising climate ambition. The best timing would be for 30-year plans, up to 2050, as EU countries are already working to that deadline and we know that the EU must be fully decarbonised by then at the latest. 2050 is close enough to provide a clear direction for the 2020-2030 period and to have an impact on decisions today, while still providing a longer-term vision for businesses and society.

A fourth drawback is the lack of guidance from the Commission on what should be included in the 50-year (or preferably 30-year) plans. WWF is running an EU LIFE-funded project called MaxiMiseR, which focuses on making long-term climate plans as good as possible.

Compensating for the lack of clear information from the Commission, MaxiMiseR will soon produce its own guidance on what should be in a longer-term plan or strategy. Elements like regular review and monitoring, stakeholder engagement, high ambition and integration with other parts of the economy are all as important for long-term plans as they are for the 2030 national energy and climate plans of the governance proposal. All these areas were assessed by MaxiMiseR when it ranked member states’ current long-term climate strategies – and found that there was much to be improved.

Clearly, if we were to redraw our governance beast today to reflect the Commission’s proposal, it would be simpler than the original design. Some body parts are smaller than they should be. The wings of ambition would be tiny, for one, so the beast would be flightless.

But interestingly the Commission has now created its own governance beast. Inspired by WWF’s effort, the Commission produced an Energy Union governance ‘firefly’ to show the elements of its proposal. Some of these appeared to match ours, such as wings for ambition and eyes to look to 2050. Yet the design does not yet match the reality: the firefly needs to grow some more beast-like elements – such as teeth – to be up to the job.

The next two years are a chance for the EU member states and the European Parliament to beef up the weak body parts and improve the governance proposal. We will be following the process closely to ensure this key policy proposal is improved during the negotiations, particularly when it comes to long-term climate plans, stakeholder engagement, and enforcement of energy and emissions reduction targets.

Getting Energy Union governance right is about more than a funny ‘beast’. It will make meeting our energy and climate targets much more likely, and reduce the costs to consumers of doing so. It will ensure we live up to our commitments under the Paris agreement. And it will help Europe remain a climate leader, playing its role in the fight against climate change.