European Union

The Soft Power Failure of the EU: Russia walks off — Michael LaBelle (Ep 51)

Russia walks off – Michael LaBelle

This week Michael LaBelle provides a rough description of why the EU has lost its soft power.

Rising gas prices, the military aggression of Russia, and rule of law breaches in former Communist states are heralding a new era for the EU. This ‘post-acquis’ era is marked by rising nationalism and populism which undermine the foundation of the EU’s soft power.

The question that needs to be answered is, ‘Why did the EU lose its soft power?’ This question cannot be answered without including the hard power of NATO.

The Post-Cold War environment saw NATO’s eastern expansion, which is now questioned by the hard military might of Russia. The expansion of democracy in former communist countries, once represented by EU membership, represents a new socio-political system expressing soft power. At the same time, the hard power of NATO also went East. Jointly, these institutions now are perceived to threaten the borders and sovereignty of Russia.

The EU has been slow, and even incapable of acting against its own member states who have discounted the democratic norms which are the foundation of the European Union. The EU’s soft power derives from a descriptive cultural experience of individual liberty and respect for human rights. The Cold War-era institutions of the Helsinki Commission, European Court of Human Rights, and others symbolize a common pursuit of both the Soviet and Western countries to establish common rights within Europe. Now, these institutions are sidelined as nationalists and populists reclaim sovereignty given over to these Cold War institutions, including the EU.

The EU’s Single Energy Market (SEM) was built and functioned as a place for companies and governments to ‘come and play’ (as Goldthau and Sitter state). Money could be made by neighboring countries selling gas and electricity by the rules within the SEM. However, over time, as competition and neoliberal rules took over from national governments’ long-term agreements with Russia, participation in the EU’s SEM was not a favorable place to play.

Gas is now near-enough, thanks to LNG and new pipelines, a global commodity. Russian gas is breaking the Soviet gas bridge and finding alternative buyers. For most companies and countries wanting to play in the SEM, there are other places to sell their gas. During the Cold War, gas was more than a commodity, it was a tool to build relations between the Soviet Union and Western (and even Eastern) countries. And to transfer money and technology. This was soft power at play. The Western European countries were attractive for their cash, knowledge, and business relations that could be developed over time (as described by Thane Gustafson in his book, The Bridge). Thus, gas, while a commodity was also a relational tool creating trust and commerce between two different political-economic systems.

The downgrading of gas to a mere commodity overseen by market rules and regulations favoring consumers, means producers are no longer incentivized to participate in a market that has strings attached. The SEM is described by scholars Goldthau and Sitter, as a soft power tool with a hard edge. Meaning the market is attractive to foreign and domestic entities who will play in the market, but there are hard rules and regulations which dictate how participation is done. For Russia in 2021 and 2022, participation is defined as satisfying contractual commitments, but not sending higher levels of ‘free’ gas to participate in the market.

The EU’s soft power is also undermined from within by member states. The growth of populism and nationalism delivers scathing blows against the legitimacy of the European project. NATO was a product of the Cold War – expressing hard power. But the EU is a product produced from World War Two seeking stability and being founded on a common platform of not only economic union, but also political and social union to prevent war between European countries. Therefore, the EU cannot be defined only through rules, regulations, and legislation, but through social and political norms that perceive democracy and individual liberty as foundational to society.

Breaches of the rule of law perceived to be happening in Hungary and Poland, and staggered efforts by the EU to reclaim a semblance of democratic norms in these countries, demonstrates an overly prescriptive governance system unable to have soft social and political norms genuinely accepted by these governments. For these two countries and others, negating the acquis that guided their EU membership by conforming legislation and social systems to an EU norm, meant sacrificing Communist practices of non-market economies and social control. Clearly, these historical practices have not disappeared.

In a post-acquis era, returning to Communist top-down political management appears to be the best way to deliver low-cost energy and societal control. There’s little space for fair elections or expression of individual rights. While the hard power of Russia may not appeal to the Polish government, the nationalistic and populistic tendencies are a return to a form of governance that the parties in power in both Hungary, Poland, and Russia appreciate. And, depending on how you count, over fifty percent of voters support this form. Legitimacy from the ground-up or from the top-down? For nationalists, there is no question. Why should the state be second to a multilateral governance organization preaching liberty with high energy prices? The soft power benefits that attract all three of these countries to the EU, whether the SEM or development funds, is not enough for them to give up historical practices of a nationalistic sovereign state.

Michael LaBelle

The soft power of the EU, to be attractive while also persuading partners to be democratic and neoliberal in commerce is lost. The built-up EU institutions and mechanisms, seen in the SEM or the European Emission Trading System (ETS) provide stringent rules and regulations, not all member states are willing to abide by. Add to that democratic norms, such as respect for press freedom, then membership to the EU has a high cost.

Unfortunately, for the EU, holding soft power, means you can’t kick out those that do not play by your rules. But they can choose to leave. Russia (and the UK) decided they are better off not playing by the EU’s rules. For Hungary and Poland, they decided it’s better to stay in but pay no attention to the rules. For the EU, to build back its soft power, some hard power could be useful.

January 13, 2022

Transcript of The Soft Power Failure of the EU

Building the EU’s Gas Transition with Russia — Thierry Bros (Ep 49)

Thierry Bros – Episode 49

This week we speak with Thierry Bros, he’s a professor at Sciences Po in Paris. In the introduction I use the term  ’eminent expert on gas’ and after listening to this interview you will be using this term too.

On the podcast, I try to keep introductions short but pay attention to his experience on the EU- Russian gas roundtable or his lead with the liberalization of the French gas market. I’m really honored for him to come onto the podcast to discuss his latest study done with Jean-Arnold Vinois, published by the Jacque Delors Energy Centre, titled, High Energy Prices, Russia Fights Back? In my opinion, this is one of the best reports on the current crisis in the gas market. It is direct, clear, and full of advice and information.

Thierry provides a succinct path for how the European Commission – and national governments need to navigate the current crisis and overall energy transition. He is very clear in stating, we can’t jump from 2020 to 2050. In his view, the Commission forgot this.

In this episode, we balance his perspective between the market deciding on the technologies to get us to net-zero, and governments subsidizing our way through a green transition. That is, making energy affordable to households but smoothing the volatility that is caused by phasing out fossil fuels- and the natural rhythm of commodity markets.

There is €30 billion coming from the EU’s Emissions Trading System (ETS), this money should be used to assist households with the transition and put into R&D for new technologies – not given to large corporations to fund incremental improvements.

Towards, the end we get to Russia- EU gas relations. Here Thierry’s perspective is clear: The EU Commission needs to step up and engage with Russia over Nord Stream 2 and the medium-term role of gas in the EU. He cites the disparaging treatment the EU has given towards Russia on the role of gas in the green transition. As EU suppliers dry up – like the Dutch and Norwegian fields, Russian gas is increasing its share in the EU. A long-term strategy needs to be developed to ensure sufficient investment occurs to weather the transition phase. For Thierry, he believes in the long-term viability of Carbon Capture and Sequestration (CCS).

But I would say, regardless of your view on CCS, gas is with us for the long-term, the current under investments, and high prices, like what I discussed with Adam Cyzewski, the Chief Economist of PKN Orlean, in episode 44, it is clear, jumping to a 2050 energy mix, without a deliberate strategy over infrastructure and without ensuring stable relations with gas suppliers, is not viable. Rather, a phased transition is needed that involves specific milestones and partnerships.

Thierry Bros

My suggestion is to listen to this episode and read the gas report, you’ll learn a lot about the causes and solutions to the current gas prices.

Finally, there is an incredible amount of information in these podcast episodes – just like this one – I do make the transcripts available on the My Energy 2050 website. Just as a note, I’ll be using these interviews to inform my own research, so if you are also a researcher, I suggest you check out the transcript – and even cite the episode in your publications. That actually helps my own citation scores and makes doing the podcast more fun than writing another journal article.

Finally, for comments, I suggest to jump on the LinkedIn or Twitter posts of the episodes and leave comments there. Social media is a great way to share knowledge and grow the quantity of high-quality information about how to make the energy transition a reality.

Transcript of the episode

The Clean Regulatory Transition Project — Jan Rosenow (47)

Jan Rosenow – Regulatory Transition Project

This week we speak with Jan Rosenow, the Director of European Programmes at the Regulatory Assistance Project. The word, ‘project’ as Jan tells us, was meant to be a project to assistant regulators to build better utility regulation. The project operates in China, Europe, India, and the United States.

From this episode, you’ll learn about the importance of regulation in the energy transition. Markets are not free, but depend on good (and bad) regulation to create market conditions that deliver outcomes that society wants. Of course, there is a heavy dose of politics in this mix, but the main thrust is to protect the consumer.

As Jan tells us, regulation is not just regulation implemented by energy regulators, but also comprises policies that shape the markets.

From a personal point of view, I love regulation. This will sound very odd, but one of the joys of living in the EU is we have so much regulation to study and understand the impact of both a multilateral institution, like the EU, but also the actions of governments and how they implement regulation is such diverse actions.

Jan Rosenow

I was really excited when Jan agreed to come onto the podcast to discuss what the Regulatory Assistance Project does, and to focus on regulation’s role in the energy transition. This episode delivers with both a general discussion on regulation in the first half and by the second half, we work our way through the role of regulation in the EU and the new Fit for 55 and Green Deal directives that are coming out.

However, I want to emphasize the eloquent way that Jan answers all my questions on regulation. Jan has a rare and true skill to be able to express the role of regulation plays in both abstract terms but also through examples. And I think what I’m saying here, doesn’t do justice to how he explains the importance and differences regulation plays in the energy transition. 

The energy transition requires forward-leaning regulations that both push and pull new technologies in the marketplace. In this episode, you’ll learn both how this is done and why it is done.

Transcript of our discussion

The Virtual Power of a Polish Energy Entrepreneur — Bartosz Kwiatowski (Ep 45)

Episode 45: Bartosz Kwiatowski

This week we speak with Bartosz Kwiatowski the director of the Polish Liquid Gas Association. I’ve known Bartok for over a decade and he is always a well of knowledge on the Polish energy scene and broader developments in Europe. So why is today’s episode important to listen? You’ll gain a greater understanding of the role that nuclear power and hydrogen could play in the Polish energy mix. In our discussion, we provide both a historical account of why Poland is reliant on coal and how it can transition out from coal. As Bartok points out, the dramatic increase in solar PV use in the country, or the development of energy clusters in towns contrasts the national push for coal.

Bartok has also been active in the start-up scene, trying to get a virtual power plant operating with a range of businesses. Bartok recounts the difficulty of having a small energy company – it saves energy, but it does not attract money to expand, because of its ability to save energy. Listen in, and you’ll get the account of why attracting VC funding is hard at a small scale. Towards the end, we do cover the role of liquid gas fuels – this is important when we consider how we shift people cooking and heating to using gas produced from biofuels.

In this week’s episode, we take on a range of issues providing a broader perspective of developments in Poland, but also within the EU. You’ll learn of the complexities of decarbonizing the energy system in both large and small scale projects.

Prepare for Impact: The EU’s Energy Transition — Miroslav Lopour (Ep 42)

Episode 42 – Miroslav Lopour

This week we speak with Miroslav Lopour, he is a Senior Manager of the Energy and Resources team at Deloitte Czech Republic.

We have a wide-ranging discussion about how the Czech Republic is preparing for the energy transition.  What you’ll learn from our conversation is a unique perspective on the EU’s Eastern Member States. I found Miroslav has the ability to express in a precise manner both the social and political resistance and reluctance to participate in an energy transition. As you’ll hear in our discussion about the coming electric car revolution, Miroslav articulates why there is reluctance in the country, to move away from the internal combustion engine, and even coal.

He discusses an inherent conservatism in former communist countries which makes politicians and society reluctant to fully participate in a clean energy transition. I think our conversation provides an in-depth understanding of this reluctance to change, not just in the Czech Republic but in the broader region of Eastern Europe.

Miroslav Lopour – Deloitte

If I can think of one reason you should listen to our discussion today, it is to understand why certain countries are slow on the uptake and deployment of policies and technologies that deliver a clean energy. There is justifications for why countries move slow. Understanding the reasons can assist in developing policies and help us all transition to a cleaner future – not just a few countries.

As I mentioned we discuss a range of topics, but threaded through our conversation is the difficulty to change industry and technologies. Regardless of the reluctance, as Miroslav points out, the money from the EU is here – and ready to fund the transition. Therefore the Czech Republic is about to ramp up their activities and join the transition.

I think our conversation is an important milestone. We need to revisit the expectations expressed in this interview in a few years. Let’s see if what the EU is promising in retooling industry and assisting people and regions, to move away from coal, does have a positive impact.

Russia‘s Energy Chains of Value and Power — Margarita Balmaceda (Ep. 37)

This week we speak with Professor Margarita M. Balmaceda about her new book, Russian Energy Chains (2021), published by Columbia University Press, as part of the Woodrow Wilson Center series. She was on the My Energy 2050 podcast in episode 12. And we are very grateful for her to come back for launching her new book. We managed to meet in person during her visit to Budapest this week. But as you’ll hear, our conversation moves rapidly around the issues of fossil fuels and the value chains that extend from Russia all the way to Germany.

Margarita was born in Buenos Aires, Argentina, and as her profile at, Seton Hall University states,  “her professional life has centered in the USA and Eastern Europe.” But as we know from her previous publications, on Eastern Europe, including ‘Living the High Life in Minsk’ and ‘The Politics of Energy Dependency’, in addition to numerous journal articles, she is a leading scholar on Post Soviet issues and places involving the energy sector. She is also an Associate of the Davis Center for Russian and Eurasian Studies and of the Ukrainian Research Institute at Harvard University. Overall, because of her research and insight, she should be nominated as an honorary citizen of the Post-Soviet world.

Her book, Russian Energy Chains will be the leading and most authoritative book on the subject of post-Soviet energy relations. What does that mean and why is it important?

Margarita Balmaceda

This podcast is focused on the energy transition. By having Margarita document the value flows – that is who benefits and who doesn’t of the flow of oil, gas, and coal from the Russian heartland to Europe, she documents a way of life and of profits from fossil fuel extraction. And as we address toward the end of the interview, a way of life and means of governance will be under threat as the EU and other countries implement strong policies to move away from the fossil fuel era.

The point here is the topic of understanding the value created from fossil fuel extraction, shipping and usage demonstrate – as she outlines in chapter 1 – the role of power relations in the energy system. If we hope to phase out fossil fuels, we will need to address these power relations of the old (fossil fuel) order and the new (renewable) order. Russia – and the relations between EU Member States hold a strong rooting in energy – this relationship will need to be renegotiated and Margarita’s book lays down what these relations were built on, and the areas where they could change.

Links

Profile Margarita Balmaceda – Seton Hall University (shu.edu)

Amazon.com: Russian Energy Chains: The Remaking of Technopolitics from Siberia to Ukraine to the European Union (Woodrow Wilson Center Series) eBook : Balmaceda, Margarita M.: Kindle Store

Climate Capitalism: Shifting to Green Growth – Michael LaBelle (Ep. 31)

Climate Capitalism is a model pushed by the threat of losing technological and political dominance by the loss of social support for capitalistic modes of production. 

Making Romania Fit for 55 — Radu Dudau

potential to build a strong renewable energy portfolio with a good natural environment in the Danube Delta and investor interests.  The European Commission wants to push the country towards 40% of renewables in the next few years. In short, Romania holds the potential to shift away from coal and embrace renewables.

The Life of a Global Energy Pioneer — Agata de Ru

This week we speak with Agata de Ru who is a Portfolio Manager of the South and Eastern European Region for the Clean Air Fund. In this episode, we take a different turn and go into Agata’s background of moving from a Polish NGO to Shell and then her decision to do an MBA in the United States. We learn about her experience working for a US energy start-up. We learn about her decision to leave the US behind and move to Nigeria and join up with local organizations and businesses working with farmers and delivering solar power to consumers across a number of countries.  

Before we begin, I want to give a bit some background. Agata and I have known each other for ten years. We were part of the first batch of ELEEP members. This is the Emerging Leaders in Environmental and Energy Policy Network, which began as an initiative of the Atlantic Council and Ecologic and which was funded by the Robert Bosch Foundation and the European Commission. This was a great trans-Atlantic initiative as it really brought together a range of younger people who are still in contact today. Looking back, we can say all of them have built on their ELEEP initiative to shape their lives and careers. My point is these types of initiatives that bring people together in a loosely structured way really make a difference.  

As we’ll learn from Agata, her work in Europe, the US and Africa built on her ELEEP experience. And it is here where we get to the point of the MyEnergy2050 podcast. We like to share both the knowledge and experience of people making a difference. Understanding how and why people make decisions in their lives to build a better energy system assists all of us in transforming the energy system.  

My request to you this week is to help us spread the message of the MyEnergy2050 podcast. Please share this episode or others on LinkedIn or Twitter. We grow by word of mouth. And the longer we do this, our message is becoming clearer. It takes dedication of personal commitment to build and deliver a cleaner energy system. So let’s make this happen together. 

Leaving no home unheated – Dora Fazekas

How can households afford heating and transport in a low-carbon Europe? Today we speak with Dora Fazekas, the managing director of Cambridge Econometrics in Hungary. Their consultancy just released a scenario report with the European Climate Foundation, outlining the higher costs for households if the price of greenhouse gas emissions rise.  

In this interview we cover a range of issues, such as, how understanding the different national energy practices influence how energy is produced and consumed.  

We delve into an almost anthropological view of the benefits from researching and living in the same place.  

Then we get into the research scenario report on transport and heating. The scenarios demonstrate the impact of rising prices for the European trading system for emissions. The future demonstrates the price of energy will go up. Households are foreseen to be struggling unless a greater political effort is made to assist those with lower incomes.  

My take-away from our discussion is Europe is heading for a very expensive energy system to meet its climate change goals for 2050. The burden will fall on poorer households. The warning signs are already here for national governments and the EU, action is needed to ensure households can afford this transition.  

The study provides different national comparisons and we discuss the impact in Poland and Germany. The scenarios demonstrate that coal, or even a switch to gas for heating, will be a very expensive options in the future.  

In the end, we get back to the unattractive and unexciting option of energy efficiency as the way forward.   Subsidies for energy poor households are needed. While the rich can afford the transition, it is those with meager incomes that cannot afford it. 

Here, I want to interject the importance of this topic. The scenarios are based on data and envision a future where the poor struggle to pay for heating and all their energy usage. If the EU wants to be the enforcer of climate change goals, they also need to ensure effective policies are in place. There cannot be an opening for radical populist politicians to derail, steal, or use climate change policies as a means to undermine democracy. If the stated goal is creating a zero carbon future then ensuring affordable access to energy needs to be the priority. Focusing only on price and market mechanisms will leave too many people behind and derail the effort. 

The History – and future of Energy Efficiency in Europe – Rod Janssen

In this episode, we speak with Rod Janssen, a long time expert who began his career after the oil crisis of the 1970s. Rod may have decades of experience, but he is still young and stays active with the latest research and policy developments in energy efficiency. 

I wanted to have Rod on to discuss both the recent history around energy efficiency and whether EU policy is making an impact. As you’ll hear we are a bit critical of the EU and the Member States for the lack of progress.  

There are a number of terms that will probably be new to the listener and not everyone may know them. The first is USAID, which is the United States Agency for International Development. It sounds like an organization for Africa, but it was active in Eastern Europe – and still is in non-EU member states. After countries in the East joined the EU, USAID moved on, thinking the EU would assist in development. We have a few words to say on how well the EU took on its role to promote energy efficiency. 

We discuss the ‘acquis’, which is  “the body of common rights and obligations that are binding on all EU countries”, which now is being stressed by some countries. But there was a time when the former Communist countries transformed their economies and legislation to make it look like they could be good EU members. They did a tremendous amount of good in revamping public administration and shifting economies onto a market footing. 

Rod and I discuss these topics and we also cover how energy efficiency policy making has changed in the EU and where it is going. That 2050 goal? Is enough being done? Rod has an opinion. Community engagement? We discuss this too.

The Reality of Imaginaries in Swedish Green Transport – Amelia Mutter

Welcome to the MyEnergy2050 podcast where we speak to the people building a clean energy system by 2050. I’m your host, Michael LaBelle. In this episode, we are speaking with Amelia Mutter a Researcher at the Division of Environmental Communications at the Swedish University of Agricultural Sciences. The reason to have Amelia on was to discuss her research comparing biogas and electric transport options in Sweden. As you’ll hear, we have a great discussion and really delve into the following topics: 

  • How and why she did do a PhD on imaginaries on biogas and electric vehicles in Sweden. For those not familiar with the concept of ‘imaginaries’, don’t turn off yet, the application of imaginaries can help you understand how technology is accepted or rejected by people and policymakers. 
  • Are goals for 2030 really attainable in just a few more years? Will we have the transport infrastructure and deployed technologies to meet our goals? 
  • We discuss the interesting and dynamic network of resources and outputs that a biogas facility provides.  
  • Why technology lock-in may not be a bad thing when it leads to further innovation. 
  • And finally, why it is important to understand the everyday design justifications for our transport modes. We learn about the different needs of long-range buses compared to city buses.  

The intent of the MyEnergy2050 podcast is to spread knowledge about how the energy system can assist our transition towards a greener future. If you enjoy this episode or any episode, please share it. The more we spread our message of the ease of an energy transition, the faster we can make the transition. And now for this week’s episode. 

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