Geopolitics

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

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

Tightening the circles of the Circular Economy — David Peck

This week we speak with Professor David Peck, from the Delft University of Technology. In this interview, David recounts his broad experience working both in industry and academia in the area of material sciences and which we now label as the circular economy. It was a real honor to have David on to discuss the circular economy and sustainability in business.  

It is hard for me to provide a succinct summary of all the key points, as we really delve into what the circular economy actually is. To draw on David’s explanation, in this episode we get into what ‘tightening the circle’ means in the circular economy. From the mining of rare earth minerals to the fallacy of recycling as a solution to our overconsumption of materials and resources. We uncover what the circular economy is and is not. It is not recycling, but engaging at the design stage to ensure a more sustainable product is made. But again, this is insufficient and greater attention needs to be paid to where the resources are coming from and who is pulling them out of the ground. Hint, China may not be the most socially just place for mining.  

Understanding the value chain of products and services is essential for business leaders to shift their companies in time, to be ahead of the social curve, and efforts of competitors. We discuss why there may now be emerging international competition between countries to be the most innovative in securing their lead in sustainable technologies and services. There is not a scarcity of materials, but rather a scarcity in innovative means to develop the products and services we need to deliver a more sustainable economy.  

We also address the importance of equity and wellbeing in society. During the interview, I forgot the name of Mark Anielski, who I had on a previous podcast of Energy and Innovation. I can definitely recommend that episode for a similar line of thinking of measuring wellbeing by different metrics.  

In the end, David and I come to the conclusion that people need to dosustainability. Listen to the podcast and you’ll get to know why educating and helping people is his new mission. 

The intent of the MyEnergy2050 podcast is to speak to the people building a clean energy system.  

 If you like this episode please comment on LinkedIn and share. 

Energy Cultures: The axioms of an energy transition – Michael LaBelle

In this episode, I cover the basic concepts in my new book ‘Energy Cultures: Technology, Justice, and Geopolitics in Eastern Europe‘ published by Edward Elgar Publishing. We cover the three Axioms which guide the Energy Cultures framework: Space, Scale and Transformations. Energy cultures are a way to understand how society interacts with governments and other countries to create the energy system. It is a means to understand the deeply embedded practices people perform every day, from driving a car to cooking their meals. People are unaware or are non-reflexive of when and how they use energy. By highlighting the role of culture, then we can perceive the everyday landscape and practices to understand how we interact and build our societies around the energy system. At the end of the day, it is best to remember the energy system should serve us, not we should serve the energy system. Often this basic principle is lost.

Failed Economic Ideology Feeding Populism – John Komlos

This week we speak with John Komlos, who is professor emeritus of economics and economic history at the University of Munich. Born in Budapest, he became a refugee 12 years later during the revolution of 1956, and grew up in Chicago, and received his PhD in both history and economics from the University of Chicago. John is a counter-revolutionary thinker in economics. And I mean that in our discussion, we cover a lot of ground as to what feeds his different lines of thinking, and how can we better understand the support for President Trump’s protectionist and populist rhetoric.

To start off, we go into detail about John’s background to clean hungry in 1956 and landed in Chicago not speaking English as a young boy, his outside perspective translated into different view on economics, one counter to the traditional Blackboard economists that are often taught, as john details economics without a greater understanding of how society and people work keeps the discipline of economics only theoretically, engaging and even unhelpful for understanding how the real world works, and how markets actually work.

As he states economics, quote, wants to think of itself as an isolated discipline. And it’s nonsense because the economy is embedded in society and in a political system, and in the culture. And he goes on, basically to outline that there is no isolation of economics or markets from the messy world of politics and society.

And this is why I wanted to have John on the podcast to present a counter-narrative to our current economic system we’re often exposed to and taught. And I appreciate his push and effort to study how people make choices and what influences markets from the everyday world, rather than just theoretical constructions. This push to see the world differently is useful for understanding the energy transition, which is not based on pure technical factors, but rather human and social factors that influence markets and choices around technologies.

The takeaway from our wide-ranging discussion are many, but I would point out the first part of our discussion about John’s background and how it shapes his work. For me, this is inspirational as to how we can approach our own research and efforts to contribute towards a more sustainable energy system. 

The Post-Soviet energy pact: The changing dynamics of fossil fuels and political support – Prof. Margarita Balmaceda

This week we speak with Professor Margarita Balmaceda. She is a professor of diplomacy and international relations at Seton Hall University. She is also an associate at Harvard University’s Davis Center for Russian and Eurasian Studies and at the Harvard Ukrainian Research Institute. Her books include The Politics of Energy Dependency, published in 2013. And her other book published in 2014, Living the High Life in Minsk.

In this episode, we get a preview of her latest book that will come out in March 2021, Russian Energy Chains: The Remaking of Technopolitics from Siberia to Ukraine to the European Union.  Because of Margarita’s extensive experience research and writing about Russia, the EU, Belarus and Ukraine we delve into the latest issues. Including Lukesenko’s attempt to hang-onto power after the September 2020 disputed national elections. We get a background on how and why Lukashenko was able to stay in power. We discuss the overreach of Russia and its historical relations with Austria and Germany. Nonetheless, Margarita outlines the historical relationship between EU countries and Russia. Including highlighting the aggressive actions of Russia which under-appreciated the response by the EU.

For me, the quote that summarizes best our discussion and the key take-away is when Margarita states, “energy policies can never be imposed only from above. For the energy services, we depend on, in order to lead a good life, these are part of our expectations of the system in which we live”. This describes well both what happens when people feel secure in the political systems and how they feel when they don’t feel secure. Energy is an essential part of household and business budgets. Governments can make money or they can lose money in both providing energy services to its people and also, in this case, by selling fossil fuels. The energy system needs to be viewed both as a direct provider of benefits for households, but also an income generator for the state budget or other interests, which can either directly or indirectly benefit or harm citizens.

There is a tremendous amount of political-capital invested into energy and the relations that keep the system together and affordable. When energy becomes more expensive or the flows of money shift, the people can also shift their political allegiance The social compact may be broken which leads people to change their support for politicians. Thus, the idea of a social contract, which we discuss, plays an essential part in understanding the interplay of politics and energy.

And now for this episode with Professor Margarita Balmaceda on the shifting post-Soviet social energy pact.

Time to Build Green in Central and Southwest Europe – IRENA’s Renewable Roadmaps Team

Luis Janiero is a program officer working on renewable energy roadmaps at IRENA, before joining IRENA, he worked for five years at the Ecofys. Seán Collins holds a PhD from the University College Cork and as an Associate Program Officer on renewable energy roadmaps. The region is very heterogeneous. That is Southeast Europe, the income and the sizes of the system are very different from Austria and Italy to Cosmo and Bulgaria. Nonetheless, the countries each face the same challenge on the security of supply and high use of fossil fuel. For example, 90% of the oil is imported and over 70% of natural gas is also leading to the security of supply concerns. we delve into the future scenarios in this interview, the 2030 reference model, how things are going now and also the projected 2030 remap. This is what the future can be with the use of renewables. This is not a Fossil Free future scenario. But the advantageous use of renewables does shine through the model. 

We touch on the importance of finance for renewables and risk for investors and the cost of capital and how this impacts a new project, the higher cost of capital in the region could slow down the deployment of renewables. My takeaway from this report, in our discussion with Luis and Shawn, is the result of the models are achievable and practical for the region. Their model is a moderate one of what can be done by 2030. So just in 10 years, even here, it provides policymakers and even citizens of the region, and ability to perceive a different future, which more holistically embraces a cleaner future with cleaner air and a lower at a lower cost than what is the current trajectory.

Battling Cyber Threats Against Energy Infrastructure – Ion Iftimie

In this episode, we explore how energy infrastructure is not designed nor protected against cyber threats, there is now a realization of the importance of securing our energy system. Cyber threats can directly impact the militaries and the nation’s ability to respond to physical threats against countries or armies.

We also discuss how even phishing scams can lead to compromising networks and impact infrastructure, institutions and countries. We have an extensive discussion around the alliance of NATO and why acting through NATO provides collective benefits. China and Russia are also framed not as immediate threats, but as potential future adversaries, and how the constant foreign probing of computer systems needs to be stopped.

The big takeaway from our discussion was the difference between virtual and physical threats. And how these are accomplished. It would seem a cyber threat could be carried out by a small group of people. But as Ion explains this is not really true as a tremendous amount of knowledge in fields like engineering are necessary to bring down a network. We also get into this scary area of where the boundaries are in cyberspace. These are not defined and there is a threat of countries stumbling into war.

Finally, the biggest takeaway is the cost that is needed to reform and refined the energy infrastructure. It seems like money is in short supply. So beating back these adversaries remains a challenge. 

The Dilemmas of Global Energy Justice – Darren McCauley

In this episode, we trace back the history of Darren’s involvement in energy. We learn the background story on energy justice and how he got involved in it while at Trinity College Dublin. He describes his earlier work with Gordan Walker and Harriet Bulkeley which prompted Darren to go further and explore the concept more with others by using a legal studies perspective.

There are three key takeaways from my discussion with Darren. First, Darren is just great to talk to. I met Darren back around 2012 or 2013 and as you’ll hear in our discussion, we share a passion for a holistic understanding of the energy system and how society sits at the center of it.

Second, Darren outlines the massive disruption of Covid-19 is a chance for policymakers to push faster on the green transition. And here we discuss the preliminary findings of Darren’s work on the UK, Netherlands, and South Africa. Where he is finding a compartmentalized perspective on the energy system and not a joined-up systems-wide approach where moving towards a sustainable energy system has knock-on effects for many corners of society and the environment.

And the final takeaway is, every researcher needs to get out of their comfort zone and travel. This is easy  – or maybe hard to say – while we are locked-down, but we discuss how doing research in developing countries can begin to prompt change. We do take a light-hearted view of this topic, but Darren expresses well the serious desire to make a difference in other parts of the world as essential for anyone with a career in energy research.

Scroll to top