Between energy transition and internal market agenda: The impact of the EU commission as a distinct energy policy actor

Abstract

The EU Commission has newly evolved into a leading energy policy actor. At the same time, the Commission’s proclamation of an “Energy Union” depicts a visionary future rather than the current reality: the internal energy market still awaits full integration and the transition towards a sustainable energy system is taking place largely on the national level (e.g., the Energiewende in Germany). To shed some light on this muddled situation, we analyse the Commission’s promotion of the internal market and policy harmonisation/centralisation from an economic perspective along two dimensions. First, on the content dimension, we investigate whether the double challenge of decarbonising the energy system and finalising the internal market exhibits trade-offs. Second, on the form dimension, we outline the benefits of (de)centralising energy policies. For both dimensions, we build on the theory of fiscal federalism to elucidate the normative aspects of the discussion and the Public Choice approach to positively explain the emergence of the current situation. Overall, we find that the normative policy evaluation indeed differs in some respects from the Commission’s positions, while the latter can be well explained via the Public Choice approach.