EU Environmental Policy-Making and the Practice of Early Agreements: A Double Principal-Agent Analysis

In the last decade, the political dynamics in EU environmental policy-making have fundamentally changed. As so-called ‘early agreements’ are now the standard form of legislative decision-making, the main negotiation forum has shifted towards trilogue meeting. In trilogues, representatives of the Council and the European Parliament negotiate a deal that needs to be approved afterwards by their respective institutions. Applying a principal-agent model to these new environmental policy-making dynamics, this paper examines the negotiation strategies of the rotating Council Presidency and the rapporteur (here the agents) vis-à-vis respectively the Council and the European Parliament (the principals). The strategies of the agents are meant to reconcile two constraints: reaching an agreement with each other in the inter-institutional trilogue forum, and simultaneously maintaining the support of the principals in their intra-institutional negotiations. By examining these policy-making dynamics as a double principal-agent analysis, the paper reveals how agents deal with this delicate task and to what extent this reinforces their position in current EU environmental policy-making. It does so on the basis of an in-depth case study of the recent negotiations on the Market Stability Reserve (MSR) Decision (January 2014-September 2015). This is a particularly revealing case as the Presidency finally succeeded to overcome the opposition of a blocking minority in the Council in order to get the inter-institutional deal accepted. The analysis is based on original empirical data collected through semi-structured interviews with key policy-makers in the MSR negotiations, coverage of the specialized press and official document research. Besides providing insights on current environmental policy-making dynamics in the EU, the paper contributes to the principal-agent literature by examining how the strategies of one agent can be affected by another principal-agent relationship. In that sense, it empirically contributes to the debate in the literature on whether trilogue negotiations strengthen or weaken agents.