Lessons from OMC Governance for Climate and Energy Policy Governance in the Energy Union

Governance through the Open Method of Coordination (OMC) has been taking place for two decades, and there are lessons to be learned from its strengths, but also challenges. This paper presents lessons of OMC governance for climate and energy policy governance in the Energy Union. The OMC is applied in areas with weak or partial EU competency, and where there are different member state institutions and commitments. First, the success of the OMC is dependent not only on national ownership and commitment to agreed policy aims and benchmarks, but also to a well-functioning infrastructure in the relevant policy area. This differs very significantly among member states, with some that would like to be world leaders, while others have barely any infrastructure, let alone interest in energy and climate change policy. Secondly, the OMC is applied in areas of public policy – including climate and energy policy – where considerable public expenditure is required. Thus, aims related to public goods, are subordinate to aims of fiscal sustainability and fiscal consolidation which are central to the EMU. With the European Semester, EU governance of economic and monetary policy, but also public policy, has become centralized, providing stronger impetus and strength to the Ecofin Council and DG Ecfin, as well as to national finance ministries. This means that relevant ministers of energy and climate, need to ‘power’ their finance ministries, to ensure commitment to policy requiring expenditure, which is harder in a context of tighter fiscal consolidation. Third, despite this challenge, diffusion of ideas as well as iterative monitoring of policies and with it EU-facilitated policy learning (especially through country specific recommendations, now coordinated in the European Semester) are the main mechanisms of influence. Fourth, soft governance enables adaptation of aims to new challenges and new knowledge about an existing challenge, which is extremely relevant for an area like climate change and energy policy, for which there is regularly new knowledge about relevant policy solutions.