Sequencing in Multi-Level Governance: Tracing EU Climate and Energy Policy Evolution

In order to achieve the Paris climate goals, climate policies worldwide need to be ratcheted up considerably in the coming years. Policy sequencing recently has gained increasing attention as a strategic approach to this end, with a first framework formulated by Pahle et al. (2018) that lays out different types of barriers to ratcheting up and options to overcome them. Yet a number of questions about the particular mechanisms and the actual empirical relevance of sequencing remain unanswered – a gap this paper aims to address. More specifically, we apply the sequencing framework to the European Union’s Emissions Trading Scheme (EU ETS) and the Renewable Energy Directive (RED). The choice is motivated by the EU’s role as climate policy frontrunner and the thus potentially rich evidence, the assumed increase of stringency in the last years, and the relatively clear-cut regulatory milestones (2020 and 2030 frameworks) that facilitate analysis. For each policy we trace whether and how it has been ratcheted up over time based on policy documentation, a review of scientific literature, and expert interviews. We analyze the internal dynamics of the two processes and discuss them in a comparative perspective, considering the specific context of the EU’s multi-level governance architecture. Additionally, we explore interactions between the two processes, asking whether renewable policies have facilitated the recent ratcheting up of the ETS. We find that in the ETS case, compensation of reluctant actors and the absence of existing national regulation enabled the unfolding of positive feedback processes and a centralization of instrument architecture. By contrast, national regulatory path dependencies from existing renewables policies obstructed harmonization and centralization of the RED. With limited options for direct compensation, negative feedback from distributional impacts and high-cost crises in Member States’ national RE support policies could not be moderated. Our results suggest that the ETS and the RED policy processes were driven by distinct policy communities that were caught in a largely conflictual relationship. We discuss the wider implications of our findings for the sequencing of policy-making for decarbonization in the future.