Policy dynamics and institutional balances in the EU’s handling of the climate challenge

The increase in cross-cutting agendas is particularly challenging for the EU, which is marked by a combination of supranational and intergovernmental governing dynamics. Climate change is such a cross-cutting issue, being inveigled in all other policy areas. How the EU handles the climate challenge will arguably have bearings on the balance between the supranational and intergovernmental sides of the EU institutional structure. Hence, it is of great relevance to understand what the EU’s handling of the climate challenge can tell us about EU policy dynamics and institutional balances, especially in the face of transversal turbulence. This is of interest as the EU, with the European Green Deal, started out with ambitious environmental goals but has since run into difficulties. Solutions meant to strengthen the climate change agenda sometimes goes in a direction perpendicular to the intended direction. Seeking to shed new light on two related issues – policy dynamics and the EU systemic dynamics – in the face of transversal turbulence, we ask: How and to what extent does competing agendas challenge the climate agenda and what new insights can such challenges tell us about the EU as a system of governance? The aim is to unlock challenges pertaining to policy dynamics and institutional balances. The EU has shown an almost astonishing power to act in various situations of turbulence and crises; for example, the Union responded to the energy crisis in 2022 with even higher climate ambitions. There are, however, limits in terms of the EU’s ability to respond. The EU does, for example, not have fiscal resources, cannot collect taxes and has limited possibilities to provide subsidies.To ensure green investments in times of crisis, the EU has eased the state aid guidelines. Drawing on the perspective of transversal turbulence, we explore the effects of crisis-induced turbulence on the EU’s climate change ambitions and whether such turbulence leads to a shift in institutional balances and, if so, what does this change mean for the green agenda. We identify two plausible policy dynamics that may lead to shifting institutional balances within the EU. The first is a learner lock-in or ‘competency trap’ in the EU’s internal market which focuses on sector-specific dynamics (Batora, Fossum and Trondal, forthcoming). This dynamic posits stymied or path-dependent learning that leads to an inability to shift policy instruments and learning from market making towards a green circular economy. The second policy dynamic is associated with the ‘failing forward’ approach that Jones, Kelemen and Meunier (2016) attribute to the EU’s intergovernmental system and its onus on lowest common denominator intergovernmental bargaining. When this dynamic interacts with a securitization logic, stemming from the external security threats that the EU is facing, resources are drained from other agendas – like climate change – and the EU’s decision momentum may relocate from supranational to intergovernmental institutions and venues, and from a rules-based to a bargaining-based mode of decision making. Which dynamic predominates gives clues about the EU’s internal dynamics and self-conception (e.g., supranational versus intergovernmental system of governing).