From Economic to Energy: Transition Three Decades of Transitions in Central and Eastern Europe 9783030550844, 9783030550851

Table of contents :
Preface
Praise for From Economic to Energy Transition
Contents
Notes on Contributors
Abbreviations
List of Figures
List of Tables
1 Introduction: Central and Eastern European Perspectives on Energy Transition
1 Introduction
2 Climate Change and Energy Transition
3 Energy Transition and Central and Eastern European Countries
4 The Present Volume
5 Structure of the Book
References
Part I Energy Transition Challenges
2 From Economic Transformation to Energy Transition: The Legacy of Thirty Years of Post-Communist Development
1 Introduction
2 Short Review of the Literature
3 Economic Growth and Energy Consumption
4 The Impact of Demographic Decline
5 EU Accession and Path Dependency
6 Conclusions
References
3 The CEE Energy Transition: Recurring Fifty-Year-Old Dynamics?
1 Introduction
2 External Forces in Energy Transitions
2.1 A Soviet-Led Energy Transition
2.1.1 An Eastern Bloc Built on Soviet Energy
2.1.2 Contextual Factors Leading to an Energy Transition
2.1.3 A Soviet-Led Energy Transition in Hungary
2.2 An EU-Led Energy Transition
2.2.1 The Impact of the EU’s Initial Renewable Energy Policies on the CEE EU
2.2.2 Renewable Energy Expansion in the 2010s
3 Conclusion
References
4 Tunnel with No Light: Entrapment and ‘Exit’ of V4 Countries’ Energy Transition
1 Introduction
2 The Self-Entrapment Myth: Exits and Voices
3 Micro-Regionalism and the EU
4 Russian Energy: One Source, Two Stories
5 The Visegrad Formula
5.1 Energy Cooperation Before and After EU Accession
5.2 Groping in the Dark
6 Conclusion
References
5 Public Attitudes to Sustainable Energy Transitions in the Visegrad Four: Historical Legacy and Emerging Trends
1 Introduction
2 V4 Perceptions of Climate Change: General Trends
3 Supporting the Transition to Clean Energy Technologies in V4: General Trends
4 Supporting the Transition to Clean Energy Technologies in V4: Demographics
5 Conclusion
References
6 Structural Changes in the Baltics and the Russian Presence: Ramifications for the Region’s Energy Future
1 Introduction
2 The Baltic States: Settings and Main Drivers
3 The State of the Region’s Energy Sector
4 Characteristics of Relevant Energy Sub-sectors and Their Relevance for the Baltic Region
5 Selected Projects with Regard to the Region’s Energy Security
5.1 Klaipeda LNG
5.2 Nord Stream 2
5.3 Nuclear Power Plants In and Around the Baltic Region
6 The Energy Security of the Baltic States in Light of the Economic and Energy Transition Processes
7 Conclusion
References
7 Women as Change Agents of the Bulgarian Energy Transition
1 Introduction
2 Women as Change Agents to Engender a Just Energy Transition
3 Energy Justice and Just Transitions
4 Gender and Energy Just Transition in Bulgaria
5 Women as Consumers: The Feminization of Energy Poverty
6 Women as Producers: Female Participation in the Energy Sector
7 Women as Decision-Makers: The Legacy of the Socialist State
8 Conclusion
References
Part II Different Paths to Energy Transition
8 Pathways for a Low-Carbon Electricity System in Poland and Hungary
1 Introduction
2 Methodology and Data
3 Changing Electricity Balances in Hungary and Poland
4 Low-Carbon Sources
4.1 Renewable Energy Sources
4.1.1 Hydropower
4.1.2 Biomass
4.1.3 Wind Energy
4.1.4 Photovoltaic Energy
4.2 Nuclear Energy
4.3 Fossil Fuels
4.3.1 Coal
4.3.2 Natural Gas
5 Summary and Conclusions
References
9 Slovenia: Drivers and Challenges of Energy Transition to Climate Neutrality
1 Introduction
2 Climate Paradox and the Need for Sustainable Energy Transition: From Contextualisation to Operationalisation
3 Energy Landscape: Enabling the Energy Transition of Slovenia?
4 Energy Regime: Relevant National Circumstances as a Major Challenge for Slovenia?
5 Energy Niches: Lagging Behind the EU?
6 Conclusion: Small Member States and Their Peculiarities as an Opportunity or a Threat for EU Energy Transition to a Climate-Neutral Society?
References
10 Energy Transformation in Lithuania: Aiming for the Grand Changes
1 Introduction
2 The Main Directions of Lithuania’s Energy Policy After 1990 and the Current Situation
2.1 The End of Nuclear Energy in Lithuania
2.2 Breaking Out of an “Energy Island”
3 Strategic Transformation of the Energy Sector: More Climate-Friendly, More Efficient, More Self-sustaining
3.1 The New National Energy Independence Strategy: The Main Targets
3.2 The Main Drivers of Energy Transformation
3.3 Strategy Implementation and the Main RES-Support Programmes
4 Challenges and Risks
5 Conclusions
References
11 Between Energy Security and Energy Transition: Visegrad Gas Hub
1 Introduction
2 Europeanisation of the Energy Policy
3 EU(ropeanised) Energy Transition: Implications for Energy Security
4 The Visegrad Group and Energy Security
5 A Window of Opportunity for Visegrad Group Regional Energy Security
6 Conclusion
References
12 Path-Dependencies of Carbon Lock-In Shaping Coal Phase-Out in Poland’s Electricity Sector: A Herculean Task of Decarbonization?
1 Introduction
2 The Role of Coal in the Energy System and the Rising Troubles from It in the Electricity Sector
3 Energetic Path Dependencies of Carbon Lock-In
3.1 The Material Dimension and Technological, Infrastructural, and Institutional Lock-In
3.2 The Ideational Dimension in Terms of Behavioural and Discursive Lock-In
4 Development of RES Policy as a Possible Remedy to Break Carbon Lock-In
5 Conclusion
References
Part III Legal and Political Aspects of Energy Transition
13 The CEE Countries and the European Union’s Energy Transition: Economic Analysis of Law
1 Introduction
2 Methodology
3 Framework and Political Basis of the Regulations Analysed
4 Energy Regulation: Presentation and Economic Analysis of the Law
5 Aggregate Analysis of Incentives and Disincentives in Central and Eastern European Countries
5.1 General Remarks
5.2 Energy Efficiency of Buildings
5.3 Renewable Energy
5.4 Mobility
6 Conclusions
References
14 The Role of the Court of Justice of the European Union in the Reformulation of Hungarian Energy Policy
1 Introduction
2 The European Union, the National Energy Policy, and the Judicial Review
2.1 The Treaties and the EU’s Energy-Relevant Secondary Legislation
2.2 National Actors in the Enforcement of EU Law and EU Policies
2.3 The Role of the CJEU in Shaping the EU and Its Sector-Specific Policy Areas
3 The CJEU Case-Law on Hungarian and Regional Energy Policy
3.1 The Hungarian Energy Policy and Regulation
3.2 Standing Rights and Procedural Requirements Guaranteed by EU Law and CJEU Case-Law for Networks’ Interested Parties
3.3 Standing Rights Guaranteed by CJEU Case-Law for NGOs
3.4 The Nuclear Installations and the Paks 2 Project Before the CJEU
4 Discussions on Cross-Sectoral, Regional, and Multi-layered Levels
4.1 Diverse Tendencies in the CJEU’s Reformulation Willingness in Cross-Sectoral Context
4.2 The Regional Relevance of the CJEU’s Case-Law
4.3 Multi-layered System of Legal Protection in the EU
5 Conclusion
Appendix
References
15 Perfect Compliance? Nuclear Power in Central and Eastern Europe and the EU Membership
1 Introduction
2 Compliance and Central and Eastern Europe
2.1 Post-accession Compliance of the “New” EU Member States
2.2 Factors of Post-accession Compliance
2.3 Conditionality as a Social Learning Process
3 Shutting Down of Nuclear Power Plants as a Social Learning Process
3.1 Shutting Down Ignalina
3.2 Shutting Down Jaslovské Bohunice
4 Conclusion
References
16 Energy-Transition Challenges in the Baltic Sea Region: An Overview of Socio-Political and Legal Gaps
1 Introduction
2 Research Method and Framework
3 Energy Transition in the BSR: State of the Art
4 Energy Transition in the BSR: A Bone of Contention?
4.1 Integration of Russia
4.2 An Inclusive Approach to Social Acceptance
4.3 A Common Energy Market
4.4 Micro-Generators
4.5 Medium-Term Energy Alternatives
5 Conclusion
References
Part IV View from the Neighbourhood
17 Energy Security Pathways in South East Europe: Diversification of the Natural Gas Supplies, Energy Transition, and Energy Futures
1 Determinants of the Energy Policies in South East Europe
2 The Role of Natural Gas in the Transition to a Low-Carbon Economy
2.1 Robustness of Decarbonization and the Weak Sustainability Hypothesis with Natural Gas
2.2 Economics of Coal-to-Gas Switching
3 Extension of the Natural Gas Infrastructure in South East Europe
4 SEE Energy Futures: Exploring Alternative Regional Scenarios
5 Conclusion
References
18 Transition to Electricity from Renewables in Line with the EU Standards in Serbia: Integration With(Out) Membership and Inconsistent Implementation
1 Introduction
2 Serbian Integration into the EU and Alignment in the Field of Energy: Trajectories of Differentiated Integration Through Energy Community
2.1 Serbian Integration into the EU and EU Conditionality
2.2 Obligations Under the Energy Community Treaty and Stabilization and Association Agreement in the Field of Electricity from Renewables
3 The Legislative Framework in the Field of Electricity from Renewables and the Inconsistent Implementation of the EU Standards
3.1 The Energy Community and Advancement of Standards in Serbia
3.2 The Energy Regulatory Framework and Production of Electricity from Renewables
3.3 Challenges of the Energy Regulation Implementation in Serbia
4 Conclusion
References
19 A Light at the End of a Tunnel or a Freight Train? A Comparative Analysis of Energy Transition in Croatia and Serbia
1 Introduction
2 A Comparative Snapshot of Energy Data
3 Croatia: The Light at the End of the Tunnel
4 Serbia: One Step Forward, Two Steps Back
5 Discussion
6 Conclusion
References
Conclusion: Halfway Between Economic and Energy Transition
References
Index

Citation preview

ENERGY, CLIMATE AND THE ENVIRONMENT

From Economic to Energy Transition Three Decades of Transitions in Central and Eastern Europe Edited by Matúš Mišík · Veronika Oravcová

Energy, Climate and the Environment

Series Editors David Elliott The Open University Milton Keynes, UK Geoffrey Wood School of Law University of Stirling Stirling, UK

The aim of this series is to provide texts which lay out the technical, environmental and political issues relating to proposed policies for responding to climate change. The focus is not primarily on the science of climate change, or on the technological detail, although there will be accounts of this, to aid assessment of the viability of various options. However, the main focus is the policy conflicts over which strategy to pursue. The series adopts a critical approach and attempts to identify flaws in emerging policies, propositions and assertions. In particular, it seeks to illuminate counter-intuitive assessments, conclusions and new perspectives. The intention is not simply to map the debates, but to explore their structure, their underlying assumptions and their limitations. The books in this series are incisive and authoritative sources of critical analysis and commentary, clearly indicating the divergent views that have emerged whilst also identifying the shortcomings of such views. The series does not simply provide an overview, but also offers policy prescriptions.

More information about this series at http://www.palgrave.com/gp/series/14966

Matúsˇ Misˇík · Veronika Oravcová Editors

From Economic to Energy Transition Three Decades of Transitions in Central and Eastern Europe

Editors Matúš Mišík Department of Political Science Comenius University Bratislava, Slovakia

Veronika Oravcová Department of Political Science Comenius University Bratislava, Slovakia

Energy, Climate and the Environment ISBN 978-3-030-55084-4 ISBN 978-3-030-55085-1 https://doi.org/10.1007/978-3-030-55085-1

(eBook)

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: deepblue4you/gettyimages This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

To Darina, our teacher, mentor, and friend

Preface

A small but dedicated group of researchers was created at the Department of Political Science in Bratislava in 2017 that—in collaboration with the Institute of Political Sciences of the Slovak Academy of Sciences—started to examine energy policy of the Central and Eastern Europe (CEE). This took place several years after the 2009 gas crisis that reshaped the perspective of many CEE countries on energy security; however, there was still a lack of knowledge about what exactly happened in the aftermath of the crisis and what it all meant. Generously supported by the Slovak Research and Development Agency, the research team was able to look into these issues and examine how energy security emerged as a crucial dimension of energy policy within the region. In some parts of the region this was not new news—the Baltic States had had experience with energy supply interruptions also before 2009—but other countries, like Bulgaria or Slovakia, were found unprepared and taken by surprise. We realised that energy security was a part of something much bigger—energy transition—and that the two are not always working in unison, but there is often friction between them.

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To explore these issues from a broader perspective, we decided in spring 2019 to organise a workshop. Just a couple of weeks before the workshop ‘Energy transition in Central and Eastern Europe: In search of an energy future’ was supposed to take place (November 2019), one of us had met Oscar Fitch-Roy at the conference of The Academic Association for Contemporary European Studies (UACES) in Lisbon, who put us in contact with an editor from Palgrave Macmillan and thus started the whole process leading to this edited volume. Oscar, thanks! As a result, at the time of the workshop the book proposal was already in the pipeline which helped us to speed up the process and finish the edited volume in a very short time (little more than seven months since the workshop took place). The main thanks for this, of course, goes to our contributors whose dedication, hard work, and unprecedented ability to stick to the deadlines made it possible to make the writing of this edited volume a question of months and not years. Our gratitude also goes out to colleagues from the Department of Political Science at Comenius University in Bratislava, especially Kateryna Yakovenko, for their assistance with organising the workshop and all those participants who are not listed among authors in this volume, but contributed to the discussion during the workshop (particularly Margarita M. Balmaceda). We would also like to thank our families for their support during the preparation of this volume. Cooperation with the Palgrave Macmillan team—Rachael Ballard, Joanna O’Neill, Geetha Chockaliangam, and Meera Mithran—was really great and their professionalism and commitment to the project helped us to proceed at a fast pace. The work on this edited volume was supported by the Slovak Research and Development Agency under the project ‘Priorities of the Central and Eastern European Countries in the context of Energy Union’ (APVV-16-0062). We would like to thank the Agency for its generous support. Bratislava, Slovakia June 2020

Matúš Mišík Veronika Oravcová

Praise for From Economic to Energy Transition

“Countries of Central and Eastern Europe tend to be lumped together due to their post-Communist legacy rather than any objective geographical or political features. Whereas comparative analyses of policy in Europe often contain a case study of the ‘CEE’ as merely one chapter, on par with Denmark, Ireland or Luxembourg, this excellent volume opens the black box of ‘the New EU’ with an eye on nuance and diversity. Thirty years since the regime change is the perfect time to take stock, and a thorough analysis of the dynamics of energy transition in the region is of the highest policy relevance for the EU’s decarbonisation ambitions. Written by experts, analysts, and practitioners, this coherent and timely collection will be a key reference for years to come.” —Kacper Szulecki, University of Oslo, Norway “The book is unique in several ways. Above all, it offers the most comprehensive and in-depth look at issues of energy transition in the countries of Central and Eastern Europe currently available in academic literature. Prominent experts mostly from the region analyse the specifics of their countries’ energy policies. I recommend this book to anyone who wants

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Praise for From Economic to Energy Transition

to better understand the approaches of the CEE countries to the ambitious goals of the EU’s climate and energy policy, including why they are a little different than those of the ‘old’ member states.” —Alexander Duleba, Slovak Foreign Policy Association, Slovakia “This timely book demystifies the widely held assumption of a uniform approach towards energy transition in Central and Eastern Europe. The topic is carefully unpacked through an in-depth and historically sensitive analysis of virtually all countries of the region and from a rare combination of disciplinary perspectives. This volume is therefore a must-read for anyone interested in the politics of energy transition in this part of the world and beyond.” —Anna Herranz-Surrallés, Maastricht University, The Netherlands

Contents

1

Introduction: Central and Eastern European Perspectives on Energy Transition Matúš Mišík and Veronika Oravcová

Part I 2

3

4

1

Energy Transition Challenges

From Economic Transformation to Energy Transition: The Legacy of Thirty Years of Post-Communist Development Zsolt Gál

29

The CEE Energy Transition: Recurring Fifty-Year-Old Dynamics? John Szabo and Andras Deak

63

Tunnel with No Light: Entrapment and ‘Exit’ of V4 Countries’ Energy Transition Pengfei Hou

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5

6

7

Contents

Public Attitudes to Sustainable Energy Transitions in the Visegrad Four: Historical Legacy and Emerging Trends Izabela Surwillo and Milos Popovic Structural Changes in the Baltics and the Russian Presence: Ramifications for the Region’s Energy Future Martin Jirušek and Tomáš Vlˇcek Women as Change Agents of the Bulgarian Energy Transition Mariëlle Feenstra

Part II 8

9

10

11

12

123

153

181

Different Paths to Energy Transition

Pathways for a Low-Carbon Electricity System in Poland and Hungary Csaba Weiner

211

Slovenia: Drivers and Challenges of Energy Transition to Climate Neutrality Danijel Crnˇcec, Boris Suˇci´c, and Stane Merše

247

Energy Transformation in Lithuania: Aiming for the Grand Changes Tomas Janeli¯unas

283

Between Energy Security and Energy Transition: Visegrad Gas Hub Andrea Figulová and Donald Wertlen

315

Path-Dependencies of Carbon Lock-In Shaping Coal Phase-Out in Poland’s Electricity Sector: A Herculean Task of Decarbonization? Maksymilian Zoll

341

Contents

Part III

Legal and Political Aspects of Energy Transition

13 The CEE Countries and the European Union’s Energy Transition: Economic Analysis of Law Armando Alvares Garcia Júnior 14 The Role of the Court of Justice of the European Union in the Reformulation of Hungarian Energy Policy László Szegedi 15

16

Perfect Compliance? Nuclear Power in Central and Eastern Europe and the EU Membership Matúš Mišík and Veronika Prachárová Energy-Transition Challenges in the Baltic Sea Region: An Overview of Socio-Political and Legal Gaps Farid Karimi and Michael Rodi

Part IV 17

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View from the Neighbourhood

Energy Security Pathways in South East Europe: Diversification of the Natural Gas Supplies, Energy Transition, and Energy Futures Elkhan Richard Sadik-Zada and Andrea Gatto

18 Transition to Electricity from Renewables in Line with the EU Standards in Serbia: Integration With(Out) Membership and Inconsistent Implementation Marko Milenkovi´c and Milica Pešteri´c

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19

Contents

A Light at the End of a Tunnel or a Freight Train? A Comparative Analysis of Energy Transition in Croatia and Serbia Jasminka Young

545

Conclusion: Halfway Between Economic and Energy Transition

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Index

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Notes on Contributors

Armando Alvares Garcia Júnior holds three doctorates in Law (Public International Law, International Economic Law, and Private International Law) and a doctorate in Political Science (International Relations). He also holds several Master’s Degrees in Political Economy and International Economics. He was Dean of the Faculty of Law of the Bandeirante University of S¯ao Paulo, Brazil. He is the author of more than forty books, and several book chapters and scientific articles. He served as a professional for governments and multinationals (e.g. KPMG). He is currently professor of International Law (postgraduate level) at Universidad Internacional de La Rioja (UNIR) in Spain. Danijel Crnˇcec is a member of the Centre of International Relations and a teaching assistant at the Chair of International Relations at the Faculty of Social Sciences, University of Ljubljana. He has an interdisciplinary educational background in International Relations and International Economy. Currently he is working for the Ministry of Infrastructure, where he is engaged in the development of the Slovenian Integrated National Energy and Climate Plan (NECP). His academic research and work has focused on international and EU climate and energy policies,

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climate diplomacy, and EU–Russia energy relations in the context of the development of international law of climate change. He has also been dealing with the eco-innovation and circular change in Slovenia. Andras Deak is the Head of the Research Group on Economics of Globalization at the Institute of World Economics in the Centre for Economic and Regional Studies as well as a Senior Research Fellow at the Institute of Strategic and Security Studies, National University of Public Service in Hungary. His work focuses on EU and post-Soviet energy policy and foreign relations. Mariëlle Feenstra is a Ph.D. researcher on engendering energy policy. She uses a gender lens to analyse energy poverty eradication policies and energy transition policy. She wrote the first-ever thesis on genderaware energy policy with case studies from Uganda and South Africa as a University Twente master student in 2002. She worked for fifteen years as a policy advisor for municipalities in the Netherlands, specialized in European Affairs. Together with her supervisor Professor Dr. Joy Clancy, she has written two studies for the FEMM Committee of the European Parliament. Both studies are the first publications in the EU on gender and energy policy. Andrea Figulová is an assistant professor at the Institute of European Studies and International Relations (FSES) at Comenius University in Bratislava, Slovakia. She studied political science at the Faculty of Arts at Comenius University and law at Prague’s Charles University. She completed her doctoral studies on Energy Security as a Part of the Foreign Policy of the Slovak Republic and the European Union at her current workplace. Her research deals with Slovak and foreign policy with an emphasis on energy issues and security and the Slovak political system in general. As a lecturer Andrea focuses mainly on the subjects of her Bachelor’s Degree, where she teaches the basics of social science knowledge, optional subjects with a focus on energy, and foreign policy. Zsolt Gál is an assistant professor at the Department of Political Science, Faculty of Arts at Comenius University in Bratislava, Slovakia. He holds an M.A. degree in Political Science from this department and a Ph.D. degree in Economics from Corvinus University in Budapest,

Notes on Contributors

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Hungary. His research interests include public finances, economic aspects of European integration, economic transformation in Central and Eastern Europe, and international migration. Zsolt teaches several courses in these fields at Comenius University. He is the author of The 2007–2009 Financial Crisis: What Went Wrong and What Went Different? (Comenius University Press, 2011) and numerous other publications. Andrea Gatto is a lecturer and Course Leader at NCH at Northeastern University, where he teaches Economic Development, International Development, and Research Design and Data Collection. Andrea is also Post-doctoral Research Fellow in Resource Economics at the Natural Resources Institute (NRI), University of Greenwich, where he also teaches the Introduction to Economics and Economic Analysis of Projects. An economic and business consultant, he is President of the CED—Centre for Economic Development & Social Change. Andrea’s research interests include the measurement of vulnerability and resilience within energy, agriculture, and resource policy and regulation, development economics, and sustainability studies. He holds a Ph.D./Doctor Europaeus in Economics, Statistics, and Sustainability, with a publication record in international peer-reviewed journals, including the Journal of Cleaner Production, Ecological Economics, Energy Policy, Journal of Environmental Management, Corporate Social Responsibility and Environmental Management and Journal of International Development. Pengfei Hou is a Ph.D. student at the School of International Relations, University of St Andrews. He is currently an EFB BIEPAG policy fellow at the University of Graz. His research interests lies mainly in Central, Eastern, and Southeastern Europe (CESEE) and his recent publication on party governance in Poland is published in Chinese Political Science Review. Tomas Janeli¯unas is a full professor at the Institute of International Relations and Political Science at Vilnius University. He has been lecturing courses on strategic studies, national security, foreign policy of Lithuania, and foreign policy of the great powers at the Institute since 2003. From 2013 to 2018 Janeli¯unas served as the head of the Department of International Relations at the Institute. From 2009 to

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Notes on Contributors

2020 Tomas was an editor-in-chief of Politologija (Political Science), the main Lithuanian academic quarterly on Political Science and International Relations. From 2007 to 2014 he also served as an editor-in-chief of Lithuanian Foreign Policy Review. Martin Jirušek works as an assistant professor at the International Institute of Political Science of Masaryk University and the Department of International Relations and European Studies, Faculty of Social Studies, Masaryk University. Martin is professionally focused on energy security in Central and Eastern Europe (CEE), the geopolitics of energy supplies, and the transatlantic dimension of energy security. He has published several articles and books on these issues and presented his research at numerous conferences abroad. Martin has also been in charge of several research and educational grants focused on the topics mentioned above and conducted many study and research visits to SEE, Russia, the United States and other countries of the analysed regions. Farid Karimi is an environmental social scientist in charge of energy research at the Interdisciplinary Centre for Baltic Sea Region Research at the University of Greifswald, Germany. His main research interests are in the social sciences, with a particular focus on issues related to energy transition, climate change, and energy policy. His articles have been published in international journals, including Energy Research & Social Science and the International Journal of Greenhouse Gas Control . Farid has several years of international work experience in various interdisciplinary fields, both in and outside academia. He has worked at Aalto University and the University of Helsinki in Finland; as a visiting fellow at the International Institute for Applied Systems Analysis in Austria; and in the European Patent Office in the Netherlands. He holds a Ph.D. in Social Sciences from the University of Helsinki and an M.Sc. in Sustainable Energy Technology (major: Energy and Society) from the Delft University of Technology in The Netherlands. Stane Merše is the Head of Energy Efficiency Centre at the Jožef Stefan Institute. He is an expert in integrated resource planning, modelling and optimization of energy processes, cogeneration and district heating systems, and the evaluation of resource efficiency and indicators. He

Notes on Contributors

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cooperated in the preparation of a CHP and RES electricity support scheme in Slovenia, energy strategy, a national energy programme, and numerous domestic and international projects. He is project leader of the consortium responsible for the preparation of the National Energy and Climate Plan for Slovenia. Marko Milenkovi´c is a research fellow at the Institute of Social Sciences Belgrade (Centre for Legal Research) and associate fellow at the Johns Hopkins University, School of Advanced International Studies-Center for Constitutional Studies and Democratic Development (CCSDD). He holds a Ph.D. from the University of Belgrade and an LLM from the University of Cambridge. He publishes in the areas of European integration, EU agencies, public law reforms and institutional change, environmental law, and state aid. His current work focuses on the differentiated EU integration for the Western Balkans. Matúš Mišík is an assistant professor at the Department of Political Science at Comenius University in Bratislava, Slovakia. His main research interests include energy security in the EU and the role of perception within EU decision-making mechanisms. He is the author of External Energy Security in the European Union (Routledge, 2019) and has published articles in Nature Energy, Energy, Energy Policy, Geopolitics, Journal of Popular Culture, Comparative European Politics, Asia Europe Journal , etc. He has undertaken research trips to Norway (2006), Kazakhstan (2009), Finland (2009), Great Britain (2011), Austria (2012), and Canada (2015–2016, 2018). Veronika Oravcová is a post-doctoral fellow at the Department of Political Science at Comenius University in Bratislava, Slovakia and a research fellow at the Slovak Foreign Policy Association. Her research interests are centred on energy transition and energy security in Central and Eastern Europe. Another of her areas of interest is the role of the president in post-communist countries, especially intra-executive relations. Milica Pešteri´c is a senior associate at Bojovi´c Draškovi´c Popovi´c & Partners. Her main focus is on energy, contract law, and overall commercial law. Prior to her position at Bojovi´c Draškovi´c Popovi´c & Partners,

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Notes on Contributors

she was a senior associate at another reputable Serbian full-service independent law firm and prior that an in-house lawyer at NIS-Gazprom, one of the world’s biggest oil and gas companies. She earned her LLM from Queens’ College at Cambridge University and her LLB from the University of Belgrade, Faculty of Law. Milos Popovic is a Marie Skłodowska-Curie Post-Doctoral Fellow at the Institute of Security and Global Affairs (ISGA) at Leiden University. Previously, he worked as a Post-Doctoral Fellow at the Center on the Future of War at Arizona State University, and a Research Consultant for Columbia University in New York. His research interests are at the intersection of civil war dynamics and postwar politics in the Balkans. Veronika Prachárová is a director and researcher at Slovak Governance Institute in Bratislava, Slovakia. She is also working on her Ph.D. research on the politics of surveillance at Comenius University in Bratislava, Slovakia. Before joining SGI she worked for the think-tank Alfa as analyst with specialization on access to information, public procurement, energy politics, defence and security issues, and cybersecurity. In 2015 she was a member of a research team conducting Rapid Social Survey of the impact of construction of D4 highway and R7 expressway on vulnerable groups for The European Bank for Reconstruction and Development. Michael Rodi holds the Chair of Public, Financial, Environmental, and Energy Law at the University of Greifswald Faculty of Law and Economics. He is also Managing Director and Director of Research at the Institute for Climate Protection, Energy, and Mobility (IKEM) in Berlin. Professor Rodi has been involved in several projects on clean energy transition in the Baltic Sea Region, with a particular focus on issues related to wind energy. In addition to his work on numerous reports for German ministries and the European Commission, he has advised the Vietnamese government on the design and implementation of an ecological tax reform. His research focuses include climate protection law and policy, sustainable energy and transport, and fundamental issues of finance and tax law. Professor Rodi’s publications include Economic Analysis of Public Law (English translation forthcoming), as well as articles in the Oxford Handbook of Research on Environmental Taxation, including

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‘The Legal Authority to Enact Environmental Taxation Instruments’ and ‘Designing Environmental Taxes in Countries in Transition: A Case Study of Vietnam’. Elkhan Richard Sadik-Zada currently works as a senior researcher and lecturer at the Ruhr-University, Bochum, Germany, where he teaches Economics of Natural Resources, Growth and Development Economics, How to Conduct a Field Survey, Public Sector Reforms and Management, and Empirical Methods of Social Research. He is a visiting lecturer at the University of the Western Cape, South Africa. He is also a member of the Centrum Umwelt, Ressourcen, Energie at the Faculty of Management and Economics, Ruhr-University, Bochum. He holds a Ph.D. in International Development Studies, with a publication record in international peer-reviewed journals, including Mineral Economics, The European Journal of Development Research, and Post-Communist Economies. Boris Suˇci´c is a project manager at the Jožef Stefan Institute. He is an expert in energy and resource efficiency, demand-side management, energy planning and optimization, performance monitoring, and modelling of energy systems in industry. His research interests are particularly related to the role of sustainable planning in the industrial sector and integration with the urban environment. He was actively involved in various projects for both the public and private sectors in the field of energy management in buildings, energy and resource efficiency, distributed electricity generation, and environmental protection. Izabela Surwillo is a researcher in the field of energy security and international relations. She earned her master’s degree from the University of St Andrews, UK and her Ph.D. from the Central European University, Hungary. Her research focuses on national approaches to energy security, energy governance, and sustainable energy transitions, particularly in the CEE and the Baltic Sea regions. John Szabo is a Ph.D. candidate at Central European University’s Department of Environmental Sciences and Policy as well as a Junior Fellow at the Institute of World Economics in the Centre for Economic and Regional Studies. His interests lie at the intersection of energy and social systems.

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László Szegedi is a senior lecturer at the National University of Public Service (Hungary). He earned his law and Ph.D. degree from the ELTE University of Budapest. After graduation, he acquired an LLM degree from the Georg-August University of Göttingen (Germany), while also studying at the German University of Administrative Sciences and the Vesalius College of Brussels. He previously worked as a trainee of the European Environmental Bureau and the European Commission. Additionally, he served as EU law expert at the Hungarian Financial Supervisory Authority and the Supreme Court of Hungary. His research interests include the evolution of European governance as well as European administrative law. He currently deals with single market issues, focusing mainly on the EU’s banking and energy regulation. Tomáš Vlˇcek works at the Department of International Relations and European Studies and the International Institute of Political Science of Masaryk University. He is a member of the Centre for Energy Studies, an independent research platform, a Senior Expert of the European Energy Research Alliance (EERA) Energy Strategy Expert Group (EESEG), and a member of the Czech Nuclear Education Network academic association. He has taken part in nearly thirty government and academic research projects on energy security and energy policy, has delivered tens of papers at international conferences, and has undertaken a number of research forays to Russia, the USA, and countries in Europe, especially Central and Eastern Europe, as well as South Eastern Europe. His research specialization focuses on geopolitical aspects of energy, nuclear energy, and energy security of post-communist Europe. Csaba Weiner is a Senior Research Fellow at the Institute of World Economics of the Centre for Economic and Regional Studies in Budapest, Hungary, which he joined in 2003 after graduating with his bachelor’s degree in 2000 and master’s degree in 2003, both in economics. His main areas of research interest are the energy sector in Central and Eastern Europe and the countries of the former Soviet Union; foreign direct investment in and from Russia; the Russian economy; and Russian–Hungarian relations. He earned his Ph.D. in Regional Science in 2011 and was awarded the János Bolyai Research Scholarship by the Hungarian Academy of Sciences for the period

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2016–2019. Supported by the New National Excellence Programme of Hungary’s Ministry of Human Capacities, Csaba Weiner was a Bolyai+ Teaching and Research Scholar at the Budapest Business School University of Applied Sciences during the 2018–2019 academic year. He has authored more than seventy publications and has been a speaker at some seventy conferences and workshops. Donald Wertlen is a Ph.D. student at the Institute of European Studies and International Relations (FSES) at Comenius University in Bratislava, Slovakia. During his studies at the Institute of European Studies and International Relations he took interest in the issue of energy policy and conducted both bachelor and master theses on this topic. The energy and climate policies remain his point of interest also for his dissertation. Currently, he is a member of project APVV-16-0540, ‘Human Rights and Sustainable Development in the EU External Relations’, where he researches the human rights and security within the framework of energy transition and climate. Jasminka Young is a doctoral researcher at the Public Governance Institute, KU Leuven. She co-founded the Serbian think-tank, RES Foundation. Her research encompasses EU environmental, climate, and energy policies with an empirical focus on sustainability transitions. She worked with the United Nations Development Programme and provided consultancy for the World Wildlife Fund, the European Climate Foundation, the German Corporation for International Cooperation, and Heinrich Boll Stiftung. Ms. Young received a M.Sc. in European Politics and Policies from KU Leuven and her B.Sc. from the Faculty of Geography. She authored the book Application of EU Environmental Standards in the Serbian Economy and has published a number of studies and articles. Maksymilian Zoll holds a Master of Science degree from the University of Twente (the Netherlands) and a Master of Arts degree from the University of Münster (Germany) as part of a Double Degree Programme in European Studies with governance and regulation as areas of concentration. Formerly, recruited as a Research Associate within the working area ‘Comparative Politics and European Integration’ (Head: Professor Dr. Michèle Knodt) at the Technische Universität Darmstadt, he conducted

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research on Poland’s energy transition by examining the political and economic system, particular governance, coordination, and regulatory processes. He now works as a Desk Officer at the Federal Energy Efficiency Centre within the Federal Office for Economic Affairs and Export Control, Germany.

Abbreviations

AC bcm BRELL BSR CANDU CCGT CCS CCUS CEE CEF CESEC CHP CJEU CO2 Comecon COP-21 DSO EBRD

Alternating Current Billion Cubic Metres Belarus, Russia, Estonia, Latvia, and Lithuania (electricity system) Baltic Sea Region Canada Deuterium Uranium (reactor) Combined Cycle Gas Turbine Carbon Capture and Storage Carbon Capture, Utilization, and Storage Central and Eastern Europe Connecting Europe Facility Central and South Eastern Europe energy connectivity Combined Heat and Power Court of Justice of the European Union Carbon Dioxide Council for Mutual Economic Assistance Paris Agreement of the United Nations Framework Convention on Climate Change Distribution System Operator European Bank for Reconstruction and Development

xxv

xxvi

EC ECJ EEA EEPR EMT EnC EnCT ENTSO-E EPS ETS EU EU11 EU15 FiP FiT GDP GDR GHG GIPL GJ Gosplan GWh HEP HPP HVDC IAP IBRD ICGB ICT IEA IMF IPCC IRENA ktoe kWh LNG mcm MLP MSA

Abbreviations

European Commission European Court of Justice European Environment Agency European Energy Programme for Recovery Ecological Modernization Theory Energy Community Energy Community Treaty European Network of Transmission System Operators Elektroprivreda Srbije Emission Trading System European Union Central and Eastern European EU member countries EU member countries before 2004 Feed-in Premium Feed-in Tariff Gross Domestic Product German Democratic Republic Greenhouse Gas Gas Interconnection Poland–Lithuania Gigajoule Soviet State Planning Committee Gigawatt Hour Hrvatska elektroprivreda Hydro Power Plant High Voltage Direct Current Ionian Adriatic Pipeline International Bank for Reconstruction and Development Gas Interconnector Greece–Bulgaria Information and Communication Technology International Energy Agency International Monetary Fund Intergovernmental Panel on Climate Change International Renewable Energy Agency Kilotonnes of Oil Equivalent Kilowatt Hour Liquefied Natural Gas Million Cubic Metres Multilevel Perspective Multiple Streams Approach

Abbreviations

Mt CO2 eq MW MWe NATO NECP NIMBY non-ETS NPP NRA NS NSC OECD OPAL PCI PiS PPA PPP PV PWR RBMK RES SAA SCPX SEE SEforALL SGC STEM TANAP TAP TFEU Toe TOP TPES TPP TSO TWh UNFCCC US

xxvii

Metric Tons of Carbon Dioxide Equivalent Megawatt Megawatt Electric North Atlantic Treaty Organization National Energy and Climate Plan Not In My Backyard Non-Emission Trading System Nuclear Power Plant National Regulatory Agency Nord Stream North–South Corridor Organization for Economic Co-operation and Development Ostsee-Pipeline-Anbindungsleitung Project of Common Interest Prawo i Sprawiedliwo´sc´ Power Purchase Agreement Purchasing Power Parity Photovoltaic Pressurized Water Reactor peaktop bolxo mownocti kanalny (High-Power Channel-Type Reactor) Renewable Energy Sources Stabilization and Association Agreement South Caucasus Pipeline Expansion South East Europe Sustainable Energy for All Southern Gas Corridor Science, Technology, Engineering, and Mathematics Trans Anatolian Natural Gas Pipeline Trans Adriatic Pipeline Treaty on the Functioning of the European Union Tonne of Oil Equivalent Treadmill of Production Total Primary Energy Supply Thermal Power Plant Transmission System Operator Terawatt Hour United Nations Framework Convention on Climate Change United States

xxviii

V4 VAT VRE VVER WACC WAM WB WPP

Abbreviations

Visegrad Group Value Added Tax Variable Renewable Energy vodo-vodno nepgetiqecki peaktop (Water-Water Energetic Reactor) Weighted Average Capital Costs With Additional Measures (scenario) Western Balkan Wind Power Plant

List of Figures

Chapter 2 Fig. 1

Recession and following recovery in CEE countries

42

Chapter 3 Fig. 1 Fig. 2 Fig. 3

Installed electricity generation capacities per fuel Installed renewable (PV and wind) per capita Combustible fuel-based electricity generation

83 85 86

Chapter 5 Fig. 1 Fig. 2 Fig. 3 Fig. 4

V4 population position on the responsibility for tackling climate change (2019) V4 population position on the importance of renewable energy use V4 population position on public financial support for the transition to clean energy V4 population position on the impact of renewables on energy import dependency

126 132 133 137

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xxx

Fig. 5 Fig. 6 Fig. 7

List of Figures

V4 population position on the importance of renewable energy use by ideology in 2019 V4 population position on the importance of renewable energy use by ideology in 2015 V4 population position on the importance of renewable energy use by community

141 142 144

Chapter 9 Fig. 1 Fig. 2 Fig. 3 Fig. 4 Fig. 5 Fig. 6 Fig. 7

Total primary energy supply, Slovenia (2018) Energy balance, Slovenia (2018) Share of primary electricity sources in Slovenia (2013–2018) Electricity transmission system in Slovenia Gas transmission system in Slovenia Energy efficiency target, 2020, Slovenia Renewable energy target, 2020, Slovenia

262 263 265 265 267 268 268

Chapter 10 Fig. 1

Structure of gross inland fuel and energy consumption in 2017

293

Chapter 11 Fig. 1

The North–South gas corridor

329

Chapter 12 Fig. 1 Fig. 2

Electricity production in 2019 Share of energy and electricity from renewable energy sources in Poland

347 357

Chapter 16 Fig. 1

Pathway towards a common energy market

473

Chapter 19 Fig. 1

Energy and carbon intensity in Croatia, Serbia, and EU-28 (2017)

551

List of Figures

Fig. 2 Fig. 3 Fig. 4

Structure of total primary energy consumption by sector in Croatia and Serbia in 2017 Structure of total primary energy consumption by fuel in Croatia and Serbia in 2017 Electricity production by source in Croatia and Serbia in 2017

xxxi

552 552 552

List of Tables

Chapter 2 Table 1 Table 2

Table 3 Table 4 Table 5

Gross inland energy consumption The speed and comprehensiveness of economic transition—average Transition Progress Index of the EBRD Real GDP growth Population (up to 2019) and population projections (2030–2100) in the EU27 and its CEE member states Energy intensity and energy mixes in EU11 countries compared to the EU28 average

30

38 40 47 51

Chapter 3 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6

Foreign trade of energy in the Comecon region in 1970 Hungarian average oil import prices from the Soviet Union, alongside global oil prices between 1970–1979 Energy mix composition CEE EU versus EU15, 2017 Reliance on Russian imports CEE EU versus EU15, 2017 Investment into the electricity sector per production Investment into the electricity sector per installed capacity

69 76 79 80 85 86

xxxiii

xxxiv

List of Tables

Chapter 5 Table 1

Attitudes of V4 population to energy efficiency measures 2017 and 2019

129

Chapter 6 Table 1 Table 2

Baltic countries’ total primary energy supply in 2018 Baltic countries’ electricity generation by source

158 159

Chapter 7 Table 1 Table 2

Conditions of an enabling environment for engendering energy policy The evaluative and normative contributions of energy justice to policy design

183 188

Chapter 9 Table 1

Socio-technical transition and the multi-level perspective used in the chapter

254

Chapter 10 Table 1

Lithuanian electricity balance, 2000–2018

288

Chapter 11 Table 1 Table 2 Table 3

Natural gas data for the V4 countries in 2018 Natural gas imports to the Central and Eastern European countries in 2018 Overview of national energy and climate plans in V4

323 325 327

Chapter 15 Table 1

NPPs closed down as the EU’s requirement

442

Chapter 16 Table 1

Interviewee categories and number of interviews in each country

460

List of Tables

xxxv

Chapter 19 Table 1 Table 2 Table 3

Structure of total primary energy supply by source in Croatia and Serbia Selected projects for the new production capacities in the electric energy sector Selected projects for the new production capacities in the electric energy sector

550 560 561

1 Introduction: Central and Eastern European Perspectives on Energy Transition Matúsˇ Misˇ ík and Veronika Oravcová

1

Introduction

The issue of climate change and the irreversible alteration of our environment has gained considerable attention in 2019, prompted not only by increased interest in this topic brought on by visible (and previously perceptible) changes in climate (severe weather conditions, wildfires, droughts, floods, etc.), but also by a series of climate emergency declarations issued by national governments, municipalities, or cities. Moreover, the social movement ‘Fridays for Future’, started and popularized by Swedish climate activist Greta Thunberg (2019), has received strong support during that year, becoming a global phenomenon. The movement reached its peak in September of 2019, with the Global M. Mišík (B) · V. Oravcová Department of Political Science, Comenius University, Bratislava, Slovakia e-mail: [email protected] V. Oravcová e-mail: [email protected] © The Author(s) 2021 M. Mišík and V. Oravcová (eds.), From Economic to Energy Transition, Energy, Climate and the Environment, https://doi.org/10.1007/978-3-030-55085-1_1

1

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M. Miˇsík and V. Oravcová

Climate Strike, which brought together seven million participants across the continents. The rising average global temperature has become a well-known and widely accepted fact and in association with wildfires— occurring in many areas, including Siberia, Amazonia, and the US, in extraordinarily high numbers—the urgency to prevent future negative changes to our environment resulting in even more dramatic events has become more visible issue than ever before. The concept of sustainability has entered public debate becoming one of the key characteristics of the economy and society of the future. The need to limit the anthropogenic impact on the planet includes, among others, the development of a society that will not be dependent on the burning of fossil fuels for its energy, a process considered to be one of the main culprits for climate change. Promoting sustainable energy supplies, the European Union (EU) aims for almost complete decarbonization of its energy sector by 2050 (European Commission 2012). However, the path towards a carbonfree economy is full of challenges that must be solved by individual EU member states, as they still hold the main tools for achieving this goal in their own hands. As the main pollutant and producer of greenhouse gases (GHG)—especially carbon dioxide (CO2 )—the energy sector holds a prominent position in the transformation of the economy into a carbon-neutral one. Since the Lisbon Treaty (adopted in 2009) left the competences connected to the energy mix composition in the hands of individual member states, they are effectively responsible for decreasing GHG emissions in their own energy sectors in order to support the development of a post-fossil fuel economy within the EU as a whole.1 Energy transition is a recurring process of changing the types of energy sources used to meet societal energy needs, and its current iteration is certainly not the first (Smil 2017). On the contrary, human societies have been using different forms of energy since the dawn of humankind: the twentieth century alone has seen several energy transitions, most of them connected to fossil fuels (for example, the transition from coal to oil or to natural gas). Although the current energy transition is usually identified through its departure from fossil fuels, it may be argued that the use of nuclear energy in electricity generation— albeit far from a complex

1 Introduction: Central and Eastern European Perspectives …

3

transition—can also be considered a transition from fossil fuels that face challenges connected to climate or environment, but also geopolitics2 (e.g. Richman and Ayyılmaz 2019). To meet the ultimate goal of transitioning to a carbon-neutral economy (and society in the broader sense) the EU developed two sets of binding goals with the years 2020 and 2030 as their respective target dates. These are supposed to facilitate a gradual energy transition and enable the member states to prepare for the changes connected to such a transition. A wide range of possible solutions for energy transition within the Union has been proposed. For instance, some member states have chosen to support renewable energy sources (RES) over coal, which will be moderately phased out as the main pollutant (burning coal produces the highest amounts of GHG among fossil fuels); others have turned to nuclear energy, often seen as a climate-friendly option since it does not produce emissions during the production of electricity. In June 2019, the Czech Prime Minister Andrej Babiš even wondered why—given its proclaimed carbon neutrality—nuclear energy is not considered to be a renewable energy source (Government of the SR 2019). Moreover, he claimed that it is also necessary for states other than EU members to decrease their GHG emissions. Although there is no consensus at the EU level about the utilization of nuclear energy, with some countries (such as Austria, Germany, or Italy) being strongly against, thanks to the above mentioned provisions regarding member states’ competences in the energy mix prescribed by the Lisbon Treaty (Article 194), there are no legal obstacles at the EU level that would prevent the inclusion of this energy source into national energy mixes. On the other hand, several member states have considered the possibility of minimizing the negative aspects of burning fossil fuels, including carbon capture and storage (CCS) technologies. However, negative externalities are attached to all existing solutions, be it the impact on the electricity grid (RES), problems with emissions from the life cycle perspective (nuclear energy), or the use of underdeveloped and questionable innovative technologies (CCS). Central and Eastern European (CEE) countries are active participants in these processes, as they are member states of the EU responsible not only for the co-development of the Community’s overall goals in the

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areas of climate, and energy policies and strategies, but also for their achievement. The economies of the states from the CEE region have undergone considerable transition during the period following the fall of the Communist regimes at the end of 1980s; taking place over the course of last three decades, these changes continue to shape the countries’ choices in the energy sector. Most importantly, the economic differences stemming from the historical legacy of command economy and the transition process have been repeatedly used as an argument for the need to unevenly distribute the ‘climate load’ among the EU member states, based on their economic performance and subsequent ability to finance energy transition. From the perspective of many CEE countries, this would enable the EU as a whole to contribute to global efforts against climate change and at the same time keep the economies of the EU members competitive on the international market. According to this argument, the high costs of energy transition for the domestic industry (in the form of higher energy prices, the need to invest into new technologies, etc.) would have to be included in the final price of products, which could harm the already very fragile domestic industry that is still experiencing the consequences of economic transition (Gurgul and Lach 2014; Topalli and Ivanaj 2016). On the other hand, there is also a positive climate externality to the economic transition, which has left a deep scar on the CEE countries’ economies. Namely, some of their economic sectors, especially the heavy industry, collapsed due to their inability to face international competition once Comecon (The Council for Mutual Economic Assistance) dissolved along with the Communist regimes at the beginning of 1990s. This caused a significant decrease in the countries’ GHG emission production during the first half of the decade, making 1990 as a reference year for emission reduction very favourable for most of them. However, some CEE countries are much more supportive of EU’s broader climate and energy goals, resulting in different approaches towards these issues within the region despite the countries’ common communist legacy and experience with economic and political transition towards market economy and democratic regime. Therefore, it would not be correct to see the CEE as a homogenous region (see also Mišík 2017). On the contrary, this edited volume opens the CEE ‘box’ and

1 Introduction: Central and Eastern European Perspectives …

5

looks into individual countries, differentiating between the ambitious ones and those that—for various reasons—prefer to be laggards in the energy transition process. To provide an even more complex picture, the edited volume dedicates its final section to examining energy transition challenges faced by countries from South East Europe (SEE), very closely connected to the EU via existing legal frameworks (especially the Energy Community, as well as various agreements with the EU). Moreover, as perspective members, these countries will be important contributors to the EU’s mid- and long-term climate and energy goals. Viewed from this perspective, knowing their energy transition paths is as important as knowing the trajectory of existing member states—for example, Croatia signed the Energy Community Treaty obliging it to transpose the Union’s energy and climate acquis communautaire in 2005, long before it became a member state with co-decision competences regarding EU’s climate and energy goals. We can expect a similar pattern being repeated with other countries from the SEE region, which means that a current examination of their preferences in connection to energy transition can help us better understand their future positions as EU member states. The study of the still under-examined CEE region proposed in this edited volume can promote our understanding of the energy transition to a carbon-neutral economy not only in the European context, but also on a global scale. Lessons learned from the aforementioned thirtyyear transition period in the CEE region—most notably the challenges connected to the transition to a market economy and democratic regimes during the 1990s, the countries’ efforts to become EU members and adapt to EU rules (including energy governance) during the early 2000s, or the struggle to effectively implement common climate and energy policies within a community with significant divergence in economic performances among its member states—have wider applicability. What follows is a more detailed examination of these issues, which highlights the complexity of the CEE region and its countries, the study of which can provide us with interesting arguments for the burgeoning discussion on energy transition. The following section provides a brief overview of climate governance and energy transition at both the global level and within the EU, the latter being a crucial ‘playground’ for the CEE countries, not only in energy and climate areas.

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2

Climate Change and Energy Transition

Negative environmental and climate changes during the 1980s have forced decision-makers to approach these issues from a global perspective. The main idea supporting a global approach is the nature of the issues connected to climate and the environment: namely, while the sources of pollution may be local, their consequences are global and therefore require international cooperation. As a result of the changing position towards nature itself, the beginning of the 1990s was marked by strong development in the climate and environmental area, with the Earth Summit taking place in Rio de Janeiro in June 1992, following the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) the previous month. The ‘ultimate objective’ of the Convention was to achieve ‘stabilization of greenhouse gas concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system’ (UNFCCC 1992, p. 9). After entering into force in 1994, it set non-binding limits for GHG emissions for individual countries, thus becoming the very first agreement of its kind. This goal was upgraded in 1997 when the Kyoto Protocol was adopted, setting legally binding limits for GHG emissions and arguing that human activities, especially emissions of these gases, are responsible for global warming. However, due to prolonged and problematic ratification by the parties, the Protocol entered into force only in 2005, only a few years before its expiry in 2012. The expiration day was eventually extended by the so-called Doha Amendment, which has, however, not been ratified. Canada withdrew from the Kyoto Protocol in 2012, while the US never ratified it, citing as reasons the high costs of the legally binding limitations of GHG emissions and subsequent loss of competitiveness for its industry. More recently within the UNFCCC framework, the Paris Agreement was signed in 2016 with the goal of ‘holding the increase in the global average temperature to well below 2° C above pre-industrial level’, while trying to keep this level to an 1.5° C increase (UNFCCC 2016, p. 3). The Paris Agreement thus directly linked climate change to human activities, especially industrialization. The document entered into force in November 2016, when fifty-five countries responsible for at least

1 Introduction: Central and Eastern European Perspectives …

7

55% of GHG emissions ratified the Agreement. Both the EU and its member states are parties to the Agreement and were among the first to ratify it when the European Parliament approved its ratification (European Commission 2016). The EU’s ratification meant crossing the 55% threshold necessary for the Agreement to come into force. At the time of writing (June 2020), the Paris Agreement has been ratified by a total of 189 out of the 197 parties to the Convention (UNFCCC 2020). However, in November 2019 President Donald Trump announced that the US will withdraw from the Agreement, that will happen, according to the Agreement’s rules, in November 2020 (Duke 2019). The Agreement thus loses one of the major GHG emitters which means a significant pushback for the whole document. In order for the EU to meet these goals, the European Commission (EC) has proposed a set of mid-term targets in the energy and climate areas, together with the overall goal of achieving carbon neutrality by 2050 (by reducing the amount of released emissions by 80–95% compared to 1990). Recognizing the detrimental role that the energy sector plays in GHG emissions, the EC has focused on improving the sector as a way to meet EU goals connected to the Kyoto Protocol, as well as the Paris Agreement. The first major set of targets developed at the EU level was the 2020 Energy and Climate package,3 which includes three main dimensions: (i) increase of the share of RES in the energy mix (20% at the EU level); (ii) improvement of energy efficiency (reducing energy consumption by 20% compared to the projected 2020 levels); and (iii) decrease of GHG emissions (by 20% compared to 1990). Because of the equal values of the goals, the package was termed the ‘20-20-20 by 2020 initiative’. The package was supported at the 2007 European Council meeting, and its final version adopted by the European Parliament and European Council in December 2008. Even before this, the EU set up the Emission Trading System (ETS) in 2005, based on the cap and trade principle. On the one hand, the principle sets the total limit for certain GHG emissions (cap) that is being reduced over time causing the decrease of the total amount of emissions produced; on the other hand, it allows companies to trade allowances. ETS covers the main industrial pollutants (such as power plants and manufacturing plants), thus creating a non-ETS sector which is also covered in the 2020

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package by the GHG goal, via the so-called Effort Sharing mechanism, which supports binding national targets in this area. The ETS system has faced several problems connected to the steep drop of allowance price following the economic crisis in the late 2000s and was later revised to better reflect the changed situation. Notwithstanding this, the development at the beginning of the 2010s indicated that the goals set at the EU level within the 2020 package would be met. In addition to further development in the climate policy area, the EU and its member states therefore decided to adopt a more ambitious plan in October 2014. The 2030 energy and climate framework revised the goals in the three areas governed by the previous package. After further adjustments made in 2018, the current (mid 2020) EU-wide targets are as follows: (i) binding target to cut GHG emission by 40% of GHG compared to 1990 (different levels for ETS and non-ETS sectors); (ii) binding target at the EU level to increase RES share to at least 32% of the final energy consumption; and (iii) increase energy efficiency by 32.5% compared to projections. Although the mechanism of how to achieve the 2030 goals has yet to be provided at the time of this writing, steps have been taken towards achieving the 2020 goals: a decision was made at the EU level to develop national binding targets in order to reach the EUwide targets. For example, within the goal of achieving the 20% share of RES in the final energy consumption by 2020, individual member states agreed on their own national binding targets that are supposed to contribute to the EU-wide target (European Council 2014).

3

Energy Transition and Central and Eastern European Countries

Although EU member states from the CEE are taking part in the common goal of achieving targets set up within the 2020 energy and climate package together with the rest of the EU, some of them support the argument that the load carried by individual members should correspond to their economic performance and should not jeopardize their competitiveness. This argument is further underlined by the necessity of these countries to catch up with their Western counterparts and develop

1 Introduction: Central and Eastern European Perspectives …

9

their economies, i.e. economic transition. The argument claims that the richer EU countries should therefore contribute more to the common goals, while the less developed (and poorer) members (including those from the CEE) should be given a chance to expand their economies with minimal or no climate-related limitations. As a result of the decisionmaking process at the EU level, the contributions of individual countries to the EU-wide climate and energy goals differ significantly, with some of them committing to only a small increase of renewables in their final energy consumption, being allowed to increase (rather than decrease) their energy consumption, or increase their GHG emissions in the non-ETS sector under the Effort Sharing mechanism. For example, the annual emission allocation for the Czech Republic, Poland, or Romania increased by 4.4, 10.1, and 13.2 tonnes of CO2 equivalent respectively between 2013 and 2020 (European Commission 2017). The situation is different when it comes to the 2030 targets: namely, under the new governance rules the member states were requested to draft the National Energy and Climate Plans (NECPs) until the end of 2018. These were supposed to include targets in the areas covered by the 2030 energy and climate framework, as well as road plans for reaching those goals for the period between 2021 and 2030. The Commission assessed the NECPs during the first half of 2019 and the governments of member states were supposed to finalize their plans until the end of the same year. As of June 2020, not all NECPs have been submitted to the Commission yet. Some of the CEE countries presented their negative position towards the common, EU-wide 2020 climate and energy goals as early as 2007, during the first round of negotiations on this package. After the Commission presented the scheme, several CEE member states voiced their reluctance regarding several aspects of the proposal, especially the binding nature of the RES target at the member state level. However, at the European Council meeting in March 2007, the parties agreed that the share of RES in the final energy consumption will be binding at the EU level. The Visegrad Four countries (the Czech Republic, Hungary, Poland, and Slovakia), together with Bulgaria, were pushing strongly for such a change (Government of the SR 2007). Representatives of these five CEE counties even coordinated their positions towards the energy and climate package prior to the Council meeting (ibid.). Several CEE

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countries also expressed their negative attitudes towards more ambitious targets in 2015, during the preparation of the EU’s position before the Paris Conference. Although some EU member states were advocating more ambitious EU targets, Bulgaria, the Czech Republic, and Poland (together with Italy) were against more aspiring climate goals by 2030 (ENDS Europe 2016). Poland has proved to be one of the most active—and vocal—critics of the EU’s energy and climate goals, earning the nickname the ‘least climate ambitious’ EU member state (Skjærseth 2018), even though it has traditionally been a strong supporter of EU-wide solutions on the deepening of integration in other areas of energy policy, especially energy security (Judge and Maltby 2017). While several EU countries (not only from the CEE) expressed their reservations about the changes in the ETS system that were supposed to be a response to the problems in this area caused by the economic crisis (Skovgaard 2013), Poland was the only one who voted against the so-called backloading mechanism during the final vote in the Council of the EU (Council of the EU 2013).4 Even stronger opposition arose against the Market Stability Reserve (MSR), which was supposed to put some of the allowances into a reserve without decreasing their final amount. Once again, Poland was on the opposing side and, together with four other countries from the region (Hungary, Bulgaria, Romania, and Croatia) and Cyprus, voted against the MSR mechanism (European Parliament 2015). Poland even sued the Commission at the Court of Justice of the EU for the MSR Decision. Interestingly enough, with the exception of Poland, the coalitions of the CEE countries opposing climate and energy proposals at the EU level have been changing during the last decade. A similar situation also happened in 2019, after the Commission proposed A European strategic Long-Term Vision for a Prosperous, Modern, Competitive and Climate Neutral Economy, one of its main goals being the development of carbon-neutral economy by 2050 (European Commission 2018). This notion did not gain full support from all member states at the June 2019 European Council meeting and was therefore not adopted (European Council 2019a). Once again, the opposition stemmed from the lack of support for the proposal on the part of the Czech Republic, Estonia, Hungary, and Poland. The draft of the

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Council’s conclusions mentions 2050 as the deadline for the development of a carbon-neutral economy (Morgan 2019a); however, after these countries remained firm in their negative position towards such a commitment, the conclusion was modified so as to claim that efforts will be made to ensure ‘a transition to a climate-neutral EU in line with the Paris Agreement’ (European Council 2019a, p. 1). The European Council returned to this issue already at its December 2019 meeting that was more successful as it ‘endorse[d] the objective of achieving a climateneutral EU by 2050’ (European Council 2019b, p. 1). The support was, however, not unanimous as ‘one member state, at [that] stage, [could not] commit to implementing’ that objective (ibid.). This member was Poland, however, it was not identified in the document. In spite of this, the EU leaders proclaimed that the EU reached an agreement of climate neutrality (Morgan 2019b). The main argument these countries present in support of their negative position towards the various dimensions of energy transition (for example, increase of RES usage, increase of energy efficiency, or decrease of GHG emissions) is high costs of such measures. For example, after the European Council in June 2019, Czech Prime Minister Andrej Babiš claimed that the climate and energy targets presented by the Commission are too far in the future and that the Union should focus on shortterm goals until 2030, without threatening economic development or employment (iRozhlas 2019). This was the main reasoning behind the Czech opposition to the Commission’s 2050 climate and energy plan. Similar arguments were presented in the draft of Slovak National Energy and Climate Plan (Ministry of Economy of the SR 2018) in connection to the increase of RES share in the final energy consumption before 2030. The Slovak Ministry of Economy claimed that the 4%-increase (to 18% by 2030) is sufficient given the high share of nuclear energy in the electricity sector and of natural gas in the heating sector, both of which significantly reduce the level of GHG emissions. Moreover, according to the argumentation presented in the draft NECP, there is only a limited possibility to increase RES share in a cost effective manner in Slovakia, which is why the ‘potential for higher implementation of renewables should be looked for in member countries with a higher share of solid fuels’ (Ministry of Economy 2018, p. 37). In its evaluation of the NECP,

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the Commission recommended Slovakia to present more ambitious goals so that the share of RES would be at least 24% in 2030. This number was based on the formula presented in Regulation 2018/1999 on the Governance of the Energy Union and Climate Action (European Commission 2019). A few other CEE countries have also presented their reservations and opposed a concrete deadline for reaching carbon neutral economy in the EU as proposed by the Commission. However, the rest of the EU (under German and French leadership) supported this goal, including several countries from the CEE region (for example, Lithuania). This very short overview shows that although CEE countries are sometimes seen as a homogenous group with a given set of preferences in the energy and climate area, this is not so; on the contrary, significant differences exist between them. These countries indeed have a lot of common traits, as well as a shared legacy of communist regimes, and the transition towards democracy and market economy which had an impact on their energy and climate policies. Moreover, the process of EU accession added another layer of pressure on their domestic policies, including the two examined in this volume. Although this type of pressure had a negative impact in many areas, the harsh consequences of economic changes have had the occasional unexpected silver lining. The hard transition towards the market economy at the beginning of the 1990s signified the closing of heavy industry in several CEE countries, which led to a sharp decrease of GHG emissions. This, in turn, placed these countries in an advantageous position vis-à-vis the emission goals that use 1990 as a benchmark. Moreover, environmental movements were an important part of anti-communist opposition during the 1980s (Pavlínek and Pickles 2000; Szulecki 2020), as the degradation of the environment was a necessary consequence of the communist perspective on nature, which demanded that it be conquered and reshaped so as to serve humans. Being the only type of societal engagement tolerated by the communist regimes, the environmental movements created the foundation for a civil society at the beginning of the 1990s (Podoba 1998). Despite these commonalities, it would be a mistake to include all the CEE countries into one group and approach them from the same perspective if for no other reason, then because their post-1989 developments show that the trajectories the individual countries have chosen

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significantly differ in the area of politics, as well as many policies including energy and climate. Moreover, even the countries’ starting points were different: some of them were part of the Soviet Union until 1991 (Baltic States), others were under strong influence as satellite countries (Visegrad Group (V4)—the Czech Republic, Hungary, Poland, and Slovakia), while others had a special relation with the Soviet Union that enabled them to also establish contacts with the Western world (Yugoslavia or Romania). Although this is a very preliminary argument which needs to be further examined, one can claim that these differences are also mirrored in the energy policies of these countries. As an example, let us consider the nuclear sector: while the Lithuanian nuclear power plant (NPP) Ignalina used the Chernobyl-style nuclear reactor (RBMK) utilized predominantly in the Soviet Union, the satellite countries of Eastern Europe built a VVER-type reactor similar to PWR (pressurized water reactor) used in Western Europe (Paks in Hungary or Dukovany in the Czech Republic). On the other hand, Romania built the Canadian-type reactor (CANDU), while the Slovenian NPP Krško is a Westinghouse PWR type. Thus, while the communist regimes in all these countries fell in 1989/1990 and the states—which shared many other characteristics—embarked on a path towards democracy and market economy, even their starting points were not uniform. Moreover, the countries’ different trajectories during the 1990s (with war breaking out in the countries of the former Yugoslavia and authoritarian tendencies in Romania and Slovakia) led to further differences among them and also predetermined their path towards EU membership. The main issue this edited volume examines is the differences between EU member states from the CEE region in terms of their approach to energy transition. Why are some of these countries more supportive of setting more-or-less ambitious goals in the energy and climate area at the EU level, while others are reluctant or even openly oppose such goals? To put this central question differently: What are the different paths of the CEE countries when it comes to energy transition? What are the factors that influence individual CEE countries on their way towards carbon-free energy production? These are the questions the individual chapters in this edited volume will try to answer by examining the different aspects of energy transition in the CEE and the countries of the region. The

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chapters consider these questions bearing economic and policy transformation in mind and discuss the mutual links between these two processes that have been taking place in the CEE region during the last three decades. In spite of its centrality in energy policy discussion within the EU, the CEE region is rather under-researched. Being at the epicentre of the 2009 natural gas crisis (Bocquillon and Maltby 2017), many countries of the region have refocused their energy policy on the issue of energy security and begun actively cooperating with the Commission, which was also very interested in the issue, on improving their performance in this area (Mišík 2019). Moreover, as the above discussion suggests, the countries of the CEE region have played a rather important role in developing the EU’s energy and climate policy, not by supporting more ambitious goals, but by slowing down the process. However, despite a rather significant policy development at the domestic level as well as within the EU, academic research has so far focused especially on the energy security issue, leaving topics related to energy transition in the background (but see Carmin and van Deveer 2004; Leal Filho et al. 2019). For example, Ostrowski and Butler (2018) published a volume on the region’s energy security issues, while several edited volumes include Poland as a case study (e.g. Skjærseth et al. 2016; Szulecki 2018). A more complex overview of energy transition issues in the CEE region is still missing—with this edited volume trying to fill this gap—although 2019 and especially 2020 saw an increase of academic papers published on this topic including a special issue in Energy Policy on V4 (many of which are referred in individual chapters of this volume). The main aim of the edited volume is therefore to help us better understand the energy transition that is under way within the EU by focusing on the under-researched countries of the CEE region that play an important role in the policy development. The different arguments used by these countries to support their specific national positions and preferences that are not always in line with the perspective of other member states and aim to slow down the consequences of the energy transition process can provide us with a better understanding of the challenges facing energy transition at the global level as well. The edited volume thus aims to contribute to a more general discussion on energy

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transition beyond the EU experience. Its goal is therefore to deepen our understanding of the CEE countries and draw lessons for the governance of energy transition at both the EU and the global level.

4

The Present Volume

The edited volume is a collection of original research on energy transition in the CEE region. It is a rich volume consisting of eighteen contributions, with an Introduction and Conclusion. The high number of contributions reflects the increased interest in the region and the variety of issues that can be included under the energy transition headline. We have decided to include the widest possible range of topics, approaches, methodologies, and theories in order to facilitate the discussion on energy transition and not limit it to predefined boundaries. The contributions propose to critically investigate the current state of energy transition in the region. By providing a diverse selection of energy transition topics the research included in the edited volume presents readers with a variety of topics, disciplinary angles, critical approaches, and practices. We believe that such an approach to energy transition research will enable us to draw new and interesting conclusions applicable beyond the region and develop universal policy implications. Although the process of energy transition is already under way, there is still a long way to go, which is why new and innovative approaches to this topic are a precondition for a successful transformation of our economies into post-carbon ones. Penned by both seasoned researchers and early-career scholars, as well as practitioners, the individual contributions in this volume offer perspectives from within the region (i.e. by authors with affiliations from the region), but also from other parts of Europe. In this way, the volume aims to avoid some of the pitfalls of existing research which looks at (not only) this region from a specific angle utilizing only a regional perspective, or, alternatively, only a perspective external to the examined countries. Both points of view have significant advantages connected not only to challenging the development of research within the postcommunist space, but also to better providing access to primary data

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within the region. However, such one-sided approaches also have many disadvantages, which make a compelling case for the type of cooperation the volume strives for. The combination of researchers from within and outside the region brings the best of the two worlds together, creates balance between different perspectives, and at the same time includes researchers and practitioners form the region in a broader discussion on energy transition. In this way, the edited volume also contributes to the development of energy research and the conversation between scholars across regions, and will thus promote a better understanding of the complex issues at hand. In addition to their academic experience, some of our contributors have also worked as practitioners, which significantly contributes to providing a complex picture of energy transition. Such first-hand experience with the energy transition process offers an invaluable contribution to the discussion as it points towards the different boundaries and limitations the process of transition towards a carbon-free energy system (and economy) experiences in the decision-making process. Furthermore, the practitioners’ angle also provides insight into the different inputs and incentives that influence the transition process, and translates the complex targets and policy recommendations into day-to-day steps towards energy transition. From Economic to Energy Transition: Three Decades of Transitions in Central and Eastern Europe presents a contribution to the pertinent ongoing discussion on the various energy challenges humanity is facing in connection to energy transition, which will be necessary in order to prevent irreversible changes to our environment that would make the Earth uninhabitable. The CEE countries have not always been supportive of the EU’s (the Commission’s) goals in the energy and climate area, and remain vocal about their reservations in this area, providing insight into the factors behind the opposition towards energy transition. By studying these countries, we can therefore gain insight into the broader issues of the limitations of energy transition on the global scale, which can help us better understand the process as a whole and the reasons behind these countries’ opposition to more ambitious or more radical solutions. Especially the arguments linking energy transition (and climate goals) to the slowing of economic performance and

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the subsequent claim that the energy transition has to be led (as well as performed) by the most developed (i.e. rich) countries can also be useful for our understanding of energy transition on a global scale.

5

Structure of the Book

The eighteen contributions to this volume (plus Introduction and Conclusion) are organized into four Parts. Following the editors’ Introduction, Part I entitled Energy Transition Challenges examines main issues related to the energy transition in CEE in connection to historical legacies, the relationship with the Russian Federation as the region’s main energy supplier, and economic transition. Part I combines different approaches towards energy transition challenges as it examines them from a policy perspective, as well as the perspective of public opinion. It examines these issues from a regional perspective, a perspective of smaller sub-regions (V4 and Baltic States), or perspective of an individual member states. Part II entitled Different Paths to Energy Transition examines individual CEE countries and their approach to energy transition, but looks at the issue also from a sub-regional perspective. It not only covers the many countries of the region, but also analyses the role of different energy sources, including the place of gas as a so-called bridging energy source, in energy transition. Part III entitled Legal and Political Aspects of Energy Transition analyses different legal and political aspects of energy transition within the CEE region that stem from the EU membership: the pre-accession negotiations, the post-accession compliance with the EU rules, and the judicial oversight of these. Part IV, View from the Neighbourhood , examines countries of South and East Europe. The edited volume addresses the energy transition experience of these countries as they are closely connected to the EU with its energy rules (via Energy Community as well as other commitments), thus contributing to the overall energy transition within Europe. The following Chapter 2 by Zsolt Gál provides an overview of the economic development within the CEE region since the fall of communist regimes at the very end of 1980s and its connection to consumption

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of energy and efficiency of its use. The chapter argues that sharp economic downturn following the fall of communism contributed to significant decrease of energy consumption while the countries decreased energy intensity thanks to changes in their industry. However, the development of the energy sector was very limited with persisting pathdependencies that restrict energy transition within the region. Szabo and Deak argue in Chapter 3 that the current energy transition is not the first one in the CEE region during the last century. The first energy transition occurred when the Soviet Union imposed on these countries its own view of energy mix that was closely connected to its ability to provide energy sources to these countries and in this way control them. They argue that a similar process is happening also recently, as the current energy transition in the CEE region is also pushed through by an external actor, the EU. In the following Chapter 4 Hou wonders why the CEE countries actually committed themselves to EU-led energy transition and its ambitious climate goals since they are much less technologically and financially prepared compared to the rest of the EU, and their perspective on energy security differs which further negatively influences their ability to undergo the transition. He argues that the countries have entrapped themselves in the transition due to its increased monetized and moralized dimensions in order to prevent potential socioeconomic damages. Chapter 5 by Surwillo and Popovic examines public attitudes in V4 countries towards energy transition and climate change arguing that while these countries’ energy policies are often in contrast with ambitious policies of the EU, public attitudes towards sustainable energy are very similar to the rest of the EU. However, the analysis unveiled differences between individual countries with the public in the Czech Republic and Slovakia being more critical towards RES, and Hungarians supporting these to a very high degree. Chapter 6 by Jirušek and Vlˇcek looks at the Baltic States and examines the consequences of their close infrastructural connection to the Russian Federation that are mostly linked to energy security issues. These overshadowed other energy policy issues including transition and environmental concerns and are still—through the Nord Stream gas pipeline and Astravets nuclear power plant—in the forefront of the Baltic States’ energy policies. Chapter 7 written by Feenstra examines the gender dimension of energy poverty in the case of Bulgaria.

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She argues that a just energy transition is a challenge for this country as the implementation and enforcement of rather well-developed gender equality legislation is limited due to weak political support. Part II starts with Chapter 8 by Weiner who examines energy transition in Poland and Hungary. He shows that both countries have similar goals when it comes to energy transition, including utilization of nuclear power for electricity generation or increasing share of RES. However, both countries will move from the old ways of electricity generation towards more sustainable options only slowly and with limited political engagement. In Chapter 9 Crnˇcec, Suˇci´c, and Merše examine energy transition in a small CEE country, Slovenia. Utilizing multilevel perspectives (energy regime, landscape, and niche) they identify challenges connected to energy transition, especially a conflict between climate related goals like the need to increase the share of RES, and conservation goals that prevent future development of solar or wind energy sources, but also important innovation leadership that fosters energy transition within the country. Chapter 10 by Janeli¯unas investigates the factors influencing energy transition in Lithuania and highlights the main transformation vectors of the country’s energy system. The country’s foremost priority since the early 1990s has been improvement of energy security by connecting to the European market and decrease dependency on the Russian Federation. While the gas sector has been transformed to fulfil these objectives, the electricity sector still faces energy security challenges that prevent it from a bigger focus on sustainability goals. The following Chapter 11 by Figulová and Wertlen utilizes the Regional Security Complex theory to examine the position of Visegrad Group countries towards energy transition, and argue that there is a difference in perception of energy security between these countries and the EU. While the former focus on the supply security of fossil fuels, especially natural gas, the latter emphasizes RES and energy efficiency. The last chapter in Part II written by Zoll (Chapter 12) examines in more detail the case of Poland and its position towards RES vis-à-vis the traditional energy source coal. He argues that energy transition in this country is significantly influenced by the reliance on domestic coal that will not be phased out from the energy mix any time soon. The state is the primary actor within the electricity sector and due to existing

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path-dependencies it creates in a negative environment for a low-carbon energy transition. The opening chapter of Part III (Chapter 13) is written by Alvares Garcia Júnior who utilizes the Economic Analysis of Law to argue that EU member states can choose to delay transposition of EU rules related to energy transition if the costs stemming from them outweigh benefits. He identifies a series of ‘disincentives’ that suggest that the CEE countries will be left behind in the energy transition process. Szegedi’s Chapter 14 looks into the role of the Court of Justice of the EU on Hungarian energy policy. The country introduced several changes in its energy sector that enhanced competences of the regulatory authority and put several free market principles into question. These, together with the decision to support development of two new units in Paks nuclear power plant (so called Paks 2) were challenged in front of the Court. The chapter examines these cases and discusses their impact on Hungarian energy policy. The following Chapter 15 by Mišík and Prachárová examines the influence of the EU on Lithuania and Slovakia in the period after they became its members. Looking at the EU’s request to close down several nuclear reactors in these countries considered to be unsafe, the chapter argues that the pre-accession conditionality did not work in the period when these countries fulfilled this requirement and shut down the reactors in question. The authors thus claim that it was not the threat of possible consequences that made Lithuania and Slovakia close the problematic reactors; thanks to social learning they understand that this is a proper way how to behave—independently of possible negative consequences of non-compliance. The last Chapter 16 by Karimi and Rodi of Part III analyses the Baltic Sea Region and thus creates a bridge to the last section of the volume as it looks at the CEE region from a broader perspective including also other countries into the analysis. This highlights the fact that climate change and energy transition is a complex issue that does not know borders and therefore we need to examine connected issues in their complexity (including geographical complexity). The chapter identifies five main challenges of the Baltic Sea Region arguing that energy security stays its principal challenge—and thus also key energy policy issue.

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Part IV examines the countries of South East Europe and consists of three chapters. The first one, Chapter 17, written by Sadik-Zada and Gatto discusses the place of natural gas within South East Europe and the possibilities that diversification of gas infrastructure brings for the countries of the region. They argue that natural gas can serve as a transition fuel for many countries currently focused on coal; moreover, natural gas infrastructure can later serve also for renewable types of gas. In the following chapter (Chapter 18), Milenkovi´c and Pešteri´c examine the influence of the EU on Serbia in sector of RES of electricity. Serbia adopts EU’s energy acquis communautaire even if it is not an EU member, but as a member of the Energy Community helps to implement EU internal energy market rules in its contracting parties. The main challenges identified by the chapter are an unstable legal framework, lack of legal certainty, and missing long-term planning that limits the investments into RES and thus has a negative impact on energy transition. The last chapter of the volume written by Young (Chapter 19) compares energy transition in Croatia and Serbia. The countries share similar historical legacies and also legal framework through membership in the EU and Energy Community that are the main drivers of transition towards RES and carbon-neutral energy sectors. The domestic factors have also an impact on this process, as available domestic fossil fuels are considered to support energy security and are subject to pricing control. Moreover, traditional models of energy governance are not suitable for an effective and swift implementation of renewables that results into limited development of these energy sources. The last text in the book is the editors’ Conclusion that discusses the main findings of the volume and offers guidelines for future research.

Notes 1. EU member states have also agreed on common goals directly connected to the GHG decrease within the 2020 and 2030 energy and climate packages. Although these—and other goals, see below—also exist at the EU level, the member states hold the main tools in their hands as they decide about their respective energy mixes.

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2. Existing literature also connects renewable energy sources to geopolitics, even though they are usually considered to be domestic energy sources. However, Overland (2019) claims that existing arguments in this area focus on one-sided scenarios and threat maximization, and that the connection between renewables and geopolitics is far from being direct or clear. 3. Although this was not the first set of goals at the EU level, the fact that it developed a set of binding targets makes it the most important one to date. 4. The idea behind the backloading mechanism was to delay the auctioning of about 900 million ETS allowances from 2014–2016 to 2019–2020, in order to deal with the allowance surplus that caused its price to plummet after 2008. The 2020 ETS allowance reduction target stayed the same and only the timing of allowance distribution was supposed to change.

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Richman, J., & Ayyılmaz, N. (2019). Can the US and Europe Contain Russian Power in the European Energy Market? A Game Theoretic Approach. Energy Strategy Reviews, 26, 100393. Skjærseth, J. B., Eikeland, P. O., Gulbrandsen, L. H., & Jevnaker, T. (Eds.). (2016). Linking EU Climate and Energy Policies: Decision-Making, Implementation and Reform. Cheltenham: Edward Elgar. Skjærseth, J. B. (2018). Implementing EU Climate and Energy Policies in Poland: Policy Feedback and Reform. Environmental Politics, 27 (3), 498–518. Skovgaard, J. (2013). The limits of entrapment: The negotiations on EU reduction targets, 2007–11. Journal of Common Market Studies, 51(6), 1141–1157. Smil, V. (2017). Energy and Civilisation: A History. Cambridge: MIT Press. Szulecki, K. (Ed.). (2018). Energy Security in Europe: Divergent Perceptions and Policy Challenges. London: Palgrave Macmillan. Szulecki, K. (2020). Securitization and State Encroachment on the Energy Sector: Politics of Exception in Poland’s Energy Governance. Energy Policy, 136, 111066. Thunberg, G. (2019). No One Is Too Small to Make a Difference. London: Penguin Books. Topalli, M., & Ivanaj, S. (2016). Mapping the Evolution of the Impact of Economic Transition on Central and Eastern European Enterprises: A Coword Analysis. Journal of World Business, 51(5), 744–759. UNFCCC. (1992). United Nations Framework Convention on Climate Change. United Nations. http://unfccc.int/files/essential_background/background_p ublications_htmlpdf/application/pdf/conveng.pdf. Accessed 24 May 2020. UNFCCC. (2016). Paris Agreement. United Nations. https://unfccc.int/sites/ default/files/english_paris_agreement.pdf. Accessed 24 May 2020. UNFCCC. (2020). The Paris Agreement. United Nations. Climate Change. https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agr eement. Accessed 12 June 2020.

Part I Energy Transition Challenges

2 From Economic Transformation to Energy Transition: The Legacy of Thirty Years of Post-Communist Development Zsolt Gál

1

Introduction

Since the fall of the Iron Curtain, post-communist Central and Eastern European (CEE) countries experienced dramatic changes regarding the size and structure of their economies and populations and witnessed substantial increases in energy efficiency. Considering the international empirical literature, these are the three most important human (anthropogenic) factors influencing energy consumption and resulting pollution and greenhouse gas (GHG) emissions. Thus, it is not surprising that this development had a major impact on energy use in the region that evolved differently compared to Western Europe (see Table 1). Moreover, some other intervening factors also had direct and indirect Z. Gál (B) Department of Political Science, Faculty of Arts, Comenius University in Bratislava, Bratislava, Slovakia e-mail: [email protected] © The Author(s) 2021 M. Mišík and V. Oravcová (eds.), From Economic to Energy Transition, Energy, Climate and the Environment, https://doi.org/10.1007/978-3-030-55085-1_2

29

1,455,636.71 1,108,869.46 1,106,789.75 28,202.76 49,994.57 9610.95 9632.11 7953.88 16,294.43 29,149.54 103,343.64 63,183.17 5733.85 21,281.94 344,380.83 19,689.16 253,869.32

1,451,526.34 1,160,463.42 1,135,254.99 23,374.14 41,862.27 5176.71 7896.87 4635.41 8854.52 26,043.72 99,791.66 46,788.90 6091.96 17,782.06 288,298.22 13 631.01 163,688.08

1995 1,498,113.24 1,235,179.39 1,211,327.15 18,634.42 41,289.72 4733.30 8444.15 3864.41 7349.89 25,230.55 89,218.36 36,756.99 6447.87 17,731.33 259,700.98 13,570.34 133,868.37

2000 1,603,532.95 1,319,967.34 1,296,812.40 20,080.92 45,534.94 5273.65 9818.61 4589.05 8982.81 28,510.28 92,581.55 38,686.29 7324.48 18,698.94 280,081.51 16,047.37 141,228.93

2005 1,559,626.48 1,277,453.53 1,252,334.29 17,915.89 45,598.61 5669.91 9470.35 4629.45 7081.61 26,592.42 101,583.44 35,004.68 7216.01 17,711.55 278,473.90 15 607.79 132,572.88

2010 1,449,028.23 1,183,850.11 1,162,189.36 18,681.16 42,367.22 5435.68 502.67 4379.40 7184.43 25,203.24 95,784.43 31,872.95 6444.25 16,264.85 262,120.28 14,808.58 92,898.57

2015

1,479,266.62 1,194,725.49 1,171,910.69 18,983.41 43,551.72 6297.55 677.24 4793.26 7795.05 26,712.29 106,784.00 33,596.07 6827.42 17,045.60 281,063.60 15,527.99 93,828.21

2018

Note Gross inland consumption is the total energy demand of a country or region, it includes consumption by the energy sector itself; distribution and transformation losses; most importantly final energy consumption by end users (total energy consumed by households, industry, transport and other services and agriculture); and ‘statistical differences’ not captured on primary and final energy consumption but does not include energy (fuel oil) provided to international maritime bunkers. ktoe: thousand tonnes of oil equivalent Source Eurostat (2020)

EU27 EU14 Euro area Bulgaria Czechia Estonia Croatia Latvia Lithuania Hungary Poland Romania Slovenia Slovakia EU11 Serbia Ukraine

1990

Table 1 Gross inland energy consumption (in ktoe)

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effects on the energy sector. The characteristics of economic transformation, most notably timing, depth, comprehensiveness and endurance of economic reforms largely influenced the robustness and the sustainability of economic growth and consequently the energy demand. European Union (EU) accession of CEE countries during three rounds of the ‘Eastern’ enlargement (2004, 2007 and 2013) was another major influencing force. Nevertheless, at the same time we can witness remarkable path-dependency regarding CEE energy mix and infrastructure, and often supply routes and import sources as well. The aim of this chapter is to examine the development of the main determinants of energy use in the eleven post-communist EU member states1 during their three decades of economic transformation. We map the key factors in accordance with the findings of the international empirical literature analysing the driving forces behind energy consumption and related GHG emissions—both general and region-specific studies are considered here. We also try to investigate the importance of other intervening factors like the nature of the economic transition process, the EU accession and the historic heritage in the energy sector. All of this is put to a comparative framework: the countries from our sample are not only compared with each other but also with some extra-EU post-communist countries and ‘old’ EU member states.

2

Short Review of the Literature

The findings of the literature are quite uniform regarding the main determinants of energy use/consumption and resulting pollution and GHG emissions. Economic (notably gross domestic product (GDP) per capita and industrial development) and demographic (e.g. population, urbanization) factors, climate, and energy prices and efficiency, respectively their changes are almost universally present across empirical studies as significant variables influencing energy consumption and related environmental problems (Iwata and Okada 2014; Jorgenson et al. 2018; Yeboah et al. 2013; Zaharia et al. 2019). Originally, based on two studies from the early 1970s (Ehrlich and Holdren 1971; Holdren and Ehrlich 1974) the most important factors were presented within an analytical

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tool of the so-called IPAT (Impact = Population × Affluence × Technology) accounting equation. It illustrated that environmental impacts (I) are dependent on the changes in Population (P), Affluence (A), which refers to per capita consumption or production and Technology (T), which indicates the environmental impact per unit of consumption or production (Salim and Shafiei 2014). According to Rosa et al., ‘the emissions scenarios that underpin the climate projections of the IPCC [Intergovernmental Panel on Climate Change] use a form of the IPAT unit elasticity2 logic to predict future emissions. Emissions are assumed to be a simple multiplicative function of population, affluence per capita, energy use per unit of affluence, and emissions per unit of energy use’ (2015, p. 36). Since then this basic model has been reformulated—to fit standard quantitative methods in social research like regression analysis—several times and new intervening factors (like urbanization, population density, share of industry, etc.) have been added in many studies. Dietz and Rosa (1994) with their ‘stochastic reformulation’ converted the simple IPAT accounting model into a standard general linear model, where instead of unit elasticity there is a possibility of assessing the importance of each of the’driving forces’ of GHG emissions based on empirical observations. Large number of empirical studies mapping the impact of various factors on energy use/GHG emissions followed. Their results are often controversial, especially in the case of high-income countries. In some affluent societies energy consumption is growing in spite of improving efficiency and rather moderate GDP and population growth, in other countries these factors result in slowly declining consumption (e.g. Rosa et al. 2015). Thus, there is an ongoing debate among the researchers on how the main driving forces are influencing energy use and GHG emission under certain circumstances, respectively considering other intervening factors. Nevertheless, the pure existence of the most important factors having an influence is barely questioned, if at all. Although not every analysis includes all factors mentioned above or finds them similarly important, usually the explanation is in the research design and not in the small relevance of these factors. For example, many studies are focused on per capita energy consumption or CO2 emissions and obviously, changes in total population do not play a role here.

2 From Economic Transformation to Energy Transition …

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In addition, a large part of the literature addresses the environmental impact only and ignores energy use. Since renewable energy sources (RES) are having no or very low GHG emission levels, they are not contributing much to the environmental impact. However, they are fully counted when considering energy consumption. Thus, the impact (statistical significance) of the major determinants is going to be higher in the case of energy use than in the case of emissions. For example, the growth of GDP is going to increase energy use more than GHG emissions and the difference between the two is rising parallel to the rising share of RES in the energy mix. Another limitation of the international literature is that most studies are focusing on the effects of modernization assuming economic and population growth. There are very few analyses taking a closer look on rare but existing examples of declining economic activity and population levels. Studying former Soviet republics after the collapse of the Soviet Union during the 1990s York (2008) demonstrated that main drivers of energy use/CO2 emissions work the other way around as well. The collapse of the Soviet Union led to declining population size, economy, level of urbanization, level of industrialization, and international trade (de-modernization), and this resulted in dramatic CO2 emissions reductions. Only limited research has been conducted separately on CEE postcommunist countries regarding this issue (e.g. Marinas, et al. 2018; Sineviciene et al. 2017). Nevertheless, their empirical findings are in line with the general literature; the same anthropogenic (human) factors are identified as the main drivers of energy use and GHG emissions. One research on the determinants of CO2 emissions in twenty-eight countries of the EU from 1971 to 2012 even demonstrated that the influence of factors like population, industry and energy use is higher in the thirteen CEE countries3 than in the EU15 group (Morales-Lage et al. 2016). On the following pages we address the development of these main driving factors in the CEE countries.

34

3

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Economic Growth and Energy Consumption

Between 1990 and 2018 we witnessed a different development in energy consumption within the EU: while energy use declined in the EU11 substantially, by more than 18%, it increased slightly in the whole EU, and consequently a bit more in the EU14 (so called ‘old member states’) as well as in the Eurozone (see Table 1). During the twenty-eight-year period among the EU11 Slovenia was the only country where energy demand increased significantly, Poland basically experienced stagnation and all other countries saw their energy use declining. In some countries the decline has been dramatic, for example, energy consumption roughly halved in Romania and Latvia. On the contrary, in the EU14 energy consumption increased everywhere, except for Germany, where it declined by almost 12% (Eurostat 2020). However, even this could be largely attributed to the declining demand in the former communist East German ländern (the largest decline followed in the first years after German reunification). When separating the last decades to different periods we see that in the EU11 the decline in energy consumption happened mostly until 2000, during the first years of economic transformation; later consumption levels stabilized or even increased in most countries (see Table 1). Again, in the EU14 it happened the opposite way: consumption was on the rise until 2006 and later it slowly declined. While the link between economic growth and energy consumption is not simple and straightforward—as discussed below—the effects of large slumps in economic activity are evident. It is clear at first look that the collapse of postcommunist economies in the early 1990s dramatically reduced energy use in CEE countries and that the ‘great recession’ had also significant negative impact on it across the EU between 2008 and 2013. Economic growth is one of the most important driving forces of energy use and GHG emissions—all models using large samples and long time periods show parallel growth (i.e. strong correlation) of these variables interrupted only by relatively short-time breaks during recessions and/or major economic upheavals like oil price shocks and financial crises (Salim and Shafiei 2014). However, after reaching a certain level

2 From Economic Transformation to Energy Transition …

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of socio-economic development the relationship becomes more complicated. As the ecological modernization theory (EMT) argues, in affluent, postmaterialist societies the socio-economic dynamic shifts towards politics and consumer demand preferring more environmentally friendly growth which is illustrated by the so-called environmental Kuznets curve (EKC) having an inverted U-shape (Rosa et al. 2015). In this case further GDP growth leads to declining and not increasing pollution and GHG emissions. In contrast, treadmill of production (TOP) theory argues that since market economies are predicated on increasing profits through expansion, energy consumption and forms of related pollution continually expand (Jorgenson et al. 2018). If this is the case, greater efficiency is not associated with as much reduction in total energy use as might be expected (‘rebound effect’), or paradoxically it leads to increasing energy use because production and consumption rise faster than efficiency improves (‘Jevons paradox’; Rosa et al. 2015). The international literature provides empirical evidence to underpin both theoretical frameworks but in the case of developed countries analyses suggest a slight decoupling of GDP and emissions (Jorgenson et al. 2018). This is certainly the case in the EU and especially in the EU15/EU14 where in spite of economic (and population) growth energy consumption declined during the last ten to fifteen years, although this process hasn’t been linear and uninterrupted (Table 1; Tsemekidi Tzeiranaki et al. 2018). Regarding our sample, the EU11, the picture is not so clear, as in some countries economic resurgence during the last two decades led to rises in energy consumption, or it was at least stagnating in spite of dramatic rises in efficiency and—in most cases—declining populations. Thus, the region had been somewhere in between what we would expect considering the two theoretical frames, EMT and TOP—still closer to the latter but gradually moving towards the former. Roughly this is a position corresponding to the level of economic development of the CEE region—most of it had been still considerably lagging behind Western Europe, but gradually catching up with it. The few available empirical studies show statistically significant influence of GDP growth on energy consumption and GHG emissions in CEE (Li et al. 2020; Marinas, et al. 2018; Sineviciene et al. 2017). It is important to note that the samples

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used in these studies often include a few post-Soviet non-EU countries, most notably Ukraine and the Russian Federation. From 1990 on, during the transition years, the post-communist countries experienced different economic performance but all of them went through deep recessions combined with high inflation and rising unemployment. There is a near-consensus in the literature that those countries that enacted bold, radical, and comprehensive reforms at early stages returned to economic growth faster while partial and non-reformers postponing the necessary changes experienced longer periods of contraction (Åslund 2013; Bokros 2013; Havrylyshyn et al. 2016; Roaf et al. 2014). Most early reformers not only had shorter, but also less severe declines and/or grew much more rapidly once growth resumed (Wyplosz 2014). After economic growth returned during 1995–2007 some of the CEE countries—for some periods—even belonged to the fastest growing economies on the globe (Balázs et al. 2014). The endurance of reforms without reversal or significant dilution especially in the early stages of transformation also proved to be crucial to ensure sustainable growth (Bokros 2013). The elimination of high inflation was another necessary precondition where early and more comprehensive reformers were more successful. They managed to bring down rampant inflation earlier, experienced lower average inflation, and typically avoided hyperinflation4 (Åslund 2013; Wyplosz 2014). The academic and political debate regarding the speed of economic reforms had been overshadowed by a much misleading controversy whether ‘shock therapy’ or gradualism was the optimal way of enacting the reforms. The misleading nature is rooted in the fact that only part of the necessary reforms, like liberalization and macroeconomic stabilization could be implemented in a relatively short time as a ‘big bang’ shock; others, like privatization need more time and better administrative capacities, let alone institution building or creation of a new legal framework (Bokros 2013). While the fast introduction of some reforms was desperately needed to stabilize the economy—e.g. price liberalization and macroeconomic stabilization to cut inflation, some others rather needed more time, and a gradual approach to plan and implement to reach feasible solutions. We share the opinion of the experts (Backé et al. 2019, p. 15) from the Austrian National Bank who argue that:

2 From Economic Transformation to Energy Transition …

37

[t]he real dividing line between successful and less successful early transition cases was not the one between shock therapy and gradualism, but rather between approaches that were time consistent and comprehensive and those that were not. The latter often resulted in stop-and-go policies and recurrent setbacks.

For comparison of the speed and comprehensiveness of economic reforms we use the framework of the Transition Indicators produced by the European Bank for Reconstruction and Development (EBRD) covering the period 1989–2014.5 Following the logic of Havrylyshyn et al. (2016) we provide an average of six indicators, the so-called Transition Progress Index (TPI; see Table 2). Although far from being perfect, this measurement is widely accepted in the literature to illustrate the progress in economic transformation, especially when mapping the dynamics of changes and the relative position of transition countries. Table 2 demonstrates large divergence between the transition economies from the very beginning, already in the early 1990s. The ‘shock therapy’ appliers, notably Czechoslovakia and Poland were the fastest reformers (Poland ensured a huge gain already in 1989–1990 being the first comprehensive reformer), soon followed by the Baltic countries once they gained independence in 1991. However, Hungary and the two exYugoslav republics, Croatia and Slovenia started at higher levels since their communist regimes experimented with market reforms already in the 1980s—this is partially true for Poland as well. Thus, most of our EU11 sample belongs to the group of early and comprehensive reformers with enduring transition process, only Slovenia and Croatia were lagging a bit behind the Visegrad Group (V4) and the Baltics—in the case of Croatia it could be largely explained by the Yugoslav wars. From the EU11 only Bulgaria and Romania were implementing the reforms much slower, but they had still better performance than most Balkan or postSoviet counties. These not only lagged behind V4 and the Baltics but also experienced significant setbacks as the examples of Belarus, Russia, and Serbia illustrate. Falcetti et al. (2006) found a robust correlation between progress in market-oriented reforms (measured by EBRD transition indicators) and cumulative growth in most transition countries. Additionally, they

1.2 1.9 1.0 1.2 2.0 1.0 1.2 2.6 1.0 1.0 1.9 1.0 1.0 1.9 1.0

1990

2.1 2.1 2.5 1.4 2.6 1.3 1.3 2.6 1.4 2.5 2.1 1.0 1.2 1.9 1.0

1991

2.2 2.3 3.0 1.9 2.9 2.3 1.9 2.8 1.9 3.0 2.1 1.2 2.3 1.9 1.2

1992 2.3 2.5 3.4 2.9 3.2 2.7 2.9 3.3 2.3 3.3 2.9 1.7 2.6 1.9 1.3

1993 2.7 2.8 3.6 3.4 3.6 3.1 3.2 3.4 2.6 3.5 3.1 1.7 2.7 1.6 1.6

1994 2.6 3.0 3.6 3.6 3.7 3.1 3.2 3.4 2.6 3.5 3.2 2.2 2.9 1.6 2.4

1995 2.6 3.3 3.7 3.6 3.8 3.4 3.3 3.6 2.6 3.6 3.3 2.1 3.1 1.6 2.6

1996 3.1 3.4 3.8 3.6 3.8 3.4 3.3 3.6 3.1 3.7 3.3 1.8 3.2 1.6 2.8

1997 3.1 3.4 3.8 3.6 3.9 3.4 3.3 3.7 3.2 3.7 3.4 1.6 2.9 1.6 2.8

1998 3.2 3.4 3.8 3.7 3.9 3.4 3.4 3.7 3.2 3.8 3.4 1.6 2.8 1.6 2.8

1999 3.4 3.4 3.8 3.8 3.9 3.5 3.4 3.7 3.3 3.8 3.5 1.7 3.0 1.6 2.9

2000

Notes Simple average of the transition indicators in six areas (see Note 5 for definition) * Czechia left EBRD in 2007 and therefore there are no data available for the following years Source EBRD (2020)

Bulgaria Croatia Czechia* Estonia Hungary Latvia Lithuania Poland Romania Slovakia Slovenia Belarus Russia Serbia Ukraine

3.6 3.6 3.9 4.0 4.0 3.8 3.9 3.9 3.4 4.0 3.6 1.9 3.2 2.8 3.2

2005

3.5 3.7 N/A 4.1 4.1 3.8 3.9 4.0 3.6 4.0 3.6 2.2 3.2 3.2 3.3

2010

3.5 3.8 N/A 4.1 3.9 3.9 3.9 4.0 3.7 3.9 3.6 2.2 3.3 3.2 3.3

2014

Table 2 The speed and comprehensiveness of economic transition—average Transition Progress Index of the EBRD (scale 1 to 4.3)

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provided an evidence that higher growth in turn is associated with further reform efforts—a kind of virtuous circle. One of the ‘shock therapy’ reformers, Poland was the first to return to growth in 1992, just after two years in recession, followed in the next year by the Czech Republic, Romania, and Slovenia and in 1994–1995 Croatia, the rest of V4, and the Baltics joined the group (see Table 3). Slower or partial reformers typically spent much longer time in a recession; for Bulgaria it took eight years to recover, for Ukraine ten. Additionally, many of them soon fell back into deep recessions: Russia in 1998, Bulgaria in 1999, and Romania during 1997–1999. The recessions were much deeper in the post-Soviet counties including the Baltics in spite of their early and comprehensive reforms. Cumulative output losses were estimated to 18% in V4, 28 per cent in Southeast Europe but reached a staggering 42% in the Baltics and even more, 52% for the rest of former Soviet Union (Åslund 2013). The shocking decline, comparable only to the Great Depression was calculated after considerable revision of data—earlier statistics reflected a far greater slump. It is important to note here that much of the literature questions the reliability of output data both before and during the transformation process for various reasons (ibid.). Indeed, GDP data in the early years of transition for some countries are considered so unreliable that they are missing from the datasets of organizations like the World Bank or IMF. In Table 3 we filled the gap by importing data from an original 1998 IMF World Economic Outlook publication. Therefore, these data should be interpreted with caution. The fastest recovery (returning to pre-recession output levels) happened in the case of those early reformers, which experienced less severe recessions. Poland was the first to reach its initial 1990 GDP in 1994, followed by Slovenia in 1995, Czechia in 1996 and Slovakia in 1997, while Romania and Bulgaria needed thirteen years to exceed the 1990 GDP level, and Latvia and Lithuania fifteen years (Marinas, et al. 2018; see Fig. 1). The above presented various indicators reveal that: [t]he first quarter century [of transformation] was characterized by rapid divergence. The gap in per capita GDP between the richest and poorest countries in this group grew from $14,000 in 1990 to $21,000 in 2010.

Bulgaria Croatia Czechia Estonia Hungary Latvia Lithuania Poland Romania Slovakia Slovenia

Bulgaria Croatia Czechia Estonia Hungary Latvia Lithuania Poland Romania Slovakia Slovenia Belarus Russia Ukraine

−10.8 −17.0 −15.9 −7.9 −11.9 −11.1 −6.0 −7.0 −12.9 −15.9 −17.0 −1.2 −5.0 −10.6 2004 6.4 4.2 4.9 6.8 4.8 8.3 6.5 5.1 10.4 5.3 4.4

2003 5.2 5.6 3.6 7.6 4.1 8.4 10.5 3.6 2.3 5.5 3.0

−7.2 −5.6 −0.4 −7.5 −2.3

−3.5

1991

1990

−9.1 −7.5 −0.4

−8.4 −34.0 −8.5 −21.6 −3.1 −35.2 −19.6 2.0 −8.8 −8.5 −34.0 −9.6 −14.5 −9.7 2005 7.2 4.3 6.5 9.5 4.2 10.7 7.7 3.5 4.7 6.6 3.8

1992 −11.6 −8.0 0.6 −8.2 −0.6 −11.4 −17.1 4.3 1.5 −3.7 2.8 −7.6 −8.7 −14.8 2006 6.8 5.0 6.9 9.7 4.0 11.9 7.4 6.2 8.0 8.5 5.7

1993 −3.7 5.9 2.7 −1.6 2.9 2.2 −11.2 5.2 3.9 6.2 5.3 −11.7 −12.7 −22.8 2007 6.6 5.3 5.6 7.6 0.2 10.0 11.1 7.0 7.2 10.8 7.0

1994

Table 3 Real GDP growth (annual change, in %) −1.6 6.6 5.9 2.2 2.5 −2.1 2.3 6.7 7.1 7.9 4.1 −11.1 −4.1 −12.1 2008 6.1 1.8 2.7 −5.1 1.1 −3.3 2.6 4.2 9.3 5.6 3.5

1995 −8.0 5.9 4.5 4.9 0.1 2.5 5.2 6.2 3.9 6.9 3.6 2.8 −3.6 −9.9 2009 −3.4 −7.4 −4.8 −14.4 −6.7 −14.2 −14.8 2.8 −5.5 −5.5 −7.5

1996 −14.2 6.6 −0.6 13.0 3.1 8.9 8.3 7.1 −6.1 4.4 5.0 11.4 1.4 −3.2 2010 0.6 −1.5 2.3 2.7 0.7 −4.5 1.5 3.6 −3.9 5.7 1.3

1997 4.3 1.9 −0.3 4.3 3.9 6.4 7.5 5.0 −4.8 4.1 3.3 8.4 −5.3 −1.8 2011 2.4 −0.3 1.8 7.4 1.8 6.3 6.0 5.0 2.0 2.9 0.9

1998 −8.3 −0.9 1.4 −0.4 3.1 2.8 −1.1 4.5 −1.2 −0.1 5.3 3.4 6.4 −0.2 2012 0.4 −2.2 −0.8 3.1 −1.5 4.1 3.8 1.6 2.1 1.9 −2.6

1999 4.8 3.7 4.3 10.1 4.5 5.6 3.8 4.3 2.9 1.2 3.7 5.8 10.0 5.9 2013 0.3 −0.5 −0.5 1.3 2.0 2.3 3.6 1.4 3.5 0.7 −1.0

2000 3.8 3.3 2.9 6.0 4.1 6.3 6.5 1.2 5.2 3.3 3.2 4.7 5.1 5.2 2014 1.9 −0.1 2.7 3.0 4.2 1.9 3.5 3.3 3.4 2.8 2.8

2001 6.0 5.1 1.7 6.8 4.7 7.1 6.8 1.4 5.7 4.5 3.5 5.0 4.7 5.3 2015 4.0 2.4 5.3 1.8 3.8 3.3 2.0 3.8 3.9 4.8 2.2

2002

40 Z. Gál

7.0 7.3 9.5

1990

11.4 7.2 11.8

1991 9.4 6.4 3.1

1992 10.0 8.2 7.6

1993 8.6 8.5 8.2

1994 10.2 5.2 2.2

1995 0.2 −7.8 −15.1

1996 7.8 4.5 4.1

1997 5.5 5.1 5.5

1998 1.7 3.7 0.2

1999 1.0 1.8 0.0

2000 1.7 0.7 −6.6

2001 −3.8 −2.0 −9.8

2002

Notes Some data from the early 1990s are not available in the database and were added from the May 1998 World Economic Outlook publication. Data for Czechia and Slovakia between 1990 and 1992 are those for former Czechoslovakia and data for Croatia and Slovenia between 1990–1992 are data for former Yugoslavia Source IMF (1998 and 2020)

Belarus Russia Ukraine

2 From Economic Transformation to Energy Transition …

41

42

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240%

Czechia

Bulgaria

190%

Estonia

Hungary

Lithuania

Latvia

Poland

Romania

Slovakia

Slovenia

140%

90%

40% 1991

1992

1993

1994

1995

1996

1997

2000

2004

2008

2009

2014

Fig. 1 Recession and following recovery in CEE countries (Note GDP in PPP, constant 2011 international $ where 1990 = 100%. Source Marinas, et al. [2018] based on World Bank data)

Political regimes ranged from oriental despotism to consolidated democracy. In 2013 Georgia ranked 8th on the World Bank’s ranking of ease of doing business, while Uzbekistan ranked 146th. (Treisman 2014, p. 274)

Although being the most important, the speed and extent of the reforms could not explain alone this spectacular differentiation. The record of most post-Soviet states should be better in the 1990s and much worse in the 2000s when focusing only on the EBRD’s transition indicators. The literature provides many explanations how other intervening factors shaped economic growth (Åslund 2013; Backé et al. 2019; Treisman 2014), the most important are: i. Historic heritage including the experience with democracy and market economy before communism, the length of the communist era (seventy years in most Soviet Union, around four decades in the rest of the countries including the Baltics) and the nature of the communist regime and especially its economic policies. Some countries, most notably Hungary, Yugoslavia and Poland experimented with market reforms already during socialist times. The existence

2 From Economic Transformation to Energy Transition …

ii.

iii.

iv.

v.

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of (supressed) ethnic conflicts—in most countries the transformation was relatively peaceful but not in war distressed Western Balkan countries or some Post Soviet republics. The initial state of economy and degree of macroeconomic imbalances. Slovenia and the Czech Republic had the highest GDP per capita and they maintained their leading position through the whole period. Some countries were heavily indebted; some others had very few foreign loans. Poland was making a large reform progress at the very beginning, had a shallow recession and caught up quickly, but it happened after a troubled decade in the 1980s when Poles experienced political and economic upheaval, including martial law, recession, sovereign debt default, high inflation, and severe shortages. Geographical location. Proximity to and share of export to Western Europe and Russia. For example, V4 countries (especially their western regions) close to core Western European export markets attracted large volumes of foreign direct investment which fuelled an industrial revival: automotive and electro technical clusters were born. Commodity prices. Most notably oil and related natural gas price development had a major direct effect on counties heavily dependent on the export of raw materials, like Russia, Turkmenistan, Azerbaijan, and Kazakhstan and indirectly on other post-Soviet countries largely dependent on the Russian market. Oil price development helps to explain the economic underperformance of the region in 1990s and the boom between 1999 and 2008. Political leadership, public opinion, values, norms and preferences shared by the public.

The tale of two neighbouring countries, Poland and Ukraine is probably the best illustration of the shocking divergence during the transformation period. As the main architect of Slovak economic reforms, former vice-premier and minister of finance, Ivan Mikloš emphasized, in 1992 the Polish per capita GDP (measured using purchasing power parity (PPP) standards) was just 7% higher than the Ukrainian, but twentyfive years later the difference was a staggering 3.5-fold (Mikloš 2019). While Poland was implementing its version of shock therapy called the

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‘Balcerowicz plan’ in the early 1990s, the Ukrainian president Kravchuk refused radical reforms in order to ‘defend the people from the pain of shock therapy’ (ibid.). Here we return to our main argument: energy consumption has developed roughly in parallel to economic output. Ukrainian energy use was 2.5 times higher in 1990 compared to Poland but it declined drastically while the Polish went down only mildly and later increased to take over Ukraine from 2015 (see Table 1). Regarding our sample, the energy use largely followed GDP growth patterns as the comparison of Tables 1 and 3 demonstrates. Finally, it is important to underline that history does not follow a unilinear and deterministic course, the transformation process has been and remains rather cyclical, none of the achievements are guaranteed and reforms are not irreversible (Åslund and Djankov 2014; Bokros 2013). During the transition years there were several attempts to stop or reverse the reforms. When they succeeded and endured, this usually resulted in rent seeking, large corruption, cronyism, oligarchic order and state capture combined with various forms of authoritarian political rule (Åslund 2013). An early but not prevailing attempt to establish an oligarchic order occurred in Slovakia between 1993 and 1998 under the governments of Vladimír Meˇciar; more prolonged and successful attempts derailed transition at least for a decade in Croatia and Serbia under local strongmen, Franjo Tud-man and Slobodan Miloševi´c (Bokros 2013). Paradoxically, a new wave of authoritarian and partially antimarket tendencies often referred as the ‘illiberal turn’ began after 2010, already within the EU, led by two former successful early reformers Hungary and Poland, but populist attacks on liberal democracy, market economy and the rule of law emerged across the region (e.g. Ágh 2019). Nevertheless, what turned out to be crucial, most of the EU11, namely the V4, Baltics and Slovenia managed to sustain their early achievements in the first ten to fifteen years of transition. Slow or partial reforms or aborting the reform process was most damaging during this period (Åslund and Djankov 2014).

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The Impact of Demographic Decline

By changing the number of people involved in economic activities and household consumption, demographic development is one of the strongest determinants of energy consumption. Obviously,— when assuming unchanged per capita consumption—increasing population will increase the demand for energy and declining population lowers this demand. The relationship between population growth and changing energy consumption and GHG emissions has been analysed and confirmed by many empirical studies, and these were collected in a number of review articles (e.g. Liddle 2014). DeLong and Burger (2015) using historic data and analysing long time periods demonstrated that— although with large fluctuations—overall energy use increases surpassing any population increases in all countries/time series studied. Many studies using large samples like OECD or EU28 and covering decades of development confirmed the strong positive influence of population growth on energy consumption (e.g. Petrovi´c et al. 2017; Salim and Shafiei 2014; Zaharia et al. 2019). However, the connection between population and energy use is rather complex with many other intervening factors. York (2018, p. 172) claims that: growth in energy use is not infrequently higher in nations with lower population growth rates than in those with higher population growth rates. For example, in both China and India, growth in GDP per capita, energy use, and electricity consumption have been higher in the twentyfirst century than at the end of the twentieth century, even though their population growth rates have been lower.

Here we enter again the debate between the EMT and TOP theoretical frames. The latter would indicate that when a society becomes more affluent, then significant growth in energy consumption could occur despite low population growth or even declining population. On the other hand, the former suggests that after reaching a certain level of economic development and living standards population growth and

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energy consumption become negatively correlated—hence the inverted U shape of the environmental Kuznets curve. The EU as a whole has certainly been in this stage of development for some years now. While the EU28 population increased by 4.7% between 2000 and 2016, all major indicators of energy consumption (i.e. gross inland consumption, final energy consumption and primary energy consumption6 ) declined in the same period (Tsemekidi Tzeiranaki et al. 2018, 2019). The EU27 also experienced slightly declining gross inland energy consumption between 2000 and 2018 despite a moderate population growth (see Tables 1 and 4). However, as we noted above, the CEE region did not yet enter the increasing GDP and population—the declining energy use and emissions scheme corresponded to the EMT theory. On the other hand, between 1990 and 2019 the CEE lost 8.3 million people meaning a population decrease by 7.5%—seven countries witnessed declining populations, Poland stagnated and only Czechia, Slovakia and Slovenia had significant but very moderate population increase (Table 4). The decline in some countries has been shocking. Between 1990 and 2017 due to a combined effect of natural population decrease and emigration, Bulgaria, Latvia and Lithuania observed a shrinking of their populations by 19% or more, unprecedented in times of peace (ÖAW 2018). While population growth slowed down in the 1980s, and Bulgaria and Hungary experienced shrinking populations during that decade, the radical demographic change came after the fall of the Iron Curtain with declining fertility and especially increasing net emigration, which became the most important component of population decline. The average emigrant stock’s share on total population in the EU11 was 13.4% in 2017 but with large differences: while Poland was close to the average (12.4%), the three Balkan countries, Bulgaria, Croatia and Romania, as well as two Baltic states, Latvia and Lithuania recorded over 18% cumulative emigration to population ratio (World Bank 2019). Meanwhile, with the exception of Estonia (15.1%) in the rest of the group the share of emigrants was below 10%. Overall, it was the combination of lower mortality (higher life expectancy), lower emigration, and significant immigration which ensured that some countries (notably Czechia, Slovakia and Slovenia)

405,466,907 8,846,417 10,315,669 1,472,190 4,598,095 2,508,761 3,404,194 10,709,463 35,413,434 22,132,670 1,893,064 4,963,301 106,257,258

418,030,739 8,767,308 10,362,102 1,570,599 4,772,556 2,668,140 3,693,708 10,374,823 38,038,403 23,211,395 1,996,377 5,287,663 110,743,074

1990 428,473,834 8,190,876 10,278,098 1,401,250 4,497,735 2,381,715 3,512,074 10,221,644 38,263,303 22,455,485 1,987,755 5,398,657 108,588,592

2000 440,660,421 7,421,766 10,462,088 1,333,290 4,302,847 2,120,504 3,141,976 10,014,324 38,022,869 20,294,683 2,046,976 5,390,410 104,551,733

2010 446,824,564 7,000,039 10,649,800 1,324,820 4,076,246 1,919,968 2,794,184 9,772,756 37,972,812 19,414,458 2,080,908 5,450,421 102,456,412

2019 449,244,296 6,402,584 10,738,001 1,319,301 3,833,236 1,746,604 2,452,166 9,520,613 37,397,916 18,063,702 2,079,967 5,420,101 98,974,191

2030 445,418,291 5,605,134 10,611,979 1,250,961 3,403,390 1,584,931 2,175,738 9,041,782 34,861,135 16,735,514 2,024,248 5,087,967 92,382,779

2050

Note The data between 2030 and 2100 refer to the Eurostat’s baseline scenario projections Source Eurostat (2020)

EU27 Bulgaria Czechia Estonia Croatia Latvia Lithuania Hungary Poland Romania Slovenia Slovakia EU11

1980

427,415,310 4,809,607 10,196,812 1,157,762 2,924,925 1,442,474 1,893,953 8,499,508 31,669,769 15,059,393 1,893,609 4,572,716 84,120,528

2070

408,247,190 4,022,290 9,855,386 1,045,509 2,317,197 1,337,345 1,625,481 7,887,290 27,523,771 13,343,506 1,796,441 3,916,753 74,670,969

2100

Table 4 Population (up to 2019) and population projections (2030–2100) in the EU27 and its CEE member states (in persons)

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managed to avoid population decline; while higher mortality, low immigration and especially high emigration led to dramatic declines in the case of Balkan and Baltic countries. Moreover, it seems to be that this was just the start since population projections estimate further shocking declines. By 2100 the populations of Bulgaria, Croatia, Latvia and Lithuania are expected to be half compared to 1990 levels while most other counties will decline by over 20%, with only Czech and Slovenian populations projected to shrink at a smaller rate (Table 4). Population decline certainly had and will have a negative impact on energy consumption. Some past predictions of energy use emphasized the role of slowing population growth in helping to curtail expansion in energy consumption (York 2007). York (2008) also demonstrated with the example of the former Soviet Union in the 1990s how population decline contributed to falling CO2 emissions—although factors like GDP fall and deindustrialization were more important. Nevertheless, the international literature still largely neglects the possible negative impact of significant population declines on energy use and related emissions. To our knowledge there is no empirical study exclusively mapping the effects of dramatic (actual and predicted) falls of CEE populations in this area. One possible reason might be that large peacetime population declines are a relatively recent phenomenon and geographically limited to CEE countries with few cases; the other that many studies concentrate on per capita consumption or emissions where the size of total population does not play a role.

5

EU Accession and Path Dependency

EU accession of CEE countries had widespread direct and indirect effects on energy use. Regarding the latter, there is ample empirical evidence that by providing access to the single market, EU structural and cohesion funds, and the inclusion into the common agricultural policy as well as by the adoption of acquis communautaire , EU accession (and before that even just its prospect) had a major positive impact on economic growth, institution building and environmental sustainability in the region (Backé et al. 2019). On the other hand, the integration process

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and later the EU membership has further facilitated emigration from CEE countries (ibid.). However, it is important to add that non-EU post-Soviet and Balkan countries have similar or even higher emigration rates (e.g. Armenia, Moldova, Albania, Bosnia and Herzegovina and North Macedonia had higher emigration to total population ratio than any EU11 country; World Bank 2019). There are two major areas when considering the EU’s direct effects on the energy sector in the EU11: First, the decommissioning of old, ‘firstgeneration’ Soviet-designed nuclear reactors; second, various support schemes and funding to achieve the EU’s climate goals and related investments to RES and energy efficiency, connecting national energy networks, etc. The first effect has concrete consequences. At the time of their accession to the EU three of the EU11 countries agreed to shut down eight nuclear reactors before the end of their scheduled lifetime, namely at the Kozloduy nuclear power plant (NPP) in Bulgaria (units 1– 4); the Jaslovnské Bohunice V1 NPP in Slovakia (2 units); and Ignalina NPP in Lithuania (2 units) while the EU itself committed to providing financial assistance for safe decommissioning of those reactors (European Commission 2018). The decision to shut down the so-called High Power Channel Type Reactors (RBMK) and other first-generation Sovietdesigned nuclear reactors followed the disaster at the similar Chernobyl nuclear power plant in the Soviet Union in 1986. The early shutdown of these reactors reduced the share of nuclear energy in the energy mixes of the three countries—in the case of Lithuania to zero. It is much more complicated to assess the direct effects of various EU legislations and support schemes on the EU11 energy sector. No doubt, the EU is the most important driver of the clean energy transition through its climate and energy policy; it provides a wide range of legislative tools that aim to directly or indirectly improve energy efficiency in the different covered economic sectors (i.e. residential, tertiary, transport and industry sectors)7 and financial support using the pricing of emissions through the EU emissions trading system, and the EU budget (Heilmann et al. 2020; Tsemekidi Tzeiranaki et al. 2018). The EU’s Connecting Europe Facility (CEF) has been also crucial in co-financing the development of energy infrastructure in the EU11, e.g. natural gas,

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oil and electricity transmission systems, smart grids, and especially interconnectors that increase the energy security in the region by building new supply routes or expanding the existing ones and enabling diversification of the import sources (Oravcová and Mišík 2018). It is also a widely attributed benefit of EU membership that in less developed regions a large share of public infrastructure investments is financed from the common budget. For example, between 2015 and 2017 the share of public infrastructure investments financed by the EU Cohesion Policy with the exception of Slovenia (slightly below 30%) ranged from 42 per cent (Czechia) to 80% (Croatia) in the EU11 countries (CAN Europe 2020). However, during the budget period from 2014 to 2020, on average, only 9.7% of all European Regional Development Fund and Cohesion Fund sources were planned to be spent on RES, on energy efficiency (in housing, public buildings and business), on electricity infrastructure (like transmission, distribution, storage or ‘smart grids’), and research and innovation and technology transfer focusing on the low-carbon economy (ibid.). In the EU11 countries this share varied between 6.6% in Slovakia and 14.4% in Lithuania and Slovenia. Thus, in CEE member states Brussels’ direct effect regarding its energy and climate goals has been rather limited. The same applies for energy intensity, i.e. the ratio between gross inland energy consumption and GDP. Energy intensity declined in the EU28 counties between 1990 and 2017 and the largest decreases were recorded in the post-communist countries, although except for Romania they still have above average levels of energy intensity (Table 5). However, this was rather a gradual process and the CEE countries underwent the larger part of improvement before entering the EU (EEA 2019). In addition, large, historically unparalleled declines in energy intensity, or in other words, increases in energy productivity/efficiency, were rather a universal phenomenon in the post-communist world, and other non-EU countries followed similar patterns (Atalla and Bean 2017). These huge changes just further emphasized the vast energy inefficiency in communist regimes notoriously known for immense energy waste (Ürge-Vorsatz et al. 2006). Despite the considerable influence of EU legislation, policies and funding, thirty years after the fall of the Iron Curtain EU11 energy

100 166 139 170 106 108 102 123 120 84 118 127

−1.7 −2.8 −2.4 −3.8 −0.8 −2.9 −4.2 −1.8 −3.5 −4.3 −1.4 −3.7

RES

Other

27.8 33.8 25.7 0.0 0.0 0.0 0.0 36.6 0.0 11.4 42.3 62.6

16.4 48.6 55.5 0.0 0.0 0.0 0.0 11.5 77.4 17.5 26.6 7.0

13.6 0.6 0.7 0.0 29.2 0.0 0.0 12.7 5.5 33.5 0.2 1.8

8.8 0.2 0.4 0.0 16.7 0.0 3.2 6.4 1.6 13.8 0.0 0.1

29.9 16.6 16.3 27.0 52.1 99.7 94.4 28.6 14.2 22.9 29.4 25.4

3.5 0.3 1.5 73.0 1.9 0.3 2.3 4.2 1.4 0.9 1.5 3.1

11.0 3.3 0.7 5.6 10.0 2.0 34.6 2.3 8.7 11.5 0.0 0.0

3.6 3.1 2.5 0.0 0.7 0.0 1.7 1.1 0.1 2.9 1.7 1.8

Solar

Wind

Crude oil

Nuclear energy

Natural gas

in production of primary energy Solid fossil fuels

in gross electricity generation

Shares of production (2017, %)

Note Category ‘other’ (within primary energy production) includes natural gas liquids, additives and oxygenates (excluding biofuel portion), other hydrocarbons, peat, oil shale and oil sands, industrial waste (non-renewable) and non-renewable municipal waste Source European Commission (2019), EEA (2019), and Eurostat (2019)

EU28 Bulgaria Czechia Estonia Croatia Latvia Lithuania Hungary Poland Romania Slovenia Slovakia

Relative (2017, EU28 = 100)

Annual average change %

Energy intensity 1990–2017

Table 5 Energy intensity and energy mixes in EU11 countries compared to the EU28 average 2 From Economic Transformation to Energy Transition …

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mixes and infrastructures—with some minor exceptions—still strongly resemble late communist times. In 2017 solid fossil fuels made up 77.4% of Polish primary energy production8 but their share was around half in Czechia and Bulgaria, and Slovenia and Romania also had levels over the EU average (Table 5). Knowing this, it is not so surprising that from the CEE countries only Slovakia (2023) and Hungary (2030) had coal phase-out dates set in 2019 (the Baltics were coal free in electricity generation), the rest were without such deadlines, while from the EU15 only Spain had not yet adopted a deadline (Agora Energiewende 2020). In Estonia 73% of primary production falls to ‘other’ category but it is mostly oil shale and oil sands, basically just another form of fossil fuel. Some other countries have more balanced energy mixes but it is either due to still notable domestic crude oil and natural gas production (Romania, Croatia and partially Hungary) or due to electricity produced in NPPs inherited from the communist era (Slovakia, Slovenia and partially Hungary, Bulgaria, Czechia and Romania). Some countries have relatively high shares of RES, however again, it is usually made from traditional hydropower (usually socialist-era hydroelectric dams) and/or biomass (i.e. mostly burning wood). The share of the ‘new renewables’ is way below the EU average in the region (Table 5). Despite the very suitable geographic and climate conditions for solar investments in Bulgaria, Romania and Hungary and for using wind as an energy source in the Baltic countries, Poland and the Czech Republic, the majority of CEE countries lag behind Western Europe in wind and solar power capacity per capita (CISL 2019). From the region only Romania reached the EU average for the share of wind and solar in the electricity generation mix, and Lithuania was much above it. However, Lithuania imports a large part of its energy needs, including electricity, which is understandable when taking into account the loss of its single largest source of energy by shutting down the Ignalina nuclear facility in 2009 (Mišík 2019). While Lithuania has been one of the most import dependent countries in the EU with 75.6% share of outside sources regarding all fuels in 2017, some others like Slovakia, Hungary and Slovenia had also import rates over 50 per cent (European Commission 2019). Regarding natural gas and crude oil or oil products the import dependence in most CEE countries is around 100% (ibid.).

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The vast majority of these fuels is still coming from Russia via Sovietera pipelines. Moreover, nuclear fuel—coming exclusively from Russia to the Slovak, Hungarian, Czech and Bulgarian reactors—is not counted as import since nuclear energy is widely considered as a domestic source. Energy consumption in the CEE relies still heavily on burning domestic or imported fossil fuels which is in some cases combined with traditional RES (hydropower, biomass) and NPPs inherited mostly from the socialist era. This is pretty much a post-communist mix, literally. After thirty years of economic transformation, the energy transition towards clean and sustainable energy is still at the beginning stage across the region. Naturally, there are good reasons for the slow progress. While all spheres of society went through huge changes in the past decades, radical changes in the energy mix or infrastructure were not needed. As a few positive legacies of real socialism, EU11 countries inherited massive and unified energy systems with sufficient production and relatively well developed transmission networks (grids, pipelines) with high capacities (Ürge-Vorsatz et al. 2006). Additionally, although being aware of their weaknesses, the CEE countries considered Russia as reliable supplier at least until the 2009 gas crisis and did not perceive the need to improve their energy infrastructure and interconnections (Mišík 2010). Later, with the help of EU funds they tried to increase energy efficiency, diversify supply and interconnect national networks to increase energy security but the energy mixes, supply routes, and even sources (notably Russia) did not change a lot. However, currently with the ageing power plants and network infrastructure and increasing pressure from the EU to decarbonize energy production combined with the planned increase of financial resources, energy transition is more and more on the agenda. Especially when considering that the two most important renewables, wind and solar, finally became economically competitive (IRENA 2020). CEE countries might use the advantage of latecomers: skip the problems of the initial phase of transition and introduce the newest, competitive technologies. There is a good chance for speeding up energy transition in the region.

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Conclusions

The historically unprecedented economic (and political) transformation process in post-communist CEE countries led to huge changes in almost all spheres of society including a significant influence on human factors that are widely considered as the main determinants of energy use (economic growth, population, efficiency) in the literature. Consequently, energy consumption in the EU11 countries significantly declined from 1990 to 2018 moving on a different trajectory than the rest of the Union. In line with the findings of empirical literature, the largest declines in energy use were recorded in countries with largest output and population losses, namely the Baltic States, Bulgaria and Romania. Moreover, these countries were also among the best performers in reducing energy intensity. On the other hand, the combination of shorter and milder recessions (typically V4 countries and Slovenia) with slower population decline (Croatia, Hungary) or almost no decline (Poland) or even a population increase (Czechia, Slovakia, Slovenia) led to smaller drops in energy consumption. In two countries, Slovenia and Poland, consumption actually increased; the former also had smaller gains in energy productivity, and the latter has been the best economic performer of the region. Naturally, other factors, both anthropogenic—like energy poverty or energy prices—and non-anthropogenic—like climate and weather conditions—might have influenced energy use but due to their smaller relevance and limited space, they are not discussed in this chapter. The speed, depth and endurance of early economic reforms largely influenced economic output (and to a smaller extent probably demographic development as well) and thus, indirectly energy consumption. Early reformers had smaller output losses and/or returned to growth earlier and once they did, experienced higher growth rates compared to late or partial reformers and non-reformers. Most EU11 countries, except for Bulgaria, Romania and partially Croatia belonged to the group of early and comprehensive reformers. EU membership had widespread indirect (most notably positive influence on economic growth) and direct (fostering energy efficiency and co-financing investments to its improvement) effects on energy use. However, the former is hard to asses and

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the latter has been rather limited, with the exception of shutting down eight Soviet-designed nuclear reactors before their scheduled lifetime in Bulgaria, Lithuania and Slovakia. Paradoxically, compared to most other spheres, the changes within the energy sector itself were limited in many aspects. With some minor exceptions we can witness remarkable path-dependency regarding CEE energy mixes, transmission infrastructures, and partially also supply routes and import sources. Consequently, after thirty years of economic transformation, the energy transition towards an environmentally more sustainable energy production with a high share of renewable energy sources is still at the beginning stages in most of the region. Acknowledgements The work was supported by the Slovak Research and Development Agency Grant No. APVV-16-0062.

Notes 1. The eleven post-communist Central and Eastern European ‘new’ member states of the European Union are the following: the Baltic states, namely Estonia, Latvia and Lithuania, the Visegrad Four (V4) countries, Czechia, Hungary, Poland and Slovakia; and Slovenia that joined in 2004, Bulgaria and Romania that joined in 2007 and finally Croatia that joined in 2013. 2. The original form of the IPAT equation presupposes that P, A and T each have ‘unit elasticity’—meaning a 1% change in any one of them produces a 1% change in I—Impacts (Rosa et al. 2015, p. 36). 3. The two small island states, Cyprus and Malta as ‘new member states’ from the 2004 EU enlargement were also counted as part of the EU13 CEE countries in the study in spite of not being post-communist countries (see: Morales-Lage et al. 2016). 4. From our sample Poland experienced a brief hyperinflation period in January 1990 and Bulgaria had two episodes in 1991 and 1997 (Wyplosz 2014). 5. Over the period of 1989–2014 EBRD assessed progress in transition through a set of indicators in the post-communist countries (after 2014 the composition and scope of indicators and related methodology has changed substantially). The measurement scale ranged from 1 to 4+ (the mathematic

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equivalent being 4.3), where 1 represented little or no change from a rigid centrally planned economy and 4+ represented the standards of an industrialised market economy. Assessments were made in six areas: (1) Large scale privatization, (2) Small scale privatization, (3) Governance and enterprise restructuring, (4) Price liberalization, (5) Trade and foreign exchange system, 6. Competition policy (EBRD 2020). 6. The primary energy consumption is equal to the gross inland consumption excluding non-energy users. It measures the total energy demand of a country covering the consumption of the energy sector itself, losses during transformation (for example, from oil or gas into electricity) and distribution of energy, and the final consumption by end users (definition by Eurostat). 7. The main parts of the legislative framework which relates to energy efficiency in the EU are: the Energy Efficiency Directive, the Energy Performance of Buildings Directive, the Eco-design Directive, the Energy Labelling Regulation, the Directives establishing an Emissions Trading Scheme in the European Union, the Effort Sharing Regulation, the Renewable Energy Directive, the Industrial Emissions Directive and the Regulation regarding CO2 emissions of new passenger cars. Some other measures also support improvements in energy efficiency in the EU transport sector: Clean Vehicle Directive, Directive on alternative fuels infrastructure, 4th Railway Package, Combined Transport Directive, etc. (Tsemekidi Tzeiranaki et al. 2018). 8. According to the Eurostat definition, primary production of energy is any extraction of energy products in a useable form from natural sources. This occurs either when natural sources are exploited (for example, in coal mines, crude oil fields, hydro power plants) or in the fabrication of biofuels. Transforming energy from one form into another, such as electricity or heat generation in thermal power plants (where primary energy sources are burned), or coke production in coke ovens, is not primary production.

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Agora Energiewende. (2020). The European Power Sector in 2019: Up-to-Date Analysis on the Electricity Transition. Berlin: Agora Energiewende. Åslund, A. (2013). How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia, the Caucasus, and Central Asia. Cambridge: Cambridge University Press. Åslund, A., & Djankov, S. (Eds.). (2014). The Great Rebirth: Lessons from the Victory of Capitalism Over Communism. Washington, DC: Peterson Institute for International Economics. Atalla, T., & Bean, P. (2017). Determinants of Energy Productivity in 39 Countries: An Empirical Investigation. Energy Economics, 62, 217–229. Backé, P., Korhonen, I., Ritzberger-Grünwald, D., & Solanko, L. (2019). A Tribute to 30 Years of Transition in CESEE. In ONB, 30 Years of Transition, Focus on European Economic Integration Q3/19 (pp. 11–29). Vienna: Oesterreichische Nationalbank. Balázs, P., Bozóki, A., Catrina, S¸ ., Gotseva, A., Horvath, J., Limani, D., et al. (2014). 25 Years After the Fall of the Iron Curtain: The State of Integration of East and West in the European Union. Luxembourg: Publications Office of the European Union. Bokros, L. (2013). Accidental Occidental: Economics and Culture of Transition in Mitteleuropa, the Baltic and the Balkan Area. Budapest: Central European University Press. CAN Europe. (2020). Funding Climate and Energy Transition in the EU: The Untapped Potential of Regional Funds: Assessment of the European Regional Development and Cohesion Funds’ Investments in Energy Infrastructure 2014– 2020. Brussels: Climate Action Network Europe. CISL. (2019). The Energy Transition in Central and Eastern Europe: The Business Case for Higher Ambition. Cambridge: The Prince of Wales’s Corporate Leaders Group. DeLong, J. P., & Burger, O. (2015). Socio-Economic Instability and the Scaling of Energy Use with Population Size. PLoS ONE, 10 (6), 0130547. Dietz, T., & Rosa, E. A. (1994). Rethinking the Environmental Impacts of Population, Affluence and Technology. Human Ecology Review, 1, 277–300. EBRD. (2020). Transition Indicators (1989–2014). London: European Bank for Reconstruction and Development. https://www.ebrd.com/economic-res earch-and-data/transition-qualities-asses.html. Accessed 11 May 2020. EEA. (2019). Energy Intensity in Europe. https://www.eea.europa.eu/data-andmaps/indicators/total-primary-energy-intensity-4/assessment-1. Accessed 14 May 2020.

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Ehrlich, P., & Holdren, J. (1971). Impact of Population Growth. Science, 171, 1212–1217. European Commission. (2019). EU Energy in Figures: Statistical Pocketbook 2019. Luxembourg: Publications Office of the European Union. European Commission. (2018). Report from the Commission to the European Parliament and the Council on the Evaluation and Implementation of the EU Nuclear Decommissioning Assistance Programmes in Bulgaria, Slovakia and Lithuania. https://eur-lex.europa.eu/legal-content/EN/TXT/? qid=1528899280231&uri=COM:2018:468:FIN. Accessed 14 May 2020. Eurostat. (2020). Database (Complete Energy Balances; Population; Population Projections). https://ec.europa.eu/eurostat/data/database. Accessed 3 May 2020. Eurostat. (2019). Energy Production and Imports. Statistics Explained. https:// ec.europa.eu/eurostat/statistics-explained/index.php?title=Energy_produc tion_and_imports&oldid=205127#Production_of_primary_energy_decrea sed_between_2007_and_2017. Accessed 15 May 2020. Falcetti, E., Lysenko, T., & Sanfey, P. (2006). Reforms and Growth in Transition: Re-examining the Evidence. Journal of Comparative Economics, 34 (3), 421–445. Havrylyshyn, O., Xiaofan Meng, X., & Tupy, M. L. (2016). 25 Years of Reforms in Ex-Communist Countries: Fast and Extensive Reforms Led to Higher Growth and More Political Freedom (Policy Analysis No. 795). Washington DC: Cato Institute. https://www.cato.org/publications/policy-analysis/25years-reforms-ex-communist-countries-fast-extensive-reforms-led. Accessed 10 May 2020. Heilmann, F., Popp, R., & Ámon, A. (2020). The Political Economy of Energy in Central and Eastern Europe: Supporting the Net Zero Transition. https://www.e3g.org/library/political-economy-energy-central-easterneurope-net-zero-transition. Accessed 7 April 2020. Holdren, J. P., & Ehrlich, P. R. (1974). Human Population and the Global Environment. American Scientist, 62(3), 282–292. IMF DataMapper. (2020). Real GDP Growth. Washington DC: International Monetary Fund. https://www.imf.org/external/datamapper/NGDP_RPCH @WEO/OEMDC/ADVEC/WEOWORLD. Accessed 10 May 2020. IMF. (1998). World Economic Outlook: Financial Crises: Causes and Indicators. May 1998. Washington, DC: International Monetary Fund. https://www. imf.org/en/Publications/WEO/Issues/2016/12/31/Financial-Crises-Causesand-Indicators. Accessed 10 May 2020.

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IRENA. (2020). Renewable Power Generation Costs in 2019. Abu Dhabi: International Renewable Energy Agency. Iwata, H., & Okada, K. (2014). Greenhouse Gas Emissions and the Role of the Kyoto Protocol. Environmental Economics and Policy Studies, 16 (4), 325– 342. Jorgenson, A. K., Fiske, S., Hubacek, K., Li, J., McGovern, T., Rick, T., et al. (2018). Social Science Perspectives on Drivers of and Responses to Global climate Change. Wiley Interdisciplinary Reviews: Climate Change, 10 (1), e554. Li, R., Hong, J., Sotnyk, I., Kubatko, O., & Ismail, A. (2020). The CO 2 Emissions Drivers of Post-communist Economies in Eastern Europe and Central Asia. https://www.researchsquare.com/article/rs-21193/v1. Accessed 10 May 2020. Liddle, B. (2014). Impact of Population, Age Structure, and Urbanization on Carbon Emissions/Energy Consumption: Evidence from Macro-Level, Cross-Country Analyses. Population and Environment, 35, 286–304. Marinas, , M.-C., Dinu, M., Socol, A.-G., & Socol, C. (2018). Renewable Energy Consumption and Economic Growth. Causality relationship in Central and Eastern European countries. PLoS ONE, 13(10), e0202951. Mikloš, I. (2019, July 1). Mýty a fakty: Kruté a necitlivé reformy (píše Ivan Mikloš). Sme. https://komentare.sme.sk/c/22157944/myty-a-faktydiel-prvy-krute-a-necitlive-reformy-pise-ivan-miklos.html. Accessed 2 July 2019. Mišík, M. (2010). Security first: Energy Policy in the New Member States of the European Union. In D. Malová (Ed.), From Listening to Action? New Member States in the European Union (pp. 101–129). Bratislava: Devin. Mišík, M. (2019). External Energy Security in the EU: Small EU Member States’ Perspective. London: Routledge. Morales-Lage, R., Bengochea-Morancho, A., & Martínez-Zarzoso, I. (2016). The Determinants of CO 2 Emissions: Evidence from European Countries (Working Papers 2016/04). Castellón: Universitat Jaume I. ÖAW. (2018). Population Trends: Eastern Europe Is Drifting Away from the West. Vienna: Vienna Institute for Demography of the Austrian Academy of Sciences. https://www.oeaw.ac.at/en/detail/news/population-trends-easterneurope-is-drifting-away-from-the-west/. Accessed 10 March 2020. Oravcová, V., & Mišík, M. (2018). EU Funds and Limited Cooperation: Energy Infrastructure Development in the Visegrad Group. International Issues and Slovak Foreign Policy Affairs, 27 (3–4), 11–26.

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Petrovi´c, P., Nikoli´c, G., & Ostoji´c, I. (2017). Demografske determinante energetske potrošnje u Evropskoj uniji: rezultati ekonometrijske analize. Stanovništvo, 55 (1), 1–20. Roaf, J., Atoyan, R., Joshi, B., Krogulski, K., & IMF staff team (2014). 25 Years of Transition: Post-Communist Europe and the IMF (Regional Economic Issues Special Report). Washington, DC: International Monetary Fund. Rosa, E., Rudel, T., York, R., Jorgenson, A., & Dietz, T. (2015). The Human (Anthropogenic) Driving Forces of Global Climate Change. In R. Dunlap & R. Brulle (Eds.), Climate Change and Society: Sociological Perspectives (pp. 32–61). New York: Oxford University Press. Salim, R. A., & Shafiei, S. (2014). Urbanization and Renewable and Nonrenewable Energy Consumption in OECD Countries: An Empirical Analysis. Economic Modelling, 38(C), 581–591. Sineviciene, L., Sotnyk, I., & Kubatko, O. (2017). Determinants of Energy Efficiency and Energy Consumption of Eastern Europe Post-communist Economies. Energy and Environment, 28(8), 870–884. Treisman, D. (2014). The Political Economy of Change After Communism. In A. Åslund & S. Djankov (Eds.), The Great Rebirth: Lessons from the Victory of Capitalism Over Communism (pp. 273–297). Washington, DC: Peterson Institute for International Economics. Tsemekidi Tzeiranaki, S., Bertoldi, P., Labanca, N., Castellazzi, L., Ribeiro Serrenho, T., Economidou, M., et al. (2018). Energy Consumption and Energy Efficiency Trends in the EU-28 for the Period 2000–2016 . Luxembourg: Publications Office of the European Union. Tsemekidi Tzeiranaki, S., Bertoldi, P., Diluiso, F., Castellazzi, L., Economidou, M., Labanca, N., et al. (2019). Analysis of the EU Residential Energy Consumption: Trends and Determinants. Energies, 12, 1065. Ürge-Vorsatz, D., Miladinova, G., & Paizs, L. (2006). Energy in Transition: From the Iron Curtain to the European Union. Energy Policy, 34 (15), 2279– 2297. World Bank. (2019). Europe and Central Asia Economic Update. Fall 2019: Migration and Brain Drain. Washington, DC: World Bank. Wyplosz, C. (2014). Twenty-Five Years Later: Macroeconomic Aspects of Transition. In A. Åslund & S. Djankov (Eds.), The Great Rebirth: Lessons from the Victory of Capitalism Over Communism (pp. 205–233). Washington, DC: Peterson Institute for International Economics. Yeboah, A. S., Ohene, M., & Wereko, T. (2013). Determinants of Energy Consumption: A Review. International Journal of Management Sciences, 1(12), 482–487.

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York, R. (2018). Energy Consumption Trends Across the Globe. In D. J. Davidson & M. Gross (Eds.), The Oxford Handbook of Energy and Society (pp. 165–179). New York: Oxford University Press. York, R. (2008). De-carbonization in Former Soviet Republics, 1992–2000: The Ecological Consequences of De-modernization. Social Problems, 55 (3), 370–390. York, R. (2007). Demographic Trends and Energy Consumption in European Union Nations, 1960–2025. Social Science Research, 36 (3), 855–872. Zaharia, A., Diaconeasa, M., Brad, L., L˘adaru, G. R., & Ioan˘as, , C. (2019). Factors Influencing Energy Consumption in the Context of Sustainable Development. Sustainability, 11, 4147.

3 The CEE Energy Transition: Recurring Fifty-Year-Old Dynamics? John Szabo and Andras Deak

1

Introduction

A growing need for the global community to take action against climate change has prompted governments to pledge climate action and initiate the decarbonization of their energy sectors. Countries face varying hurdles in this undertaking, predicated on their existing J. Szabo (B) Department of Environmental Sciences and Policy, Central European University, Budapest, Hungary e-mail: [email protected] J. Szabo · A. Deak Institute of World Economics, Centre for Economic and Regional Studies, Budapest, Hungary e-mail: [email protected] A. Deak Institute of Strategic and Security Studies, National University of Public Service, Budapest, Hungary © The Author(s) 2021 M. Mišík and V. Oravcová (eds.), From Economic to Energy Transition, Energy, Climate and the Environment, https://doi.org/10.1007/978-3-030-55085-1_3

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energy systems. Uniquely, Central and Eastern Europe (CEE) is wedged between Western Europe and what is now Russia, formerly the Soviet Union, two blocs which have had a profound impact on the energy systems of these countries. The region has a long-standing energy system reliant on the importation of Russian (formerly Soviet) hydrocarbons. In 2004, 2007 and 2013 eleven CEE countries1 joined the European Union (EU); these CEE countries2 acquiesced to certain shared EU principles and commitments that would force change. Western European governments (EU15) and EU institutions are now pushing these CEE countries to decarbonize, severing their energy systems’ legacies. An energy transition driven by external forces has already happened in these states: the Soviet Union pressured them to alter their existing energy systems between the mid-1960s and the late-1980s. Soviet government officials pushed the governments of satellite states to substitute their growing reliance on Soviet oil with a combination of electricity, natural gas imports and nuclear technology. CEE EU countries raised concerns and were occasionally able to churn out concessions, but their leeway remained limited. The energy transition was an externally imposed, politically mediated and bureaucratically implemented. Economics only played a secondary role. This chapter explores the dynamics of these two energy transitions. The two energy transitions in the CEE regions share some common, systemic characteristics. In particular, both were inspired and driven by external actors: the Soviet Union between the 1960s and 1980s and EU actors in the 2010s. In both cases, market signals had only a limited role at the beginning, and the transition process was negotiated through political-administrative channels. Given the urgent need to decarbonize, these cases can offer novel insights into the politics of domination in energy transitions. Our comparison does not imply that EU and Soviet hegemony are identical, but it provides a comparison of two noteworthy cases that reflect the political action and asymmetric power relations that (can) stimulate an energy transition. The EU is not a command economy, where plans determine input–output relations even at the micro level, as in the Soviet Union. Meanwhile, veto rights in the Council of Mutual Economic Assistance (Comecon) were not identical with the veto in the European Council. However, these cases show

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that relations of domination do not exclude negotiations and consultations. CEE states preserved a large part of their sovereignty in both systems, and they were formally independent to design and implement their energy policy. At the same time, a good deal of policy conditions and the broader socio-political environment were set by external actors, which CEE countries could only shape through a bargaining process that reflected asymmetric power relations. In the second part of this chapter, we relied on research in the National Archives of Hungary to trace the politics preceding Hungary’s energy transition in the Soviet era. These sources show that the Soviet attitude was similar to all CEE Comecon members: Moscow managed the region’s energy situation as a single entity and made little differentiation between these countries. Segmentation came primarily from different reactions to the emerging challenges. Some countries, like Czechoslovakia or Poland could turn to domestic resources (coal) instead of Soviet imports. Others had more developed manufacturing capabilities, opening up perspectives for bartered oil from the Middle East (e.g. German Democratic Republic; GDR). Nonetheless, these deviations do not fundamentally impede the main argument of this paper: an energy transition through oil substitution was driven externally in the CEE Comecon, initially by administrative means of the Soviet Union. Our extrapolations of the region as a whole are based on these findings, as well as secondary sources and historical data pertaining to the region’s energy sector. The third part of the chapter focuses on the relations between the EU and CEE countries that have joined the EU. We trace their approach to the EUled energy transition to renewables (RES) by assessing changes in their energy mixes, discussions in the European Council, their climate and energy policy commitments and general discourses on the matter.

2

External Forces in Energy Transitions

Energy transitions are extremely complex dynamics, given the intricate linkages between social organization and energy consumption. Most of the recent energy transition scholarship has focused on the dynamics of changes in source-fuels (for example, Cherp et al. 2017), renewable

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penetration rates (e.g. Geels et al. 2017) and the disruption of incumbent sectors (Davidson 2019; Turnheim and Geels 2012). In developing their theoretical framework, Cherp et al. (2018) provide a rigorous survey of the literature on energy transitions, clustering key drivers and approaches. Their attention is geared towards changes in the environment and domestic policy action within countries, but only briefly notes the role that external entities play in energy transitions. Control over resources is a focal tool in the ability of an entity to shape the actions of others (Guler et al. 2002). Various strands of international relations theory has long understood control over resources by entities (e.g. nation states, cartels, corporations, etc.) as essential in the broader geopolitical landscape by underpinning the given entity’s ability to wield power. Energy carriers have been at the heart of these assessments, which have also led to the development of asymmetric power relations between states. This is an especially pertinent matter in the case of relatively small import-dependent countries (Zimmerman 1978). The power relations between the dominant and subjugated powers in this formation of dependence are mediated through energy, amongst other factors, because the former also has the ability to shape the composition of the latter’s energy mix. Various entities have pressured others to change their energy consumption habits, subjugating them to energy transitions. The oil crises of the 1970s and the formation of the Organization of the Petroleum Exporting Countries (OPEC) stand out as a prime example of this, but we can also take the Russia–Ukraine dispute as another instance of state intervention shaping the energy consumption patterns of other countries (Balmaceda 2013; Yergin 2011). These cases form extremes, as shifts are spurred by crises and are frequently intertwined with military conflict. Moreover, they have been coupled with massive changes in the broader environment, as they brought tectonic shifts in the regional or global energy scene. However, energy transitions can also be induced during peacetime, driven by a dominant state or entity that transposes its will onto others. Its driver is thus not a domestic economics-driven diffusion of a fuel, but rather, the hegemon has control over key resources or decision-making power, which allow it to impose change on other subjugated entities. External imposition of action is predicated on the policy

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diffusion based on institutional isomorphism from coercion, mimetic processes and normative pressures (DiMaggio and Powell 1983). This can induce a policy convergence where resources constitute an incentive or a penalty, given the asymmetry of power between the actors involved. Holzinger and Knill (2005, p. 781) suggest that ‘[t]here are two typical cases: the unilateral imposition of a policy on a country by another country, and the conditionality by an international institution’. The asymmetric power relations between entities involved in policy convergence lead the dominant entity to play a greater role in shaping objectives and tools of implementation. Specific configurations of policy convergence are shaped by a combination of the strategic objectives and path dependences of those involved. Actors will seek to avoid or minimize change to avoid the incurred costs of alternatives development trajectories (Mahoney 2000; Pierson 2000). In the case of energy systems, entities seek to avoid the disruption of systemic lock-ins of energy production and consumption practices (Seto et al. 2016; Unruh 2000). In the case of carbon lock-ins, the fossil fuel energy systems are disrupted low carbon technologies, which, however, is also intimately linked to the given entities’ relation to environmental movements. The populaces of EU15 and CEE EU countries have had different relations to environmental action, conditioning their approaches to climate action and thereby RES energy policy. Western Europe, led by inter alia the European Commission (EC), has been a long-standing proponent of environmental protection (Andersson et al. 1992; Jordan 2012). Thus, EU15 countries were already more receptive to the Commission’s lead and were willing to take on a greater burden to enact environmental protection, given their long-standing polluting practices. We see climate action as an extension of this. CEE EU countries under the aegis of the Soviet Union’s ideological leadership adopted wasteful production practices, but rarely addressed environmental problems, as states hesitated to waste resources on objectives that did not yield economic growth (Baker and Jehliˇcka 1998). In addition, citizens had less freedom to rebel under the suppression of the Soviet regime (Jancar-Webster 1993). These differences in their relations to environmental action have continued through the low political salience of climate change issues in the Eastern Bloc (McCright et al. 2016).

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In the case of energy transitions, entities involved adopt and implement measures via bureaucratic means in the initial phase of an energy transition’s implementation. Measures are imposed by the more powerful actor, forcing the subjugated to take action disruptive to its lock-ins. Initially, costs do not necessarily constitute an issue in the transition, since the objective of change inherently increases costs, leading to governments or supranational institutions, for example, to subsidize newly incurred costs, avoiding the conferment of costs onto consumers. Thus, the hegemon’s strategic objectives are transposed into the framework within which the subjugated entity can operate. This can manifest in providing certain goals, but providing technology, capital or alternative resource (e.g. providing other source fuels) transfers. How specifically policy convergence is taking place is a growing strand of energy studies (Strunz et al. 2018), but this tends to focus on the proliferation and adoption of various RES support schemes. In contrast to this strand of inquiry, we are curious about the greater dynamics at play in a setting of dependence. Namely, how a political power struggle leads to the initial bureaucratic implementation of energy transitions, which is to be followed by a phase that allows for a greater role for economics-based decision-making. The political power struggle and policy design based on bureaucratic management is only gradually substituted or paired with a rising role allocated for the market. The policies implemented lead to the engineering of a market, which, initially is heavily reliant on various subsidies and direct intervention. The aforementioned policy convergence literature on renewable support schemes supports this, as EU states had to establish these markets first and support them in various forms (e.g. feedin tariffs, quotas, etc.). This has also been applicable to the adoption of other new source fuels, such as nuclear or during the development of infrastructure supporting the adoption of natural gas (Hecht 2009; Högselius 2013). As these markets mature, the state can gradually reduce intervention and rely on market forces to shape its development trajectory. This grants the weaker entity greater leeway, since after the initial decision to disrupt its lock-in, it can evaluate prices and take decisions informed by such considerations. However, even as the role of economic consideration grows, which is coupled with the newly introduced source

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fuels becoming more competitive, entities subjugated to change still tend to lag in adopting new practices. Their lock-ins remain persistent and only gradually lead to an energy transition.

2.1

A Soviet-Led Energy Transition

2.1.1 An Eastern Bloc Built on Soviet Energy Market drivers affect national economies through global or regional political and policy patterns, which, for the CEE, was the hegemony of the Soviet Union between 1945 and 1989. The Soviet Union devised the broad political-ideological framework, within which political leaders of CEE countries had to consult nearly all aspects of economic policy, and especially those related to foreign trade, within the Comecon and bilaterally with government and party officials in Moscow. Unsurprisingly, their trade balances were dominated with trade between other members of the Eastern Bloc (see Table 1). This protocol was applicable to energy as well, where the Soviet Union was the hegemon that dominated decision-making. It also took on the role of the dominant exporter of energy resources and pertaining technologies to other states in the Eastern Bloc. Energy policy was deeply integrated into Soviet–CEE bilateral relations and the respective structures of the plan economies’ chains of command. Satellite states did not, and potentially could not, think Table 1 Foreign trade of energy in the Comecon region in 1970 (million metric tonnes of coal) Domestic Imports from production Communist countries Bulgaria 20.54 31.01 Czechoslovakia 123.22 44.06 East Germany 159.39 49.64 (GDR) Hungary 37.67 23.92 Poland 257.72 31.55 Romania 119.54 5.85 Total 718.08 186.06

Source Hoffman (1983)

Imports from the West

Exports

Total Consumption

2.58 1.09 2.99

0.95 13.74 9.25

53.18 154.50 202.78

1.09 0.0 6.26 13.87

3.94 64.46 16.86 109.48

58.62 224.81 114.78 808.66

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beyond the framework set by the Soviet government. This dependence set the boundaries through which their governments could think about the country’s energy security—a variable predicated on their respective endowments, the pre-existing characteristics of their energy system and industrial policies they enacted. Energy security axioms clustered around availability, accessibility, affordability and acceptability showed slight variation from country to country (APERC 2007), but generally reflected a relation of dependence. CEE government decisions regarding availability and accessibility were primarily reduced to a choice between domestic reserves and Soviet supplies. Poland or Romania, for instance, could rely on their abundant deposits of various fossil fuels, but others, such as Bulgaria or Hungary faced greater resource scarcity. Despite their demand for fossil fuels, non-Soviet sources of supply were only available in theory for most Warsaw Pact signatories, especially with respect to oil imports since these countries faced both political and economic impediments to purchasing volumes from so-called capitalist countries. This is not to say that these countries did not attempt to circumvent the Soviet Union and establish alternative relations to enable fossil fuel imports, by bartering, for example. However, the Soviet share in oil imports remained typically above 95% in most CEE countries, with East Germany (GDR) constituting the most notable exception3 (Hoffman 1983, p. 662). And ultimately, they nearly always opted for intensified cooperation with the Soviet Union rather than establishing alternatives. CEE countries primarily understood affordability as minimizing hardcurrency (i.e. currencies of the capitalist countries) expenses on energy. They prioritized intra-bloc barter-based trade, as hard-currency scarcity had been the bottleneck of local command economies and saving it constituted the top priority of their energy and economic policy objectives (Hoffman and Dienes 1985). While growing inflow of Western credit hid some of these structural problems until the end of the 1970s, the hard-currency deficit became prohibitive by the 1980s. At this point in time, Poland had to allocate more than 90% of its hardcurrency earnings to service its debt (Hoffman 1983), while Hungary had continuously been on the verge of bankruptcy after the mid-1970s. These governments had to consider their lack of hard-currency at every

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stage of the value chain: imports, logistics and technology. This pushed them towards softly priced—i.e. both favourable and flexible—roubledenominated Soviet imports and technology options. As early as the mid-1960s, this became the prime argument CEE policymakers put forward for their countries to strengthen energy-based ties with the Soviets, maintaining affordable energy supply both for households and industry. In some cases, constraints in access to Western technology could even force CEE governments to opt for Soviet energy imports as opposed to domestic production, which occurred during attempts to modernize local coal production. Acceptability considerations of energy security in CEE countries also favoured close ties with the Soviet Union, given their ideological alignment within the Eastern Bloc. Political preferences favoured close cooperation between states within the bloc, which energy ties brought even closer in the 1960s and the 1970s. Satellite states were aware of the Soviet political commitments to their stability and development, to maintain unity within the bloc. A case in point was the five billion US dollars Poland received annually from the Soviet Union in the 1980s to stabilize its debt-ridden economy (Byrnes 1983). Soviet commitments also constituted a fundamental guarantee that it would provide the basic energy needs at the sectoral level. Political leaders in Moscow could not afford social upheavals in the region, and energy was one of those few commodities of which it could supply large quantities to stymie unrest. While they made basic support available, policymakers in satellite states faced the challenge of balancing a bargain for greater quantities of resources vital for their countries and Soviet proposals for closer cooperation. The latter stemmed from decision-makers in Moscow seeking to share the added costs of incremental energy supplies with CEE states. Despite this manoeuvring, there was no doubt that Soviet energy would remain the most acceptable option. Comecon countries set their energy policy objectives—including trade volumes and prices, investments, and primary energy balances—in fiveyear plans. Responsible Comecon committees aggregated and assessed national energy needs for the upcoming planning period and even beyond, which were synchronized with Soviet and other Comecon plans. Based on these signals, the Soviet State Planning Committee (Gosplan)

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could offer regional development projects for intra-bloc development. Despite steps to streamline planning, trade volumes and prices were bargained bilaterally between CEE governments and representatives of the Soviet Union. Governments formulated national positions based on their strategies, inputs of local Planning Offices, and under the supervision of the Communist Party Central Committee’s organs. Final negotiation rounds were typically held at the top Party level, just before the respective five-year terms began. Trade volumes and prices were both set for the full five-year terms until the mid-1970s. Only after this, did political leaders introduce a more flexible system with respect to trade terms and carrying the option of annually renegotiating prices. Barter and clearing continued to dominate trade.

2.1.2 Contextual Factors Leading to an Energy Transition Energy security in CEE countries was fully constrained to their energy relations with the Soviet Union. All major factors related to imports, including the availability of source-fuels, price and technological solutions had to be negotiated with political representatives in Moscow, setting the framework for their energy policies and energy imports. Policymakers in CEE capitals had to tread these forms of uncertainty, as opposed to factors shaping global markets. The signals that impacted their local sectoral policies came from the Soviet energy sector: volumetric constraints on imports, worsening terms of trade, political messages, etc. Soviet bureaucratic planning drove resource allocation, so only gradually did market signals begin to play a secondary role beginning in the mid-1970s. Reverberations stemming from such a setup offered CEE sectoral decision-making limited sovereignty, which was governed by a strong bureaucratic hierarchy. There was a pervasive lack of information among local policymakers regarding Soviet objectives, trends and circumstances. Our archival research has shown that they had no, or a very limited, understanding of production and transportation costs, the current and future Soviet energy export potential, and government officials in Moscow even concealed some available technologies.

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Information only diffused from the Soviet Union at a sluggish pace, driving the oil-based energy policies of CEE countries. For example, Hungary contracted two nuclear reactors from the Soviet Union in 1966, but ministries in Budapest did not receive cost estimates until 1969.4 CEE countries also ended up with significant cost overruns after partnering with the Soviets to develop natural gas projects after 1979. To mitigate risks, CEE countries sought to maintain their coal and oildominated fuel mixes in the 1960–70s. Coal and lignite was typically at the heart of their energy strategies since it was frequently accessible domestically. When they reached the upper boundaries of production they generally planned to cover incremental energy demand almost exclusively via oil, perhaps through some natural gas imports. The Soviet oil nexus was an established one with reliable channels of interaction and relatively few technological novelties. This remained intact until the mid-1960s. The Druzhba oil pipeline project and the related allocation arrangements were the cornerstones of stability. Participants of the 10th session of the Comecon in Prague in 1958 took the decision to construct the pipeline. All the four countries in the region (Czechoslovakia, GDR, Hungary and Poland) received oil deliveries through the pipeline by 1964, for which they paid with barter arrangements. The oil deliveries were particularly favourable for the CEE Comecon countries, but the Soviet Union could contribute to local economic development and secure military fuel supplies at its European borderlands as well. A widening mismatch in oil supply and demand developed in the Eastern Bloc during the 1960s and 1970s. On the supply-side, oil was the Soviet Union’s prime export commodity, leading it to constrain what it could and wanted to export to the Eastern Bloc. Decisionmakers in Moscow offered a variety of alternatives to CEE governments instead of oil, to maintain their access to hard-currency flows from Western buyers. Simultaneously, the Soviets faced the prospects of insufficient domestic oil production in the Volga-basin beginning in the mid-1960s (Slavkina 2015). Keeping production in line with demand growth required immense investments and Western technology imports in what led to the opening up of the enormous Western Siberian oil and gas developments after 1965 (Högselius 2013). Oil and natural gas fixed investment increased from 11.5% in 1971–1975 to 16.8% in

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1981–1985 (Gustafson 2014). However, the Soviet government’s inadequate domestic industrial support only drove moderate Comecon oil and natural gas import growth, despite half of energy exports targeting these countries—45.4% in 1970 and 52.8% in 1980 (Gustafson 2014). The Soviet oil sector was therefore on shaky footing and to some extent reliant on Western capital and technology flows, curtailing volumes the government could offer satellite states. The wish of the CEE governments to maintain cheap oil as the priority import fuel from the Soviet Union collided with Moscow’s efforts to free as much of its the ‘black gold’ for hard currency Western exports as possible. This drove Soviet energy planners to launch an extensive energy transition within the country and substitute oil products with coal, natural gas and nuclear fuels. While at the beginning these latter fuels were only alternatives for oil to cover booming energy demand, gas-for-oil substitution became an official policy in 1976, even if only implemented after 1983 (Gustafson 2014). Understandably, Moscow had enough leverage to enforce similar efforts within the Comecon countries. As Gustafson notes: ‘[i]n effect, Eastern Europe is part of the Soviet domestic fuel-switching strategy’ (2014, p. 274). The Soviet fuel-switching campaign was, however, a volatile undertaking undermining the initiative’s credibility in CEE capitals. Soviet warnings were often dismissed or ignored, in a number of cases rightfully. Political considerations and sensitivities also played an important role, as the pacification of the satellite societies always remained an ultimate task. Lastly, Moscow alternated its tools of implementation from volumetric limitations, price increases, burden sharing on investments or even administrative measures—adding an additional layer of instability.

2.1.3 A Soviet-Led Energy Transition in Hungary By the early 1960s it became clear that domestic supplies of lignite and coal were insufficient to cover rising energy demand in Hungary, pushing its government to seek alternative sources of energy. The Hungarian Politburo first brought up the issue of future energy supplies in September 1964, launching a policy debate in preparation for the

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Hungarian Third Five-Year Plan (overlapping with the Eighth Five Year Plan in the Soviet Union). By 1968–1969 the necessity of incremental hydrocarbon supplies and related import growth became evident for all stakeholders.5 The Hungarian Gosplan began to integrate changes into its expectations in the investments plans during the 1970s. Initially, Hungary wanted to increase its oil imports from the Soviet Union. The Ministry of Heavy Industry estimated annual crude oil demand to reach 7–8 million tonnes by 1985 (this does not include Soviet oil product imports, providing a significant share of total oil imports), requiring the construction of a new 6 million tonnes per year refinery to meet demand for petroleum products.6 The Ministry heavily based these plans on the availability of an increasing amount of cheap oil. The Soviet Union, however, pushed Hungary (and other Comecon countries) away from oil consumption towards other energy sources, by imposing export caps, offering substitute source-fuels, before raising prices. From the mid-1960s Soviet policymakers indicated that they might not be able to accept and meet Comecon requests for additional supplies. These warnings carried little credibility in CEE capitals initially, as the Soviet Union raised Hungary’s (together with other Comecon countries’) ceiling for inexpensive crude oil and oil product imports for the upcoming planning period from 4 million tonnes in 1970 to 6.5 million tonnes in 1975 (Bosák 2017). The situation only changed only in March 1972 when policymakers in Moscow set 9.5 million tonne per year limit for Hungarian imports during the 1976–80 planning period against the 10–11 million requested. This ceiling was decreased to 8.5 million tonnes and the Soviet side demanded that Hungary reciprocate—CEE countries were primarily urged to invest in Soviet (energy) infrastructure. These measures arrested most oil demand growth in satellite states. Exports became a growing problem for the Soviet Union, since the gap between Hungarian-Soviet and global prices increased tremendously following the 1974 oil crisis (see Table 2). Decision-makers in Moscow had to tighten existing caps and start to raise Comecon export prices by introducing the Bucharest price formula in 1975. Henceforth, oil prices would not be set in advance, but would be devised as a five-year moving average of global prices. Accordingly, bilateral prices started to increase

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Table 2 Hungarian average oil import prices from the Soviet Union, alongside global oil prices between 1970–1979 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979

HU–SU bilateral (rubles)

Brent dated price (USD)

15.18 15.89 15.89 15.89 15.89 37 39.95 49.2 59.7 67.9

1.8 2.24 2.48 3.29 11.58 11.53 12.8 13.92 14.2 31.61

Source Government of Hungary (1979) and BP (2017)

even for imports within the quotas of CEE countries, swiftly changing their attitude towards oil and its alternatives. Comecon oil demand growth decelerated by the late-1970s. The peak oil price subsidy from the Soviet Union to Comecon countries is estimated to have reached approximately 10 billion USD in 1980 (Gustafson 2014). The unsustainability of these levels was revealed in 1982, when the Soviet Union cut the Comecon oil export quota by 14%, reflecting Soviet sectoral hardships. Nevertheless, by the mid-1970s oil had lost its role as the fuel of choice within Hungarian energy policy and debates shifted to the relative role its alternatives could play in the domestic energy system. The Soviet Union offered a number of alternatives to oil; it pushed for increased natural gas and electricity exports as well as nuclear investments. CEE countries welcomed Soviet offers for new sources of energy with moderate enthusiasm. Archives indicate that they generally pursued a two-pronged strategy: national governments bargained for higher oil flows, while beginning to incorporate alternative sources of energy into their planning. The first step disrupting the coal and oil pillars in the Eastern Bloc were electricity imports from the Soviet Union. Interconnections (220 kV line) with the Soviet network were established in 1962, by the time the Unified Electricity System of the Comecon was launched. Engineers further expanded Hungary’s electricity infrastructure, enabling imports to grow dynamically from 4.55 TWh in 1978 to 9.08 TWh

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by 1983 (MAVIR 2009). Total gross electricity imports reached 13.3 TWh (roughly one-third of total gross demand) in 1990 (Hungarian Central Statistical Office 2020). The import of electricity offered the least expensive form of access to incremental flows of energy, but the construction of the transmission system in Hungary and the Soviet Union was nonetheless relatively slow and capital-intensive. Natural gas imports were not among the primary interests of Hungarian-Soviet energy relations until the early 1970s, but subsequently the fuel began to play a rapidly expanding role in Hungary’s energy mix. Hungary had a relatively well-developed gas network, supplied by domestic production. High levels and a relatively long history of domestic production and consumption paved the way for Soviet imports. At the 27th Session of the Comecon Council in Prague in June 1973, the respective countries decided to synchronize their import policies and direct substantial investment towards the Soviet Union in exchange for future natural gas supplies. The first interconnection with the Soviet natural gas network was constructed in 1975 and deliveries started under soft pricing terms based on barter payments. Hungary and five other CEE/South East European (SEE) countries participated in the construction of the Brotherhood gas pipeline and the development of the Orenburg gas field. During the twelve years beginning with 1979, they received a combined 15 billion cubic metre (bcm) per annum, of which Hungary received 2.8 bcm (Nagylaki 2008). Subsequently, the Soviet Union provided further volumes under similar gas-for-pipe conditions during the Yamburg-project as well. The biggest debate in Hungary developed around nuclear energy. The Soviet government circulated their offer of a new water-water energetic reactor (VVER) technology among Comecon countries in 1965 (Bosák 2017). Following the GDR and Czechoslovakia, Hungary also replied positively and subsequently contracted 800 MW nuclear capacity with a delivery date of 1975, financed from a Soviet credit-line provided in December 1966. However, the adoption of nuclear power faced opposition within the party and the government. The Hungarian Gosplan was one of the main sources of criticism on cost-related grounds—their calculations showed that oil-based generation was cheaper.7 Both the Gosplan and the National Technological Development Committee was

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highly concerned about the financial implications of the investment, its costs and the complexity of the project. Concerns were underlined by the lack of Soviet construction price estimates.8 Supporters of nuclear power argued that investment costs would be less than expected due to technological development. Some supporters also emphasized that since the GDR and Czechoslovakia accepted the Soviet offer soon after 1965, Hungary should not miss the opportunity to construct its nuclear generation capacities.9 Quick adoption of nuclear power further deteriorated when Hungary discovered relatively large domestic oil and gas deposits. This reversed declining hydrocarbon production. Hungary’s Gosplan also pointed out in early 1969 that the country’s electricity demand and supply would remain in balance for the foreseeable future without the nuclear blocs, by merely adding some electricity imports from the Soviet Union.10 The nuclear mood was further cooled by Hungary’s access to greater volumes of Soviet oil in the same years. The government postponed the nuclear power plant’s construction beyond 1980 and modified the respective arrangements with the Soviet Union in 1970. It also initiated negotiations with the Soviets to raise oil imports to 10–11 million tonnes per annum and natural gas to 3 bcm per annum (Bosák 2017). As demonstrated above, these plans proved to be unrealistic. The situation changed dramatically in 1972, when the Soviet Union tightened its oil export policy. By this time the Gosplan’s expectations regarding domestic oil and gas production prospects also turned to be exaggerated. Hungary had to re-open its nuclear dossier and by late 1973 the arrangement on the construction of 1760 MW capacity by 1980–1983 was ready at the ministerial level. The necessity of the nuclear blocs was not questioned at the decision-making level anymore. What is more, nuclear power gained popularity and a further two blocs were in the planning phase by the end of Comecon. Still, Hungarian ambitions remained humble compared to Czechoslovak plans with 11,280 MW until 2000 or developments in GDR (Senate Committee on Energy and Natural Resources 1991).

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An EU-Led Energy Transition

2.2.1 The Impact of the EU’s Initial Renewable Energy Policies on the CEE EU The European Union led by the EC and a handful of Western European states have taken a leadership role in global climate action since the early 1990s (Oberthür and Kelly 2008). Enjoying political support from national governments, the EC saw an opening to both set the global and European agenda on climate policy and expand its own scope of influence in supranational cooperation, by building on the bloc’s environmental agenda (Maltby 2013). CEE EU countries were hesitant to alter their energy systems in response to the Commission’s growing climate action ambitions. Their hesitance is predicated on fossil-fuelreliant systems that have also consolidated specific producer–consumer power relations (see Table 3 and Fig. 2). The CEE EU region has a substantially larger reliance on solid fossil fuels (predominantly coal) in comparison to the EU15. This is heavily concentrated in Poland and the Czech Republic; the former of which ‘stands on coal’ (Kuchler and Bridge 2018), while the latter also relies on coal to meet a substantial portion of its energy demand (Eurostat 2019a). Coal may play a smaller role in other CEE EU countries, but it has nonetheless been amongst the limited resources domestically available to these countries. Oil and natural gas play a slightly smaller role in the energy mix of these countries, but is intimately linked to their Table 3 Energy mix composition CEE EU versus EU15, 2017 (% of total energy supply) Solid fossil fuels Natural gas Oil and petroleum products Other renewables Wind Solar photovoltaic Nuclear heat Source Eurostat (2019a)

CEE EU 30.6 19.7 26.5 11.1 0.9 0.2 8.5

EU15 10.7 25.6 33.9 12.0 2.1 0.7 13.9

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Table 4 Reliance on Russian imports CEE EU versus EU15, 2017 (% of total imports of the given fuel) EU15 CEE EU

Natural gas 28.2 80.5

Oil and petroleum products 21.72 50.89

Source Eurostat (2019a)

foreign policy given its role in mediating their relations with Russia. This is conveyed through their aggregate high import reliance on Russian energy resources (see Table 4). The region’s nuclear capacities also tie them to Russia, since countries with nuclear capacities in the region generally have nuclear power stations reliant on Soviet technology. While the specificities of CEE EU countries’ energy systems vary case-by-case, their membership in the Eastern Bloc and their dependence on fossil fuels ha CEE EU’s lock-ins are strong leading their governments to follow the push to decarbonize from the EU and Western European counterparts, as opposed to leading this endeavour. The EC has been at the helm of climate action, taking an approach which combines targets with market mechanisms: most prominently, greenhouse gas (GHG) reduction goals and the EU emission trading system (EU ETS), respectively (Maltby 2013). The path dependence of CEE EU countries’ energy systems became clear when the Commission (2013) laid out its climate strategy following the EU enlargement in a Green Paper. It advocated for a 20% national binding target of renewable-based energy production in the EU by 2020, a significant increase from their 9% share when it introduced the proposal (European Commission 2010; Eurostat 2019a). There was a clear cleavage between the positions of EU15 and new member states, reflected in the latter group’s general opposition to taking any sort of climate action that would jeopardize economic prosperity. We gain some insight into this hesitance to change through discussions in the Council, where multiple CEE EU states bargained for ‘indicative targets’ that take into account the economic situation of the given country (see European Council 2006a, b). CEE EU government representatives agreed in the Council, but they did so only through the introduction of effort sharing between member

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states. The EC led a policy convergence in climate action between EU states, which, in principle, they all ascribed to and were included in discussions. However, this does not reflect on the asymmetric power relations between larger geopolitical powers and smaller ones. The matter of hesitance to change becomes clear, if we survey the pledges of EU15 countries alongside CEE EU states. They derived the effort sharing mechanisms to address the different capabilities of various states (e.g. wealth or development), but it also ultimately allowed CEE EU states to only sign commitments that allowed their emissions to grow. That is, they essentially circumvented any substantial change to maintain their current energy systems and economic goals. However, 2020 GHG emission targets where this first became evident allowed newly joined member states to increase emissions, while their Western (and Southern) counterparts had to reduce emissions (European Commission 2008). In a sense this was a win for the CEE EU countries, responsible about a fifth of EU emissions (Eurostat 2020b), since they negotiated an effort sharing that led to their less disruptive targets. Meanwhile, supranational directives began to harmonize the climate and RES policy in the EU, through which they also expanded the administrative burden weighing on member states, which had to transpose them into national legislation. CEE EU targets may have been unambitious, but they began to disrupt lock-ins of the existing political-legal system by bureaucratically imposing change that reflected action led by Western institutions. Renewable energy objectives were more lax for CEE EU countries when compared to their EU15 counterparts (European Commission 2009), similar to GHG reduction targets. Here too, we see the effortsharing principle as a tool that imposes lower RES penetration rates on CEE countries than their EU15 counterparts. While the Commission (2009) cites the need to ensure development and growth opportunities for the former group, this argument remains problematic since, for example, GDP per capita in some CEE EU countries is higher than those in EU15 countries (compare the Czech Republic with Portugal, for example). Despite the reduced burden on CEE EU countries they had to sign up to enact change and facilitate the penetration of renewables in their energy mixes. This was based on extensive negotiations and bargaining, but ultimately they too had to abide by effort sharing and

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take on action as well. This brought energy security to the fore in CEE EU countries, given the high costs a disruption to their energy systems would entail. As shown in preceding sections, governments under the Communist regime took on a paternal role insofar as they tasked themselves to provide affordable energy to their citizens. Some CEE EU countries have maintained this approach to date, making this an especially acute consideration in enacting an energy transition (Szabo and Fabok 2020), i.e. how can these countries provide the availability, accessibility, affordability, and acceptability of energy resources. The energy and electricity generation mixes of CEE EU countries only changed slightly prior to the EU 2020 agenda coming into effect between 2000– 2010 (Eurostat 2019b). During this period the Commission had little direct influence over CEE EU energy policies, since these countries only joined the bloc onwards of 2004.

2.2.2 Renewable Energy Expansion in the 2010s All of the above occurred prior to the fully-fledged launch of a global renewable revolution, which particularly took off in the early 2010s. By this time industrial policy became particularly supportive of renewable technologies in some countries, with Germany and China leading the way (Sivaram 2018). The price of RES rapidly declined in response to technological advancement and economies of scale and EU15 countries undertook their rapid deployment. They began to substitute declining combustible and nuclear installed capacities with wind from the turn of the century, which they followed with solar PV slightly later (see Fig. 1). EU15 endeavours were further facilitated through expansive government programmes, which became increasingly prominent in the early 2010s. Germany’s prominent Energiewende was amongst those that carried broad ramifications for the global, European and domestic energy scene (Jacobs 2012). However, the impact of EU15 action was slow to prompt CEE EU governments to undertake voluntary action. We see little indication from CEE EU countries to become first-movers in the RES scene, leaving EU15 governments to drive the transition.

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80% 70% 60% 50% 40% 30% 20% 10% 0%

Combustible

Wind

Solar PV

Nuclear

Fig. 1 Installed electricity generation capacities per fuel (Note EU15 full lines, CEE EU dashed lines. Source Eurostat [2019c])

CEE EU countries lagged in their diffusion of renewable generation capacities, while they continued to resist or hesitantly adopt further commitments. Their adoption of wind technology lagged, surpassing the 1% penetration threshold of installed capacities in 2008, eight years after the same had happened in the EU15. This window was much narrower for solar PV, with the technology reaching 1% in the EU15 in 2008, with the CEE EU shortly following in 2010. However, year-on-year expansion since then has been much lower in the latter group at an average yearly rate of 15.1%, in contrast to 21.4% in the EU15 between 2011–2017. The CEE EU lagged behind the EU15—unsurprising given the lower 2020 targets they had negotiated—but it was nonetheless changing its energy mix. The next wave of change came as the Commission (2013) published a Green Paper to discuss the bloc’s climate action between 2020 and 2030. Some states provided written answers to the questions posed by the EU Presidency in the unfolding policy debate: the UK requested increased ambition, which was generally reflected in the positions of Belgium, Denmark, Germany, Portugal, Sweden and Germany (European Council 2014a). Slovakia was the only CEE EU state to provide answers, in which it called for less ambitious targets and requested that the EU should prioritize the development of incentive

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schemes and a stable investment environment for the energy transition (European Council 2014b). This was fairly reflective of the region’s position, with government representatives seeking non-binding and less ambitious goals, otherwise threatening to veto the package (Fitch-Roy and Fairbrass 2018). Their positions were not based on climate change denial or disagreement over the energy sector’s role in climate policy, but their criticism ‘is directed at the level of unilateral emissions reduction efforts by the EU and the planned speed of transformation to a low-carbon economy’ (Geden and Fischer 2014, p. 11). The Paris Agreement provided further impetus for the EU’s climate and RES policy. In the follow-up to COP21, the Commission (2016) introduced the Clean energy for all Europeans Package, consisting of eight legislative acts. The recast Renewable Energy Act was one of these, which instated a 32% RES target by 2030 (European Commission 2018b). According to the governance regulation of the EU, member states need to submit their National Energy and Climate Plans (NECPs) for 2021–2030, which will indicate how the EU member states will enact climate and energy policy and how this relates to EU-level targets (European Council and European Parliament 2018). The NECPs submitted by member states show that ‘there is still a gap for the EU28. Under current draft plans, instead of at least 32%, the share of RES would reach between 30.4% and 31.9% in 2030 at Union level’ (European Commission 2019a, p. 3). Many member states failed to meet commitments required according to the Commission’s RES Formula, but most strikingly, it was Belgium, Hungary, Malta, Poland and Romania which were off their targets by a wide mark (European Commission 2019b. The Commission called on essentially all non-Baltic CEE EU countries to either ‘raise’ (Bulgaria, the Czech Republic, Hungary and Poland) or ‘significantly raise’ (Romania and Slovakia) the ambitions of their 2030 targets and elaborate on the specific policies that will guide their implementation (European Commission 2019c). The recast Renewable Energy Act was voted down by the Czech Republic, while Belgium, Hungary and Slovakia abstained (European Council 2018). The differences in EU15 and CEE EU approaches to RES policy are also reflected in the composition of their energy mixes. The relative role of ‘other renewables’—including all RES except for solar PV and wind

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energy, where change is mostly driven by biomass—has continued to climb in the EU15, while it has decreased in the CEE EU since 2014 (see Fig. 1). Meanwhile, the role of wind and solar PVs in the EU15 has grown to 2.1% and 0.7%, while respective figures for the CEE EU have reached 0.9% and 0.2%. The gap between the two blocs is also evident when looking at installed renewable (solar PV and wind) on a per capita basis (see Fig. 2), where the EU15 capacities were ahead of the CEE EU’s near four-fold in 2017. This trend is not a result of lower investment flowing to the energy systems of CEE EU countries. Tables 5 and 6 show that the investments flowing into the electricity generation have not shown a significant difference between the two groups of countries. Instead, it indicates the continuance of the status quo, whereby public and private entities especially in the CEE EU continue to invest along the path dependences in place. Renewable penetration in the EU15 has been able to substitute solid fossil fuels and nuclear at a much higher pace than their counterparts to the east. This has been reflected in declining combustible power generation capacities (see Fig. 3). In contrast, the 600 500 400 EU-15

300

CEE EU

200 100 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Fig. 2 Installed renewable (PV and wind) per capita (MW/million people) (Source Authors calculations based on Eurostat [2019c, e])

Table 5 Investment into the electricity sector per production (thousand e/GWh) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 EU15 21.9 22.97 23.58 24.83 26.73 23.74 26.3 19.94 24.76 23.65 CEE 26.3 27.54 36.8 35.24 36.32 33.12 32.31 33.82 28.74 21.9 EU Note EU15 excludes Luxembourg and Ireland due to the lack of available data Source Authors’ calculation based on Eurostat (2019a, d)

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Table 6 e/MW)

Investment into the electricity sector per installed capacity (thousand

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 EU15 89.09 87.37 118.31 111.64 111.11 99.57 96.70 103.25 89.4 67.3 CEE 80.64 77.58 79.15 77.80 81.39 70.96 75.12 57.07 70.94 67.01 EU Note EU15 excludes Luxembourg and Ireland due to the lack of available data Source Authors’ calculation based on Eurostat (2019a, d) 80%

350

70%

300

60%

250

50%

200

40%

150

30%

100

20%

50

10%

0

0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

400

Installed capacity EU-15

Installed capactiy CEE EU

Load factor EU-15-right scale

Load factor CEE EU-right scale

Fig. 3 Combustible fuel-based electricity generation (left scale: installed capacity in GW; right scale: load factor in %) (Source Authors calculations based on Eurostat [2019b, c])

CEE EU has curtailed solid fossil fuel demand, which has only been substituted with renewables to a limited extent, as oil has been able to grow its market share in recent years. The CEE EU’s reluctance to take further action has also been reflected in their approach to the bloc’s long-term climate and energy goals; 2030 and 2050 targets have been heatedly debated topics in recent years. The latter is based on a Commission (2011) proposal and entails quasi-decarbonization, while the former would provide a benchmark en route to decarbonization. At the United Nations Secretary General’s Climate Action Summit in September 2019, the quartet of the Czech Republic, Estonia, Hungary and Poland vetoed the Commission’s (2018a) Communication document on the matter, because the

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agreement stated that the EU should take action ‘to ensure a transition to a climate-neutral EU by 2050’ (Teffer 2019, n.p.). They forced the EU to conclude the high-level meeting by inviting the Council and the Commission ‘to advance work on the conditions, the incentives and the enabling framework to be put in place so as to ensure a transition to a climate-neutral EU in line with the Paris Agreement’ (European Council 2019a, n.p.). With the exception of Poland, these countries ultimately conceded to decarbonization, allowing the European Council (2019b) to endorse the objective. The reluctance of CEE EU countries was not uniform, but many of them have maintained a hesitance to change their energy systems. Or, only signing on to further action if those enabled some lock-ins to sustain in their energy systems—e.g. to count nuclearbased energy production as low carbon (BBC 2019)—and ensuring that their changes are subsidized by their EU15 counterparts.

3

Conclusion

The CEE EU is amidst its second energy transition within the span of sixty years. Beginning in the 1960s, the Soviet Union pushed the region to move away from its coal and imported oil-based energy system and diversify with Soviet natural gas, electricity and nuclear technology imports. The onset of the shift was agreed upon via political tools, with Moscow dictating the most crucial terms, since the CEE was heavily reliant on energy imports and was under the ideological and political domination of the Soviet Union. If we jump fifty to sixty years in time, we see an energy transition unfolding in the same region, which shares many similar dynamics, but in this case it is EU–CEE EU relations that are formative as opposed to Soviet–CEE EU. The main common characteristic is that there is a clear policy convergence between the CEE EU and the EU15, in terms of adapting renewables. There may be many differences between the Soviet Union and EU-led energy transitions in the CEE EU, but a key commonality is that they were externally imposed and bureaucratically mediated. The historical comparative framework introduced in this chapter also allows us to explore and present key dynamics of energy transitions in the

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CEE EU countries. Diversity of such trajectories is a very current feature of the broader Eastern European landscape. This volume takes a key step in introducing these paths, but it is also clear that there is much room for researchers to pursue further avenues of research. CEE EU countries represent a specific group, where the energy transition is interlinked with the political and policy ramifications of their EU membership. They participated in the decision-making processes and have taken mandatory measures following a lengthy, asymmetric and bureaucratically mediated negotiation process. Simultaneously, Eastern European states outside the EU have avoided introducing policies to substantially curb emissions or decarbonize their energy sectors. Countries in the Western Balkans or EU Eastern partners do not have effective carbon pricing schemes or ambitious renewable targets in place. Their energy systems continue to rely on fossil fuels, which are based on intimate relations with Russia in the oil and natural gas sector and China in the case of the coal industry. Unlike the case of the EU, where policymakers design energy policies to move the bloc towards carbon neutrality, non-EU countries in Eastern Europe lack a clear vision and changes in their energy systems have surfaced as a result of fierce competition between hegemons. There is some impetus for renewables supported by the EU, but this has been against incumbent fossil fuel interests. If we look further we find cases, such as in Belarus, where change prompted by climate considerations has been even more scarce. Their main energy policy drivers are Russian hydrocarbon price subsidies as was the case during the Comecon. The European energy transition is a multilayered process with a number of major trajectories. The EU provides a rather exceptional case in setting its 2050 goal to reach climate neutrality, which guides its energy policy. While this is based on Western Europe’s environmental- and climate-consciousness, as well as its industrial policy ambitions, it is rather the oddity as opposed to the norm. In most cases, and for Eastern European societies in particular, domestic policy preferences only offer limited agenda-setting power. Fully-fledged visions are scarce. Various government-imposed benchmarks may influence key trends, but market alternatives shaping the course of events only crystallize gradually. Many Eastern European countries do not have particularly large or influential lobbies linked to

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manufacturing in the energy sector, nor do they have the ample and variegated forms of energy resources necessary to run their economies, paving the way for the magnification of the external policy environment. Given these structural factors, the energy policies of semi-periphery countries are left to being heavily shaped by hegemons.

Notes 1. Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Slovenia and Hungary were the CEE countries to join the EU during the Fifth Enlargement in 2004. Bulgaria and Romania joined during the Sixth Enlargement in 2007, and Croatia joined via the Seventh Enlargement in 2013. These countries are the prime object of this study, but note that based on the availability of data there are some shortcomings of the approach. When discussing the historical, Cold War period, we have included data from the German Democratic Republic (GDR) where available, given that this too was subject to domination by the Soviet Union similar to that of the Eastern bloc. Data on the Baltic States and Yugoslavia is limited for this period; thus, we do not go into detail about them. Data availability for what we refer to as the CEE EU (see endnote 4) after the regime change is much better and we decided to include all these countries into our analysis in the latter half of the chapter. While we relied on the analysis of Czechoslovakia, Bulgaria, the GDR, Hungary, Poland and Romania in our historical analysis, we included the Baltic States and former-Yugoslav states into our work to expand its scope to all CEE EU countries. A relatively good comparison can be made, since the addition of these states do not substantially change the main dynamics of the region’s energy and climate landscape. For example, the emissions of the Baltic and former-Yugoslav states that have joined the EU since combined for only 10.4% of the CEE EU’s 2017 total, while their primary energy consumption amounted to 12.1% in 2018 (Eurostat 2020a, b). 2. Throughout this chapter we will limit our focus to CEE countries that joined the EU. For consistency reasons, we will refer to these countries simply as CEE EU. 3. By 1978 the GDR imported 23% of its oil from Iraq, Iran and other OPEC countries. At the same time, a large share of these imports was bartered, allowing East Berlin to save its hard currency.

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4. XIX-A-2-gg box, A-80/69, Országos Tervhivatal, Villamosenergia-ellátás és er˝om˝uépítés problémái a IV. és V. ötéves tervid˝oszakban. Budapest: National Archives of Hungary. 5. XIX-A-16-a box, 3907/1968 MSZMP KP, Department of Economic Policy, El˝oterjesztés a Politikai Bizottságnak a népgazdaság távlati fejlesztésér˝ol és társadalmi kihatásairól . Budapest: National Archives of Hungary. 6. In 1969 total oil consumption was at 5.1 million tonnes and peaked in 1978 at 12.4 mta (BP 2019). A good deal of this demand was covered by oil product imports from the Soviet Union; XIX-F-17-nn 27 box, 0098/69, Ministry of Heavy Industry, Az új k˝oolajfinomító és az azzal összefügg˝o létesítmények telepítése. Budapest: National Archives of Hungary. 7. XIX-A-2-gg 1969-67 (Atom 293d) box, 00217/I/1966 El˝oterjesztés. Budapest: National Archives of Hungary. 8. XIX-A-16-a box, 3907/1968 MSZMP KP, Department of Economic Policy, El˝oterjesztés a Politikai Bizottságnak a népgazdaság távlati fejlesztésér˝ol és társadalmi kihatásairól . Budapest: National Archives of Hungary. 9. XIX-A-2-gg 293 box, A-122/69, Princz György: A villamosenergia és er˝om˝uépítés problémái. Budapest: National Archives of Hungary. 10. XIX-A-2-gg box, A-80/69, Országos Tervhivatal, Villamosenergia-ellátás és er˝om˝uépítés problémái a IV. és V. ötéves tervid˝oszakban. Budapest: National Archives of Hungary.

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4 Tunnel with No Light: Entrapment and ‘Exit’ of V4 Countries’ Energy Transition Pengfei Hou

1

Introduction

Casting a spotlight on the Visegrad Group (V4) countries (the Czech Republic, Hungary, Poland and Slovakia), this chapter examines why these countries entrapped themselves by committing to the European Union’s (EU) energy transition. More importantly, concerning the otherwise ominous entrapment, the chapter suggests a micro-regional solution by revitalising the Visegrad Group. As per the EU’s decarbonisation ambition, greenhouse gas (GHG) emission shall be reduced to 80–95% below the 1990s levels by 2050. Nevertheless, due to the cumbersomeness and complexity of energy transition, the materialisation of the 2050 target has been divided into three phases: a reduction of at least 20% by 2020, 40% by 2030, and 60% by 2040 (European Commission 2011). Be that as it may, not being changed in all the phases is the principle P. Hou (B) School of International Relations, University of St Andrews, Scotland, UK e-mail: [email protected] © The Author(s) 2021 M. Mišík and V. Oravcová (eds.), From Economic to Energy Transition, Energy, Climate and the Environment, https://doi.org/10.1007/978-3-030-55085-1_4

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that member states should be responsible for their own energy mixes and ways of modernising the energy supply (European Parliament 2013). Energy transition takes time and money (Aklin and Urpelainen 2018); its materialisation cannot be separated from material provision, ranging from financial and technological to managerial capabilities. Although it is hasty to foretell that the V4 countries will have a bleak energy transition, it is not too difficult to tell that they are comparatively less prepared for such a transition than their Western European counterparts. In other words, embracing the energy transition advocated by the EU notwithstanding, each V4 country is virtually groping in the dark. The chapter centres on how the V4 countries can accomplish the EU-wide energy transition. Nevertheless, any solution suggested without examining the underlying rationales risks in missing the point. Therefore, with respect to their commitment to the transition, the V4 countries’ calculations of costs and benefits will be reviewed before we turn to the suggested micro-regional solution. Government decisions are outcomes of rational calculation of costs and benefits. In this reading, since the V4 countries have inherited a material disadvantage, they should have chosen to refrain themselves from supporting the EU-wide energy transition. Nevertheless, the V4 countries embarked on the transition regardless, which seems “mythical”. Of note, although this mythical act is not necessarily ill-fated, a hasty departure to energy transition would be inevitably bumpy. In the worst scenario, the V4 countries can even be mired in the darkness and beleaguered by irreversible socioeconomic damages. To examine the myth of the V4’s self-entrapment, this chapter employs Jachtenfuchs and Kasack’s (2017) analytical framework of exit-and-voice. To do so, we have to clarify one more point beforehand. Although the EU’s decarbonisation goal can be achieved by using renewable sources of energy (RES), such as biomass (Connolly et al. 2014), and by nonrenewables, such as nuclear energy (Pr˘av˘alie and Bandoc 2018), the chapter has no intention to elaborate on the difference between renewables and non-renewables. Central to the chapter is the argument that less materially prepared notwithstanding, due to the increasingly monetised and moralised energy issue, the V4 countries have entrapped

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themselves in the EU-wide energy transition. Given that the V4 countries hastily embarking on the transition are likely to incur considerable socioeconomic damages in the long run, they shall well prepare themselves beforehand. Having said that, since the V4 countries similarly perceive Russian energy, one of the most critical factors for their transition, I suggest the “Visegrad formula”, a term borrowed from Kolankiewicz (1994), for the transition. Whereas energy transition separately carried out by each V4 country is more likely to be dashed, they have a better chance of accomplishing it by enhancing energy cooperation in the Visegrad Group. In the remainder of the chapter, the main argument is developed in four sections. The second section of the chapter examines the V4 countries’ self-entrapment myth through the exit-and-voice framework and the third section explores the intensity of micro-regional initiatives in the EU. The fourth section studies how the Russian factor has affected the V4 countries’ preferences of energy transition. Different from Western European countries, the V4 countries tend to securitise Russian energy, which, in turn, spurs their self-entrapment in the transition. In the fifth section, a Visegrad formula for the entrapment is suggested.

2

The Self-Entrapment Myth: Exits and Voices

In examining the problem-solving preferences of sub-units in federal and supranational polities, such as the EU, Jachtenfuchs and Kasack (2017) observed that sub-units (member states in the case of the EU) mainly have two options: either exit or voice. In principle, sub-units aiming to maximise autonomy in policymaking favour the exit strategy, whereas those preferring collective problem-solving skew towards the voice strategy. The exit strategy has three variants, namely, radical, selective and de facto exits. The radical exit aims to maximise autonomy. However, it is also a measure “which potentially involves strong trade-offs and high costs because complete exit also entails exit from policies which a subunit likes and from which it profits” (Jachtenfuchs and Kasack 2017,

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p. 604). In the EU setting, Brexit is one of the most recent examples of the radical exit. A selective exit is less radical in that “one or several specific policies are not applied in the respective sub-unit” (Jachtenfuchs and Kasack 2017, p. 605). Due to the heterogeneity in the EU, the possibility of reaching a collective decision varies from one issue to another. Whereas a selective exit in the EU’s trade regime is less likely to occur, an EU regime aiming too high or deemed as aggressive is more likely to trigger member states’ selective exits. Meanwhile, the implications of each selective exit differ. For example, France and the Netherland’s selective exits from the European Constitutional Treaty in 2005 foiled the EU’s constitutional scheme; by contrast, Poland and seven other countries (the Czech Republic, Hungary, Sweden, Denmark, Romania, Bulgaria and Croatia) favoured the selective exit from the Eurozone, and such selective exits have hardly endangered the monetary union. Instead, admitting such a selective exit, some observers suggest adopting differentiated economic governance in Eurozone and non-Eurozone (Armstrong 2014; Fasone 2014). The de facto exit or the “autonomous application of collective policies” (Jachtenfuchs and Kasack 2017, p. 603) is the most nuanced exit strategy and is characterised by self-automated compliance. Pursuing “fewer substantive or procedural constraints […] sub-units have to apply a collective policy but have more autonomy than the other sub-units in deciding how and to what degree they apply it” (Jachtenfuchs and Kasack 2017, p. 606). In the EU setting, non-Euro member states such as Poland, Hungary and the Czech Republic are the most relevant cases in point. Aiming to preserve their autonomy on monetary issues, Poland, Hungary and the Czech Republic chose to opt-out from the Banking Union (2012). Sharing the communitarian aim of monetary stability, “they believe they can provide for the same level of stability of their banking sector as the ECB [European Central Bank], but cheaper” (Méró and Piroska 2016, p. 216). The voice strategy also has three variants. Sub-units’ voices in collective decision-making can be expressed through intergovernmental agreements, vetoes and participation. Basically, “[i]n a system of shared policy-making, a sub-unit has an interest in being present in the relevant decision-making bodies to protect its autonomy” (Jachtenfuchs and

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Kasack 2017, p. 607). Concerning the intergovernmental agreements, it is the strategy through which sub-units’ autonomy can be most strongly preserved (Jachtenfuchs and Kasack 2017). Meanwhile, the intergovernmental agreement can at best be achieved among countries sharing the same or similar interests. Jachtenfuchs and Kasack argue that in “the case of the veto, sub-units have to participate in formal decision-making procedures, but each of them can prevent a collective decision” (2017, p. 609). As to the participation, it “means that sub-units are involved in collective decision-making process for the entire federation, but that no individual sub-unit can block them” (Jachtenfuchs and Kasack 2017, p. 609). In the EU setting, a single veto can still play a decisive role in sensitive policies, such as social security and taxation. Nevertheless, after the first introduction of the qualified majority voting by the Single European Act 1986, the effect of a single veto was discounted. Apart from that, the amendment of the Lisbon Treaty in 2009 further “increased the number of areas where qualified majority voting in the Council applies” (EUR-Lex 2020, n.p.). Before examining the V4 countries’ commitment to the energy transition by employing the exit-and-voice framework, we have to note the fact that, concerning the EU-wide energy transition, the EU has not imposed effective legal obligations upon individual member states. From the European Commission’s (2011) Energy Roadmap 2050 to the European Council’s (2019a) commitment to the adaptation of the long-term strategy in early 2020, the transition is mainly binding for the EU as a whole, whose advocation of best practices aims to preserve the EU’s competitiveness (European Council 2019b). With respect to the Energy Roadmap, it was a non-binding communication aimed to inform other EU institutions of new and complex issues. Concerning the European Council’s commitment, it entailed non-binding conclusions, which “are used to identify specific issues of concern for the EU and outline particular actions to take or goals to reach” (European Council 2020, n.p.). Having said that, although the EU committed to the legally binding Paris Agreement as a joint Intended Nationally Determined Contributions (Jagers et al. 2020), it has not yet made any legally binding provision for member states. Likewise, although the target of using

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renewable energy sources was set for each member state, the target simply failed by 2010 (Ciucci 2020). In consequence, in the recast Renewable Energy Directive in December 2018, only an overall EU target was set, which gave “Member States leeway to determine their own contribution to the target” (Monti and Romera 2020, p. 2). In other words, the EU’s advocation for energy transition thus far has either failed to impose effective juridical sanctions on individual member states, or simply forsaken the intention of doing so. In a way, this is due to the lack of effective rules. That being so, the European Parliament, aspiring to increase the EU’s climate ambition, began to urge the European Commission “to present a proposal for a European Climate Law” (European Parliament 2020). The non-binding nature of the energy transition has a twofold implication for the V4 countries. One is that the V4 countries, theoretically, can choose to exit from the transition. Additionally, since it is harder for the V4 countries to upload their preferences into the EU arena (see below), they should have chosen to keep away from the transition. However, the V4 countries have straightforwardly and surprisingly committed to the transition. As put by Fischer and Geden (2014, p. 11), even though the V4 countries placed a high priority on energy prices and the use of fossil fuel, “[y]et this has not led them to call for supplementary headline targets in the areas of competitiveness or supply security”. The V4 countries’ commitment to energy transition can be partially explained by the exit-and-voice framework. On the one hand, the framework can shed some light on the otherwise arbitrary policymaking process, while, on the other hand, it, has not, however, answered why the less prepared V4 countries hastened to the transition. Therefore, to understand the V4 countries’ mythical behaviours, we have to borrow the concept of entrapment . The concept of entrapment in EU studies was made known mainly by Schimmelfennig (2003) who, in his analysis of the Central and Eastern European (CEE) countries’ striving for EU accession and NATO membership, observed that the Europeanness initially perceived by the EU had entrapped itself rhetorically. Taking advantage of the EU’s rhetorical entrapment, the CEE countries successfully attained EU membership in 2004.

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Candidate states intended to exploit the rhetorical entrapment, such as the CEE countries before 2004 and Turkey awaiting in the antechamber (Schimmelfennig 2008, 2011), and so did the EU in aiming to socialise member states. Exploiting the normative entrapment after accession, the EU can use it to nudge member states into a communitarian stance. Delineating the EU’s usage of this technique, Thomas (2011, p. 6) states that “once member states have committed themselves to a particular set of norms and/or policy course, they are likely to find themselves constrained to take further actions that do not reflect their original intentions and/or current preferences”. The EU’s normative entrapment has yielded mixed results yet is effective through naming and shaming “if the actors consider the norms legitimate” (Risse 2011, pp. 200–201). In the case of the V4 countries, the EU’s energy transition has been scientifically justified, and behind the transition is the proclaimed collective good. The transition has been put on a solid moral footing, since, as argued by Makowska and W˛asi´nski (2019), any veto is harmful to a state’s image. Notably, potential reputational damages aside, the V4 countries are also eager to get rid of the past stigma of being the origin of heavy pollution. Due to the high number of energy-intensive industries and the high consumption of poor-quality fuels (Dienes and Shabad 1979), the CEE was notorious for severe air pollution during the Communist period. Therefore, although Poland and the Czech Republic prefer to have a higher share of coal in their energy mixes (Bouzarovski and Herrero 2017), they have desisted from doing so. Consequently, Aklin and Urpelainen were able to argues, that for “the first time, our societies are not solely maximising quantity and minimising cost” (2018, p. 32). With the negative externalities taken into account, the use of high emission energy sources such as coal is now under growing moral pressure (cf. Collier and Venables 2014). However, the V4 countries’ self-entrapment option cannot be explained without considering the monetised dimension. Specifically, energy has been closely interwoven with economic benefits, such as subsidies. Since the EU membership is the premise on which economic benefits can be claimed, the risk of losing them has stopped the V4 countries from choosing radical or selective exits. In particular, compared with

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any material loss not imminent, decision-makers are prone to myopic loss aversion (Sutter 2007). Due to the increasingly monetised and moralised dimensions of the energy issue, the EU-wide energy transition generated the pressure for compliance amongst the V4 countries. In particular, the compliance pressure has been further augmented by the growing public awareness of climate change. Additionally, the best-practice-model energy transition has triggered a competitive spirit among national actors as well (Knill and Lenschow 2005)—member states’ leaders fearing to look like laggards have chosen to embrace the otherwise less popular energy transition (Drezner 2001).

3

Micro-Regionalism and the EU

With the complexity of the EU-wide energy transition considered, it is tempting to ask: If the socioeconomic damages are yet to come in the short run, how shall the self-entrapped V4 countries proceed to prevent them from occurring in the future? There can be several different answers to this question. A micro-regional solution is suggested here as the intensity of micro-regional initiatives in the EU has provided an amicable setting for such an enterprise. Micro-regional initiatives can be understood in the old and new strands of regionalism. Old regionalism highlights state-led regionalisation and is constructed in a top-down fashion. Correspondingly, regional initiatives are formed by a group of geographically contiguous states, and micro-regions are interchangeable with sub-regions (Hettne 2003). By contrast, “new regionalism views regionalism to be a more multifaceted and comprehensive phenomenon including state and non-state actors” (Acharya and Johnston 2007, pp. 9–10). The inclusion of non-state actors in new regionalism implies that a regional initiative can also grow from the below (Soderbaum 2016). Moreover, micro-regional initiatives in new regionalism can either be actor-orientated or be sector-oriented. When it is actor-oriented, it encompasses both states and non-state actors; when sector-oriented, it is organised functionally in the form of corridors or growth triangles (Soderbaum 2016).

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Since the ratification of the Single European Act in the late 1980s, “the EU take micro-regional development more seriously, and thus promoted a significant increase in the structural and community funds for poorer regions in the EU” (Soderbaum 2016, p. 111). In consequence, the enthusiasm for micro-regional projects reached an apogee after the establishment of the Committee of the Region (CoR) in 1994. Concerning the micro aspect of the micro-regionalism in the EU, it includes actors ranging from states to cities; sectoral, micro-regionalist initiatives of different themes have been established, such as the Central European Initiative (1989), the Visegrad Group (1991), the Council of the Baltic Sea States (1992), the Salzburg Forum (2000), or the Central European Defence Cooperation (2010). As far as energy is concerned, the importance of CEE energy cooperation, together with transport and digital, has been underlined in the Three Seas Initiative (2016). In the Baltic Energy Market Interconnection Plan (BEMIP), how to integrate the littoral states of the Baltic Sea into the EU energy network is highlighted. The Central and South Eastern Europe Energy Connectivity (CESEC) aims to “accelerate the integration of central eastern and south eastern European gas and electricity markets” (European Commission 2020b, n.p.). Although the above energy initiatives were established against different backdrops and the impact on the CEE countries’ energy transitions varied, the institutionalisation as such can at least incentivise the states concerned to generate the critical political will, the lack of which is unlikely to set any new or revamped micro-regional initiative in motion. Although the EU is characterised by the intensity of the micro-regional initiatives, such intensity does not necessarily guarantee the success of a new or revamped one. The intensity is conducive to the creation of an amicable setting, but the key of a new or revamped micro-regional initiative is contingent on how the actors concerned can be effectively coordinated. To the self-entrapped V4 countries, a fine-tuned micro-regional solution is not only crucial to prevent them from incurring considerable socioeconomic damages, but also pivotal to prevent them from relapsing into the further dependence on fossil fuel. In the following two sections, before the examination of the Visegrad formula as the suggested micro-regional solution, the V4 countries’ sui

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generis interest behind the energy transition will be reviewed. Although the V4 countries and the Western European counterparts are dependent on Russian energy, it has different security implications to them, which, in turn, has led to different views on energy transitions.

4

Russian Energy: One Source, Two Stories

A hasty solution without considering the cost and complexity of energy transition forebodes ill to its prospect. The V4 and Western European countries perceive Russian energy differently, which, in turn, has affected their envisaged routes to the transition, hence it is necessary to scrutinise their divergence on the security implications of Russian energy. Europe, as a geographical region, lacks but increasingly needs energy (Chalvatzis and Ioannidis 2017). Ever since the establishments of the European Coal and Steel Community (1952) and the European Atomic Energy Community (1958), the EU “is peppered with examples of energy related projects” (Butler 2018, p. 227). In the new millennium, the significance of energy and its security have been written into a series of EU documents, such as External Energy Relations: From Principles to Action (2006), the Energy Policy for Europe (2007), the Energy 2020 Strategy (2010), the European Energy Security Strategy (2014), and the Framework Strategy for an Energy Union (2015; Samkharadze 2019). Compared with other sources, Russian energy dominates the EU market and is the main supplier to the EU of several energy sources including crude oil, natural gas, and hard coal (Eurostat 2019). Taking the EU’s import of natural gas for example, the first three suppliers in 2017 were Russia (40%), Norway (26%) and Algeria (11%). Energy security in Russia has been highly politicised as a security of demand issue (Stent 2014, p. 190). Specifically the energy issue, strategically manoeuvred, led to Russia’s preferences for long-term gas contracts and the monopoly of transit routes. However, the same Russian energy has different implications for Western European and the V4 countries. Roughly speaking, whereas the V4 countries align Russian energy with security issues and place it on top of the political agenda, Western European countries regard it as an issue of single market and climate change

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(Austvik 2016). For the V4 countries, Russian energy “is marked by the shadow of it being trade with the former hegemon” (Balmaceda 2002, p. 15). Resulting from this unequal relationship, the legacies left in the V4 countries “consisted first and foremost of energy resource development policies, the dependency relationships built into the system and the types of energy mixes it favored, infrastructural legacies, and institutional trade arrangements” (Balmaceda 2017, p. 407). By contrast, Moscow was a reliable energy supplier to West Europe even throughout the Cold War (Stent 2014). In the aftermath of the 2004 accession, instead of being overcome, the divergence on Russian energy between the V4 and Western European countries grew more apparent alongside Russia’s increasing ‘weaponisation’ of energy (cf. Collins 2017). Two different rationales touching on the establishment of the Energy Union have reflected the above divergence. In 2014, Donald Tusk, the then Polish Prime Minister, proposed to establish an Energy Union, with which to confront “Russia’s monopolistic position” as an energy supplier (Tusk 2014, n.p.). Nevertheless, the Energy Union established in the following year emphasised more on energy affordability and low-carbon economy within the single market (European Commission 2015a). The Energy Union will further integrate the V4 countries into the single energy market, however, the V4 countries are likely to become more dependent on Russian energy as well, albeit in a more indiscernible way. As warned by Austvik (2016), the gradual opening of the EU energy market can facilitate Russia energy giants’ downstream investment in the V4 countries, such as Gazprom’s vertical integration in Europe. Apart from that, the tactics to hide the origin of capital by some Russian investors have given rise to serious worries in the V4 countries (Kalotay et al. 2016). Although the agenda-setting capability of the V4 countries varies between areas, they are, in general, less capable of affecting the EU agenda. As observed by Börzel (2002, p. 204), new member states as latecomers face “a double disadvantage in the European regulatory contest”—one is the lack of policies to upload their preferences to the European level, the other is the lack of sufficient staff power, money, expertise and technology. Although the V4 countries have beefed up their agenda-setting capability after the accession, their “well-developed

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positions on the [energy] issue” (Mišík 2015, p. 203) failed to resonate in Brussels, as displayed by the above-mentioned rationales behind the establishment of the Energy Union. To overcome the above divergence between CEE and West European member states, two main remedies can be prescribed. One appeals for solidarity; the other remedy takes law as the last resort. Whereas the appeal for solidarity is voluntary in nature, energy security litigation is coercive. The solidarity principle was laid down in the Treaty of European Union (1992). Extending the principle to energy issues, the EU published a new regulation in 2017 (Official Journal of the European Union 2017). Aiming to improve the security of gas supply, the regulation emphasised the importance of energy solidarity time and again. As warned by the EU, the lack of energy solidarity will cause severe damages to “the functioning of the electricity system or would hamper the production and/or transportation of gas” (Official Journal of the European Union 2017, p. 25). With regard to energy security litigation, the European Court of Justice (ECJ) takes the lead. “Over time, the European Court of Justice has pushed legal integration much further than member states initially had contemplated, and also beyond economic or political integration” (Katzenstein 2005, p. 72). Among others, the General Court of the European Union (Case T-883/16 Republic of Poland v. European Commission) successfully challenged the exemption regime of the OPAL pipeline in 2019. Preliminarily evaluated, the above two remedies, however, are not as effective as they should be. Concerning the advocated energy solidarity, the dualistic divergence of perceptions on Russian energy can hardly be overcome in a short time while, with regards to litigation, since “the ECJ’s precedent technique is complex and situational” (Jacob 2014, p. 7), any attempt to have it applied elsewhere can be problematic. Taken together, since the above divergence cannot be bridged in the foreseeable future, it is wise for the V4 countries to choose a transition route of their own.

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The Visegrad Formula

In conjunction with “the more general rescaling of economic, political, and social processes” after the Cold War (Jessop 2003, p. 179), micro-regionalisation speeded up in the CEE region. Among different micro-regional initiatives, the Visegrad Group is one of the earliest and most functioning projects. Although the Visegrad Group was initially organised for EU accession, it, among other possibilities after 2004, can also be turned into “a useful platform for joint planning on energy sector developments” (Central Europe Energy Partners 2018a, p. 20). That being so, borrowing from Kolankiewicz (1994), the chapter suggests the Visegrad formula for the V4 countries—self-entrapped in the energy transition—that had served as a common datum line for the V4 countries in “collective uncertainty” (Kolankiewicz 1994, p. 114). In the same fashion, since the V4 countries have to manage the shared uncertainty emanating from the EU-wide energy transition, the Visegrad formula redux is one of the means by which a micro-regional platform can be provided for the V4 countries otherwise acting alone. In the following two parts, the V4’s energy cooperation before and after EU accession will be first reviewed before the examination of its feasibility.

5.1

Energy Cooperation Before and After EU Accession

The Visegrad Group was established by Poland, Czechoslovakia and Hungary, that all shared the same return-to-Europe goal, in 1991. Although the Czech Republic under the Klaus government (1992–96) was reluctant to adhere to the regional initiative, the Group, however, has outlived the initial aim. The lingering of the Visegrad Group after 2004 can be partially explained by the sticky nature of institutions (North 1990). Once established, institutions can hardly be dismantled even if they have lost the functions for which they were previously designed. As to the stickiness of institutions, it can be explained by two points: one is the expected higher cost of dismantlement than the possible benefit that an institution is likely to bring; the other is its revitalisation by

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adding new agendas. Although the EU accession had succeeded in 2004, the Visegrad Group, instead of being dismantled, has been loosely kept alive until now—the V4 countries even regularly hold meetings before European Council meetings (Arato and Koller 2018). As far as the energy issue is concerned, the V4 countries are highly dependent on, but extremely vigilant about, Russian energy (Mišík 2012). Muddling through the energy cuts in 2006 and 2009, the V4 countries especially raised their awareness of the threat and began to search for countermeasures. Since energy cooperation among the V4 countries did not start from scratch, a better understanding of the suggested Visegrad formula requires a review of their cooperation before and after 2004. Before 2004, the V4 countries’ energy cooperation was mainly driven by the aspiration for EU membership. Thus, relaunching the Visegrad Group in 1999, the V4 countries’ prime ministers agreed to “maintain the regional profile of the group and set[ting] policy objectives in the field of education, culture, science, technology, infrastructure, environment, science and cross-border cooperation” (Arato and Koller 2018, p. 91). In 2002, the V4’s Energy Working Group was created, with an aim to “respond to EU demands to improve information exchange in support of market liberalisation, and speed up privatisation strategies” (Butler 2018, p. 228). However, energy cooperation had not been brought forward until the V4 countries were affected by Russia’s energy cuts. Although the general environmental issue continued to play a role in the Visegrad Group after 2004 (Marušiak 2013), it was not until the “external shock” resulting from Russia’s energy cuts that the V4 countries were galvanised into enhancing cooperation (Aklin and Urpelainen 2018). Positively interpreting the crisis, Václav Bartuška, the Czech Republic’s Ambassador-at-Large for Energy Security, claimed that: What we really need is a few more crises in deliveries for Europe. Because we need to wake up, and the one in January was too short and too small … And I would to thank [Russian] Prime Minister [Vladimir] Putin and his colleagues for helping us to form a unified European policy, because without his help we would never have the EU 27 speaking with one voice in January this year. (Bartuška cited in Pannier 2009, n.p.)

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As one of the initial steps, the growing awareness of Russia’s energy threats has led to the “significant development of cooperation in the area of energy security […] in the post-accession period” (Strážay 2011, p. 26). An institutional platform is pivotal for the cooperation to be routinised. But to build a platform afresh is costly in terms of money and time; an enhanced cooperation in the Visegrad Group is more feasible. Since a parallel cognitive convention is essential for sustaining an institution (Douglas 1987), the increasing urgency to enhance cooperation in the transition provides the right cognitive prerequisites for revitalising the otherwise loosely relevant Visegrad Group.

5.2

Groping in the Dark

Referring to the environment problem, Slavoj Žižek cried: “Don’t just talk, do something!” (Žižek 2009, p. 11). With respect to the V4’s selfentrapment in the energy transition, Žižek’s call also applies. Although the Visegrad formula does not automatically lend itself to immediate operationalisation, the urgency of doing so can at least be facilitated by the geographical proximity and the institutional readiness in the region. First, the micro-regional Visegrad formula can benefit from the geographical proximity of the V4 countries as “energy systems are constituted spatially” (Bridge et al. 2013, p. 333). Both gas and electricity, among others, are indispensable for a successful energy transition (Pollitt 2012), yet geographical factors play a decisive role in building a pipeline network and a power grid. Since the gas at standard pressure is less energy-rich than liquid petroleum (Dannreuther 2018), the pipeline system is by far the optimal means for the transportation of natural gas. Likewise, as to the transmission of electricity, the potential power loss (cf. Humpert 2012) encourages the regional planning of power grids. In other words, technological constraints have turned electricity into a regionally traded commodity (Global Commission on the Geopolitics of Energy Transformation 2019). Second, an appropriate institution does matter. Synchronising the V4 countries’ cooperation can facilitate energy transition in two aspects. A well-coordinated regional initiative possesses more bargaining power.

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Since the EU’s decarbonisation goal has not prescribed any collective means, the small and midsize V4 countries can increase their leverage in energy trade by aggregating their resources. Moreover, regional initiatives can raise the cost for defection by imposing extra constraints on all participants. These can be, for example, in the case of natural gas longterm contracts as “gas trade, in contrast to oil, generally requires longterm contracts if it is to be feasible” (Dannreuther 2018, p. 24). With an appropriate institution set in motion, the capriciousness emanating from politics can be minimised. The success of the Visegrad formula asks for political volition and material capability as well. In this aspect, “the V4 countries are not always united on energy projects, and the national approach to infrastructure development can be seen in some of the projects” (Mišík and Oravcová 2018, p. 25). For pessimists, the V4’s commitment to the EU-wide energy transition will not fare well. Optimistically interpreted, the lack of consensus amongst the V4 countries also implies the possibility for future cooperation. More sanguinely, the V4 countries’ outperforming economies in recent years can give such cooperation a boost. In practical terms, the Visegrad formula can be applied among the V4 countries, within the EU, and even to the cooperation with non-EU countries. Firstly, within the V4 countries, the potential of the Visegrad formula can be further exploited by dovetailing it into the BEMIP and the CESEC, respectively. In the BEMIP, Poland is the only member of the Visegrad Group, and it can act as the northern point, through which the V4 countries can gain access to the Baltic Sea energy. In this aspect, the Gas Interconnector Poland–Lithuania (GIPL) and the Poland–Slovakia Gas Interconnect that are supposed to be completed in 2021 can serve this end (European Commission 2019). By the same token, since Hungary and Slovakia are members in the CESEC, they can serve as the entry points for the Krk LNG terminal in the south and the Black Sea energy through the BRUA pipeline in the east. Although the Czech Republic is absent in both the BEMIP and the CESEC, the expansion of the bi-directional STORK II between Poland and the Czech Republic can integrate the latter pipeline into the Visegrad energy network after its expected completion by 2022 (Central Europe Energy Partners 2018b).

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Additionally, the energy potential to be explored in the V4 countries can also contribute to the transition. For instance, the development of clean coal technology can boost the transition in Poland and the Czech Republic, the shale oil extraction technique for Poland, and the development of renewable energy for industrial use in the region. Discussing the prospect of developing renewable energy, Muller-Kraenner highlights the potential of biomass energy in Poland. He points out that “[i]n Poland, as in the other Central and Eastern European countries, the restructuring of the energy and agricultural sections could go hand in hand” (Muller-Kraenner 2007, p. 82). Secondly, the V4’s energy transition can benefit from the EU in two ways. One is the availability of the EU’s financial instruments; the other is the market mechanism for carbon emission through the EU Emissions Trading System (ETS). Although the EU, as a financial facilitator, “cannot impose cooperation on the V4 countries, as illustrated by the cases of the Poland–Czech Republic inter-connector and the BRUA pipeline” (Prontera and Plenta 2020, p. 8), the V4 countries can benefit from the communitarian instruments, such as the TransEuropean Networks for Energy and the Projects of Common Interest. Set up in 2005, the EU ETS works on the cap and trade principle (European Commission 2015b). From the original National Allocation Plans to the EU-wide ETS emission cap (Wettestad et al. 2012), the verified emission report of 2005 set the baseline “by which the Commission judged the acceptability of proposed caps for the ensuing 2008–12 period” (Ellerman 2009, p. 5). Although the allocation from phase three (2013–2020) onward has been mainly aligned with the “one product = one benchmark” approach (European Commission 2020a), the V4 countries generally receive greater auction rights than their 2005 emission benchmarks (Ellerman et al. 2014). Thirdly, the V4 countries can use the V4+ approach to extend energy cooperation beyond the EU. Although the Visegrad membership is fixed, the V4+ approach has extended its collaboration to non-V4 countries (cf. Strážay 2018). In the EU, “the Visegrad Group tried to expand its reach to other countries (including Bulgaria and Romania) and invited newly acceded Croatia as an observer” (Wurzel et al. 2019, pp. 261–262). Since the V4 countries carry no colonial baggage, the V4+ approach can serve

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as a more suitable platform for energy cooperation with developing countries such as China. The EU-wide energy transition cannot be detached from infrastructural development. In this aspect, China’s expertise has the potential to further catalyse the efficacy of the Visegrad formula. Summing up, none of the above approaches can fully work separately, only by a combination of the three can the V4 countries grope in the dark with a higher chance to succeed. Meanwhile, the Visegrad formula takes time to develop. Although a new agenda is not always the panacea for revitalising an existent institution, it is an approach less costly for the V4 countries. Concerning the energy transition, “it would be a mistake in the future not to use the potential that the V4 is offering” (Strážay 2018, p. 174).

6

Conclusion

Collier warned that “further EU enlargement towards the East is unlikely to make agreement on environmental matters any easier” (1996, p. 136). With hindsight, such a warning is only partially tenable. On the one hand, the CEE countries still have a long way to go before catching up with their Western European counterparts. On the other hand, however, their compliance with EU environmental norms has improved (Andonova and Tuta 2014). With respect to the EU-wide energy transition, the materially less-prepared V4 countries simply chose to opt in. To understand the rationality behind the V4 countries’ irrationality of committing themselves to the transition, this chapter employed Jachtenfuchs and Kasack’s (2017) exit-and-voice framework that revealed the otherwise arbitrary decision-making process in the region. In the EU setting in particular, member states aiming to preserve more autonomy prefer the exit strategy; the voice strategy is favoured for collective problem solving. Although neatly demarcated, the exit-and-voice framework is not, however, adequate to explain the complexity of the EU-wide transition, nor can it explicate the V4 countries’ predicament. Considering the potential socioeconomic damages, the V4 countries who lack material provisions, ceteris paribus, should have chosen to opt out.

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However, this was not the case and the concept entrapment has been borrowed to explain V4’s support for the energy transition. Roughly speaking, due to the increasingly monetised and moralised dimensions of the energy issue, the V4 countries have chosen to entrap themselves in the transition. Since the V4 countries share a cautious approach towards Russian energy, a micro-regional solution by revitalising the Visegrad Group is suggested. Notwithstanding the feasibility explored, it is worth pointing out that the Visegrad formula does not preclude a possible failure. Where the willingness of political cooperation is not adequate, or the politicoeconomic cost of quitting conventional energy is extremely high, the Visegrad formula can virtually go nowhere. In particular, for the countries having considerable coal reserves, such as Poland and the Czech Republic, they, under given circumstances, are more likely to backslide into the past energy paradigms. In the EU-wide energy transition, the V4 countries have only been told that there should be light at the end of the tunnel. However, how to get there is a matter of one’s own making. Depicting the seriousness of environmental issues, Heilbroner (1974, p. 13) once asked, “Is there hope for man?” Adapting his question, this chapter asks “Is there any hope for the V4 countries’ energy transition?” The above analysis proposes an answer: Whereas incoordination is more likely to result in failure, the V4 countries have a better chance of walking out of the tunnel if they cautiously revitalise the Visegrad Group in terms of energy cooperation. Acknowledgements This research is facilitated by the China Scholar Council (No. 201708060001). I am grateful for the invaluable comments given by Matúš Mišík and Veronika Oravcová. Any flaws or errors are entirely my responsibility.

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5 Public Attitudes to Sustainable Energy Transitions in the Visegrad Four: Historical Legacy and Emerging Trends Izabela Surwillo and Milos Popovic

1

Introduction

Ensuring a reliable and secure energy supply becomes increasingly challenging when the internationalization of energy markets, rising energy prices, and a continuing dependence on fossil fuels have to be additionally reconciled with ambitious climate mitigation goals and transition to more sustainable energy systems (World Energy Council 2013). In this light, members of the Visegrad Group (V4; Czechia, Hungary, Poland, and Slovakia) are often seen as foot-draggers on climate action in the EU. I. Surwillo (B) Centre for Security Studies, Metropolitan University Prague, Prague, Czech Republic e-mail: [email protected] M. Popovic The Institute of Security and Global Affairs, Leiden University, Leiden, The Netherlands e-mail: [email protected] © The Author(s) 2021 M. Mišík and V. Oravcová (eds.), From Economic to Energy Transition, Energy, Climate and the Environment, https://doi.org/10.1007/978-3-030-55085-1_5

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In recent years, the V4 undermined the EU ambitious climate agenda on several occasions by protesting significant greenhouse gas emissions cuts or blocking the EU 2050 carbon-neutral target (Renssen 2014; Morgan 2019; Zeilina 2019). Simultaneously, heavy reliance on fossil fuels in Poland and Czechia, and the region-wide struggle to overcome common trends towards ever-larger generation units at the expense of more decentralized forms of energy, often put the V4 at odds with the EU’s goal of sustainable energy transitions. However, the V4 governments faced with the challenge of decarbonizing energy supplies not only have to weigh different energy policy options against each other but will be increasingly influenced by the changing public perceptions on the matter. The example of countries like Germany showed that high societal mobilization and environmental awareness can lead to very tangible energy policy results as far as transitions to sustainable energy systems are concerned, and even change the main energy policy course into a more socially acceptable one (Buchan 2012). In this regard, the region has been marked by lower ecological awareness and societal disengagement from the issues of energy. In Central and Eastern European (CEE) countries with traditionally centralized political authority and the communist legacy of separating societal actors from the management of resources (Jehliˇcka and Smith 2007), active interest in the energy and climate issues does not come easy. Simultaneously, public support for the development of clean energy technologies and energy efficiency measures could be a key factor in putting pressure on political elites to implement more progressive energy solutions and lead to a faster shift to sustainable energy systems with social involvement. This chapter investigates shifting attitudes to energy and climate issues in Czechia, Hungary, Poland, and Slovakia. Using mostly Eurobarometer data, it asks to what extent the societies of the V4 support the transition to sustainable energy systems, as measured by individual climate actions and public support for the development of more ambitious renewable energy targets—even at the expense of subsidies’ cuts for fossil fuels. The public attitudes are analyzed taking into account regional demographics and domestic energy policy context and contrasted with the wider EU public opinion trends. The findings suggest that the public opinion in the V4 quickly catches up with the rest of the EU in terms of support

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for renewable energy sources (RES), stronger energy efficiency measures, or the development of clean energy technologies at the expense of traditional energy branches. Moreover, specific geopolitical factors that made the V4 region more dependent on Russian energy resources serve as an additional trigger for this growing public support.

2

V4 Perceptions of Climate Change: General Trends

Public support for clean energy solutions is often linked not only to the various economic considerations, but also to the perceived sustainable character of the latter, which is seen as capable of meeting energy demand, environmental standards, and climate change mitigation targets alike. Hence, the very public perception of climate change and its source is key here—especially as far as the impact of human activity is concerned. When it comes to the EU as a whole, a Eurobarometer from November 2018 shows that a vast majority of Europeans (93%) believe that climate change is at least partially caused by human activity, among which more than half of the respondents believe that it is entirely due to human activity (European Commission 2018a). Such strong public conviction gives more “green light” to progressive energy solutions and further legitimizes sustainable energy transitions. In this respect, the Visegrad region, although often considered not entirely in line with the EU’s ambitious climate and energy agenda on the policy level, does not significantly deviate from the rest of the public opinion in the bloc. Although the citizens of V4 appear to be slightly more skeptical on average, close to 90% of Poles (87%), Slovaks (88%), Czechs (91%), and as high as 96% of Hungarians believe that climate change has been at least partially caused by human activity. However, as compared to the rest of the EU, a significantly lower percentage of the population in V4 considers anthropogenic causes to be a sole explanation. Only around one third of Czechs and Slovaks believe this to be the case, and an even lower percentage of the Poles (27%)—the lowest score across the EU28. Hungary is a clear outlier here and with 46% of the population believing

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that climate change is entirely due to human activity, it exceeds the EU average (42%). A higher percentage of skepticism regarding anthropogenic causes of climate change in V4 can have different explanations, but certainly partially owes to the fact that the general awareness of the issues of climate or environmental protection is still lower in CEE as compared with Western Europe. For instance, when asked in another Special Eurobarometer survey from 2017, what they consider to be the single most serious problem facing the world as a whole, the citizens of the V4 were less likely to point to climate change than an average European. 10% of Hungarians, 8% of Slovaks, and only 6% of Poles and Czechs would prioritize this issue, as compared to 12% across the EU (European Commission 2017b). The population of the Visegrad region also deviates from the wider European trends when it comes to placing the responsibility for tackling climate change (see Fig. 1). On average, European citizens consider themselves as well as other relevant bodies increasingly responsible for climate mitigation measures. In the years 2017–2019, placing the

Fig. 1 V4 population position on the responsibility for tackling climate change (2019) (Note The respondents were asked to react to the following statement: “In your opinion, who within the EU is responsible for tackling climate change?”. Source European Commission [2019])

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responsibility on oneself, the EU, the national governments, the regional authorities, business and industry, and the environmental groups have increased across the EU in all the categories, with the upward trend been the highest as far as business and personal responsibility are concerned (14 and 13% respectively) (European Commission 2017b, 2019). In this regard, the European public also tends to put the most responsibility on the national governments, followed by business and industry, and the least on the environmental groups. In comparison, citizens of the Visegrad states tend to see the business and industrial sector as most responsible for combating climate change, followed by national governments, while feeling least personally responsible. In 2017, except for Poland, where similarly to EU28 average (43%) 41% of Poles put most responsibility for climate protection measures on the national government, citizens of the V4 countries pointed to business and industry more often than the rest of the EU (56% of Slovaks, 55% of Czechs and 49% of Hungarians) with national governments being a second choice (European Commission 2017b). As of 2019, expectations towards business and industry remained stable in Czechia (55%), slightly increased in Slovakia (62%), recorded a major jump in Poland (from 28% in 2017 to 53% in 2019), and surprisingly dropped in Hungary (from nearly half in 2017 to 31% in 2019; European Commission 2017b, 2019). Simultaneously, and similar to other EU states, the citizens of the V4 increasingly put responsibility for climate change mitigation on their national governments. It is an upward trend across the region that oscillated between 44–59% in 2019 (as compared to EU”s 54%). On the other hand, public opinion in V4 is on average less likely than the rest of the EU to expect more climate action from the environmental groups and the EU itself as compared to other Europeans (37–42 and 48% in 2019, respectively). Crucially though, the citizens of the Visegrad states feel less personally responsible for tackling climate change than their European peers. Only 19% of Poles and 18% of Hungarians and Czechs felt personally responsible in 2019, as compared to 35% in the EU as a whole (European Commission 2019). These low numbers are particularly noteworthy, as they point to a lower mobilization of civil society in the Visegrad region, despite growing environmental awareness. However, similar to the EU,

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both the sense of personal responsibility and the pressure on other bodies to combat climate change are on the rise in V4. For instance, in 2017 only 12% of Poles, 13% of Hungarians, 17% of Czechs, and 19% of Slovaks felt individual responsibility for climate actions (as compared to 22% EU28 average). Overall, the above response patterns indicate that in the CEE region policy issues related to the energy–climate nexus are largely seen as a domain of the business and governmental sectors, rather than an area that requires deep market intervention or high societal involvement. Slovaks also stand out here, with one third of the respondents declaring feeling personally responsible for climate mitigation measures in 2019 (a significant increase from 19% in 2017) and a high level of the population putting further responsibility on all the relevant bodies (with 50% EU, 34% environmental groups, 62% business, 38% regional authorities, and 59% seeing national government as responsible). These numbers exceed the EU average and translate into a higher number of Slovaks recently declaring to undertake actions to actively fight climate change. Therefore, in 2019 a very high percentage of Slovaks, as well as Hungarians (65% for both), declared that they have taken some action to fight climate change over the past six months—a higher score than in the rest of the EU on average (61%) (European Commission 2019). In this respect, Czechs and Poles appeared less engaged in any pro-climate individual actions (only 46 and 40% respectively). Whereas in Slovakia, this trend reflects quickly rising societal awareness about the necessity to fight climate change at different governmental and economic levels—personal included, in Hungary it correlates with very high support for the development of clean energy technologies in general (see Table 1). The above figures for the Visegrad region also show an upward trend even for the least mobilized Poles. When asked whether they have taken any action to fight climate change over the past six months, Poles were also among the least likely national groups (together with Bulgarians and Romanians) to give a positive answer in 2017 (only 30%), and the majority of Poles (63%), as well as Czechs (58%), Slovaks (51%), and Hungarians (51%) declared that this was not the case (European Commission 2017b). Therefore, these numbers have improved significantly within just two years.

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Table 1 Attitudes of V4 population to energy efficiency measures 2017 and 2019 (in %) Regularly use environmentally friendly alternatives to private car e.g. walking, cycling, public transport When buying a new household appliance lower energy consumption important factor Have insulated your home better to reduce energy consumption Have bought a new car and its low fuel consumption was an important factor Have installed equipment in your home to control/reduce energy consumption (e.g. smart meter) Have switched to an energy supplier which offers a greater share of energy from renewable sources Have installed solar panels in your home

EU28

CZ

HU

PL

SK

26/35

21/29

12/21

13/16

18/27

37/50

41/53

37/45

26/38

30/35

18/26

19/25

14/22

10/16

14/26

9/12

8/11

4/8

3/5

4/6

8/15

6/10

4/8

5/8

4/7

7/10

5/5

3/5

1/3

2/4

4/6

3/5

1/5

1/3

1/3

Note 2019 in bold Source European Commission (2017a, 2019)

General statements aside, when it comes to concrete individual actions to combat climate change the V4 population, although still lagging behind the EU average, is quickly catching up with the wider trends, especially when it comes to implementing energy efficiency measures. The comparative data from 2017 and 2019 indicate that Czechs, Hungarians, Poles, and Slovaks have become particularly active when it comes to insulating their homes, installing home equipment to control energy consumption, or buying energy efficient household appliances (see Table 1). On the other hand, citizens of the V4 tend to use environmentally friendly alternatives to private cars or buy more efficient cars to a significantly lower degree than their European peers. Moreover, switching to an energy supplier that offers a greater share of energy from renewable sources or installing solar panels is still less popular in the Visegrad region, as compared with the EU as a whole. Lower answers here might do though with a mix of economic considerations (high

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costs), lower availability of clean electricity suppliers, and not always favorable domestic regulations for the installation of small-scale RES. Given that the citizens of the Visegrad region tend to do better when it comes to actions that aim at cost-saving, and worse as far as investments in, e.g. electricity from RES is concerned, partially owes to their overall lower level of affluence as compared to Western Europe. Overall, though, the trends are upwards and reflect earlier levels of self-declared actions to fight climate change—with Poles being the least active.

3

Supporting the Transition to Clean Energy Technologies in V4: General Trends

When it comes to public support for the development of RES in the Visegrad region, it has been relatively strong and growing despite some fluctuations over the years. One of the first Eurobarometers on energy technologies, conducted two and a half years after Visegrad states’ accession to the EU in 2004, illustrated very high support for RES among their populations. In a 2006 poll, the majority of respondents from Czechia, Hungary, Poland, and Slovakia were all strongly in favor of the use of solar energy (close to 80% in Slovakia and over 80% in the other Visegrad states), as well as wind energy (between 74 and 82% of the population) in their country (European Commission 2007). In both cases, attitudes in V4 closely reflected average views held elsewhere in the EU (80% of respondents regarding both survey questions). Similarly, the 2006 public opinion in V4 fits into the wider EU25 wide pattern when it comes to supporting the development of biomass and hydroelectric energy (the EU average of those in favor is 55 and 65%, respectively). There was a high number of Czechs and Slovaks in favor of hydroelectric energy (85 and 80% respectively) as well as biomass energy (67 and 71% respectively), while Hungarians and Poles were slightly less in favor of the development of both energy sources (59 and 58% for biomass, 43 and 61% for hydro-energy respectively) (Ibid.).

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What differentiated the population of the CEE region from the wider EU views in 2006 though, was its lower willingness to pay more for energy produced from RES than for energy produced from other sources. Only one in four respondents in Czechia, Hungary, and Poland as well as close to one fifth of the Slovaks answered positively at the time, as compared to 34% of EU25 average (European Commission 2006). Such vast discrepancies could be explained by the more difficult economic situation, higher unemployment rates, and lower purchasing power of the new member states, as opposed to the old members. Indeed, the highest scores occurred among the richest EU25 at the time (52% in Denmark, 51% in Luxembourg, and 48% in the UK) (Ibid.). Although the Special Eurobarometer study on “Energy Issues” from 2006 argued that the results for the CEE region show “a lack of environmental or energyrelated awareness, which could hamper, in these countries, a positive change towards renewable energy despite a favorable economic context” (European Commission 2006, p. 13), the public opinion trends in later years look rather optimistic, as the support for the development of RES is growing even in cases of the unfavorable domestic energy policy context. Therefore, when asked in the subsequent years whether their national governments should set ambitious targets to increase the amount of renewable energy used by 2030, the respondents from the V4 have overwhelmingly expressed their support. This question has been asked in the Eurobarometer studies every two years since 2013, and despite some fluctuations over time, public support for such targets has never dropped below 64% in the entire Visegrad region (see Fig. 2). Hungarians stand out as the most pro-renewables, with the vast number of respondents (83%) favoring a more ambitious RES policy since 2013. Such an attitude was shared by 93% of the Hungarian respondents in 2019. In comparison, Czechs and Poles seemingly lend less importance to this issue with roughly 70% of them consistently considering setting more ambitious targets for renewable energy to be either “very” or “fairly” important. A look at the wider regional trends also suggests that Czechs, Hungarians, Poles, and Slovaks became slightly less supportive of further development of RES between 2013 and 2017. In Czechia and Slovakia this trend coincided with problems in the domestic renewable energy sector.

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Fig. 2 V4 population position on the importance of renewable energy use (Note The respondents were asked to react to the following statement: “In your opinion, how important do you think it is that the government sets ambitious targets to increase the amount of renewable energy used, such as wind or solar power, by 2030?”. DK—“Don’t know”. Source European Commission [2013, 2015, 2017a, 2019])

In the case of Czechia the government’s financial support for numerous solar projects created a tremendous financial burden on the population, which, in turn, may have had an impact on the diminishing public support for RES (Pr˚uša et al. 2013; Luˇnáˇcková et al. 2017). In Slovakia, the feed-in tariffs scheme has similarly resulted in higher electricity prices for end consumers (Janda 2018). However, in both cases, the renewable energy sector started to slowly pick up in recent years, with the Slovak government trying to modernize the support schemes more in line with market principles, and with the Czech market becoming more predictable and seeing the growth of small RES installations since 2018—partly due to some new support schemes (e.g. New Green Savings program; Liptáková 2018; Sedlák 2019). These developments have been reflected in the public opinion trends, with the number of supporters of a more ambitious policy on RES being on the rise again in both countries as of 2019. However, Czechs remain still slightly more skeptical of such developments now, as compared with the years 2013–2015, and every one in four of them declared in 2019 that setting ambitious targets for the development of renewable energy is not important (with

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16% considering it “not very important” and further 9% as “not at all important”; see Fig. 2). Overall, though, the public support for clean energy technologies is on the rise in the V4 states, even when such transition would imply the necessity of cutting subsidies for fossil fuels. As measured by the Eurobarometer data from 2017–2019, the percentage of Czechs, Hungarians, Poles, and Slovaks who agree that more public financial support should be given to the transition to clean energies even if it implied cutting funding for fossil fuels, has been steadily growing (see Fig. 3). Although the numbers are significantly lower here, as compared to the declared support for setting the higher targets for the use of RES only, the majority of the V4 respondents supported such measures in 2019. The support rate grew at the slowest pace in Czechia and Poland, with Czech respondents appearing to be even less convinced of such a policy approach than their Polish counterparts (52 and 63% in 2019, respectively), despite Poland’s high coal reserves. This mirrors a wider trend of Czech skepticism regarding the development of RES. Similarly, in line with earlier declarations, Hungarians appear to be the most in favor of subsidizing clean energy technologies, even at the expense of the

Fig. 3 V4 population position on public financial support for the transition to clean energy (Note The respondents were asked to what extent they agree or disagree with the following statement: “More public financial support should be given to the transition to clean energies even if it means subsidies to fossil fuels should be reduced”. DK—“Don’t know”. Source European Commission [2017a, 2018a, 2019])

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reduction of fossil fuel subsidies. As of 2019 a high three-fourths of the Hungarian respondents declared such views. Despite these upward trends, the V4 respondents do not support the transition to clean energy in numbers as high as the EU average. Whereas a stable 50% of the EU respondents for the period 2013–2019 considered setting higher targets for RES as very important, followed by close to 40% who thought that they are fairly important, this trend has been somewhat reversed in the V4 (European Commission 2013, 2015, 2017a, 2019). Namely, an average number of respondents across the region who expressed strong support for this policy approach has oscillated around 50% in the same period, and (except for Hungary) was followed by a further 14–22% who saw it as very important. Public opinion in Czechia, Poland, and Slovakia similarly lags behind the rest of the EU when it comes to supporting RES at the expense of the funding of fossil fuels. Although this trend is growing in the entire Visegrad region, and the number of respondents who tend to agree with the necessity of such a policy approach is similar to the wider EU trends (between 39 and 47% in the Visegrad states, as compared to close to 40% in the EU who “tend to agree”), the number of citizens in V4 who are strongly convinced about such measures is significantly lower (European Commission 2017a, 2018b, 2019). In 2019 only 13% of Czechs, 16% of Poles, and 17% of Slovaks expressed such views. Hungary is an exception here, as by 2019 Hungarian public opinion had caught up with the EU average as far as the support for the transition to clean energy at the expense of reduction of subsidies for fossil fuels is concerned (with one third expressing strong support, and nearly 40% moderate support for such policy approach in both cases). Therefore, although the overall support for the transition to clean energy technologies is on the rise in the V4, with the majority of the respondents considering it important, the strength of that support is still lower as compared to the EU as a whole. Because public opinion fluctuates slightly year by year for each country it is hard to predict future regional trends. However, the possibility of the rest of the V4 catching up with the wider European public remains open in instances where a high percentage of respondents do not yet have an opinion on the issue. For instance, a considerably high percentage of Slovaks (from 11% in 2013

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to 12% in 2019), and a growing percentage of Poles (from 12% in 2013 to 16–17% in the years 2017–2019) fell into the “I don’t know” category when asked about setting ambitious targets for RES by 2030 (see Fig. 2). Whereas in Slovakia this indecisiveness could partially owe to domestic problems with earlier RES regulations, in Poland, an insufficient public debate on the clean energy technologies is a contributing factor, as the government of Law and Justice party that has been in office since 2015 favors other energy sources in the national energy mix (e.g. gas, coal, and the envisioned nuclear energy program; Ministry of Energy 2019). Moreover, the public opinion data illustrates that linking the issue of support for RES with cutting funds for the fossil fuel sector adds complexity to the respondents’ considerations. Except for Hungary, a significant part of the population in the V4 (ranging from one fourth to nearly one third in 2019) does not have any opinion on this policy (see Fig. 3). This is a significantly higher number of the “don’t know” responses as compared to the declared support for the development of RES only and could be explained by several factors. First, although the regional awareness about anthropocentric climate change is high and reflected in growing support for the development of more RES in principle, the potential trade-offs between subsidizing clean energy or fossil fuels are not sufficiently discussed and understood by the wider public. Second, the nuances of different energy policy approaches are not of interest to many citizens, as the population in the V4 remains less mobilized by the topics that relate to clean energy or the environment, as compared to its Western neighbours, such as Germany. Third, there might be a regional variation in what is considered as “clean energy,” especially when it comes to the development of clean coal technologies. For instance, this topic has been widely discussed in Poland in recent years, with the government promoting the idea of Poland becoming a leader of clean coal technologies in the EU (Senat Rzeczypospolitej Polskiej 2017). Following a decades-old doctrine “Poland stands on coal” (Polska w˛eglem stoi; Kuchler and Bridge 2018), when faced with the EU climate change mitigation measures the Polish authorities opt rather for the modernization of the existing coal sector rather than emphasizing the development of RES.

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Having said that, the official pro-coal governmental energy policy does not mean that Poles are either strong supporters of the traditional coal sector per se or prefer traditional coal-burning to RES. On the contrary, looking at the disaggregated data for Poland, it appears that the majority of the coal-rich regions (e.g. Lubelskie, Łódzkie, Wielkopolskie, ´ askie) are among the most supportive of the development of RES in Sl˛ ´ askie) the country, with some regions (e.g. Lubelskie, Wielkopolskie, Sl˛ scoring even higher than the national average (European Commission 2019). It might be then the case, that despite the issue of employment being at stake for part of the local population employed in the coal sector, the remaining respondents are more motivated by concerns such as air quality, health, or the protection of the local landscape and environment, especially since the support for more ambitious policy on RES in those particular areas does not change once the question is linked to cutting subsidies on fossil fuels. When asked in 2018 whether more public support should be given to the transition to clean energies even at the expense of subsidizing fossil fuels, the individuals from the coal-rich regions (Łódzkie, Wielkopolskie, Lubelskie) were among the most supportive respondents (70–80%) as compared to other regions (40–70%; European Commission 2018b). Therefore, given the favorable economic situation and domestic legislative framework, it is likely that the support for RES will continue to grow in Poland and that many of the undecided respondents could be swayed to support more ambitious RES targets in the near future, even at the expense of the more traditional energy branches. This possibility applies also to other V4 states, especially that some unique regional dynamic, such as high import dependency on Russia, serves as another factor of increasing support for clean energy technology. For instance, an opinion poll conducted in V4 in 2014 by IPSOS (Institut de Publique Sondage d’Opinion Secteur) market research firm explored how the development of RES and energy efficiency measures is seen as diminishing the perceived overdependence on Russian energy sources in the region (IPSOS 2014). Whereas the dependence on energy imports from Russia was perceived as a problem by more than three fourth of the respondents in the V4 countries, this opinion was the strongest in Poland, with 88% of such responses, followed by 79% of

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Hungarians, 70% of Slovaks, and 65% of Czechs (Ibid.). Consequently, developing RES would lower dependence on import of energy sources according to 80% of the population in the V4 countries, with overall 42% of the respondents stating that “surely it will lead to a reduction of our dependence” and further 38% that “likely it will lead to a reduction of our dependence” (Ibid., p. 6). This opinion was held by the vast majority of Poles (88%), 76% of Hungarians, 71% of Slovaks, and 59% of Czechs (see Fig. 4). Such high regional responses to both questions indicate that energy import dependence on Russia is a strong factor in the increasing support for the clean energy technologies that can be developed domestically in V4 states. Respondents in Poland and Hungary have been the most ardent supporters of this approach since 2014. However, the anti-Russian sentiment of Poles that permeates also the energy policy approach is a long-term trend. As such, it has been previously reflected in the domestic public opinion that feared the economic and political threat from Russia in the aftermath of the Russian gas cut-offs to Ukraine in 2006 or conflicts in the Eastern neighbourhood in the states that have been considered by Poland as the potential alternative transit routes (Ukraine

Fig. 4 V4 population position on the impact of renewables on energy import dependency (Note The respondents were asked to react to the following statement: “Greater production of energy from renewables would decrease our dependence on import of energy sources [oil, gas, coal, uranium] from countries outside of the EU”. DK—“Don’t know”. Source IPSOS [2014])

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in 2004 and Georgia in 2008; Institute of Public Affairs 2008). These negative attitudes prevailed also in the following years. The domestic studies of public opinion that measure Polish attitudes towards different nations revealed that in the years 2014–2020 only 20–31% of them declared sympathy for Russia, while the negative attitudes oscillated between 42–50%, reaching 50% high in the aftermath of the RussianUkrainian war in 2014 (Public Opinion Research Center 2020). These anti-Russian sentiments have been reflected on the policy level and informed different diversification plans that aimed at finding alternatives to Russian energy sources introduced by the subsequent cabinets over the years. Among the projects considered were various diversification routes from Denmark, Norway, Germany, Central Asia, Ukraine, linking Poland to the Nabucco pipeline or the building of the LNG terminal (Fischer 2008; Ruszel and Podmiotko 2019). Although many of these proposals lacked consistency and proved to be ineffective in the ´ long run, Poland eventually built the LNG terminal in Swinouj´ scie in 2015 (Radio Poland 2015) and became part of the Baltic Pipe project that is scheduled to deliver Norwegian gas to Poland via Denmark from 2022 (Pipelines International 2019). In this sense, the RES sector constitutes still a largely unexplored area of increasing Poland’s energy independence from Russia. When it comes to Hungary, the public concerns of the country’s import dependency partially explain why Hungary has stood out among the V4 with its much higher than average public support for RES over the years. The IPSOS study from 2014 showed that every one in five Hungarians considered energy import dependency on Russia as a problem, while three fourths of the respondents thought that the development of RES could lower that dependency. These numbers were lower than in Poland and correlated with the general lower perception of threat from Russia at the time. A Central European Opinion Research Group (CEORG) survey conducted the same year revealed that as compared to 66% of Poles only 41% of Hungarians feared that Russia will seek to increase its influence in Eastern Europe in 2014 (TÁRKI 2014). This lower skepticism is a part of the wider trend, as the governments of both Ferenc Gyurcsány and Viktor Orbán emphasized the importance of pragmatic economic cooperation with Russia

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(Krekó 2019a), and the Hungarian attitudes towards Russia have been steadily improving since 2006 (Szvák 2016). Meanwhile, the Hungarian government undertook some steps toward a high energy dependency on Russia. Despite different gas diversification attempts (e.g. bidirectional interconnectors with Slovakia, Croatia, and Romania) Hungary has remained heavily dependent on Russian oil and gas. The country has been an advocate of the expansion of the Russian pipelines into Europe, and is additionally tied to Russia through Rosatom’s involvement in the development of the Hungarian Paks 2 nuclear power plant (Harper 2018). As compared to Poland, Hungary also does not have significant coal reserves. All these factors contribute to domestic public concerns about import dependency, especially that the overall sympathy for Russia is still not a prevailing one, albeit growing. The 2018 Median poll showed that only one third of Hungarians were clearly pro-Russian, with only 26% naming Russia as the country Hungary should get closer to, as opposed to 76% who wanted closer ties with the EU (Magyari 2018). Russia was also seen as the least favored among the six powers covered in the survey (UK, Germany, France, China, US, Russia)— the only one getting below 50 points (48) on a 100 point sympathy scale (Ibid.). Therefore, despite the image of Russia improving among the Hungarian population, the public attitudes are still marked by a high level of skepticism that fuels domestic support for the policy solutions that could diminish Russian influence. This also partially explains why, as opposed to Czechia or Slovakia, where the complicated domestic policy on RES led to some fluctuations of public opinion over the years, Hungarians appear to be consistently in favor of more ambitious targets for RES in the domestic energy mix, which would decrease the country’s import dependency. Especially, that unlike its northern neighbours, the Hungarian domestic renewable energy sector has not experienced any major scandals or setbacks in recent years. The public opinion trends discussed above shed light on the overall V4 dynamic, as far as the citizens’ support for the development of RES is concerned. The next section will look at these patterns in greater detail, taking into account regional demographics.

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Supporting the Transition to Clean Energy Technologies in V4: Demographics

General public opinion trends aside, the support for the transition to clean energy technologies in the Visegrad region varies among different demographic groups. Whereas gender or employment status do not show much variation in public opinion, more fluctuations occur along the lines of age demographics, the rural–urban divide, and the declared left–right wing orientation of the respondents. To start with, there is not much difference among different employment categories in the Visegrad states. The respondents in all three categories, “self-employed,” “employed,” and “unemployed,” favor the development of energy sources such as solar or wind, to a similar degree in each country respectively. Hence, the unemployed are, at least in principle, as much in support of such policy move as the rest of the population in the V4—and this trend has not changed since 2013 (European Commission 2013, 2019). This is rather surprising, although the key question not included in the Eurobarometer data that remains unanswered is to what extent different employment groups in the region would be willing to pay for energy from different energy sources. When it comes to the declared support for such measures in principle, Hungary has the lowest percentage of respondents who consider setting ambitious targets for renewable energy by 2030 as not important across all the employment groups (less than 4%), while Czechia has the highest (5–12%) as of 2019, which mirrors country-wide trends over the years. The same opinion patterns occur once the question of more ambitious targets for RES is linked to the limiting financing for fossil fuels. The Eurobarometer data from the surveys shows that the support for the development of RES at the expense of the fossil fuel sector has increased most among the self-employed respondents in the Visegrad region in the observed period (European Commission 2017a, 2019). In this respect, Hungary is a country with the fastest-growing number of strong supporters of such energy policy across all the employment

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groups, but especially among the self-employed (from over 45% in 2017 to close to 70% in 2019). Crucially, the comparative data from 2015 and 2019 illustrate that the support for a more efficient policy on RES has been growing among the voters of all political spectrums across the V4. (European Commission 2015, 2019) However, there is no clear pattern in the left–right wing divide and the degree of support for RES in the four countries (see Figs. 5 and 6). Whereas higher targets for energy from wind or solar in 2019 have the highest support among the left-wing voters in Poland, the same applies to right-wing voters in Slovakia and Hungary, as well as those who define their political views as centrist in Czechia. Given the overall 80%-plus support for such policy across all the voters’ categories, the differences are not high here though. The most vivid pattern in this demographic category across the V4 region are fluctuations among those who declare the strongest support for the more ambitious policy measures on RES. In this regard, the

Fig. 5 V4 population position on the importance of renewable energy use by ideology in 2019 (Note The respondents were asked to react to the following statement: “In your opinion, how important do you think it is that the government sets ambitious targets to increase the amount of renewable energy used, such as wind or solar power, by 2030?”. DK—“Don’t know”. Source European Commission [2019])

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Fig. 6 V4 population position on the importance of renewable energy use by ideology in 2015 (Note The respondents were asked to react to the following statement: “In your opinion, how important do you think it is that the government sets ambitious targets to increase the amount of renewable energy used, such as wind or solar power, by 2030?”. DK—“Don’t know”. Source European Commission [2015])

largest changes between 2015 and 2019 occurred among the left-wing voters in Poland and the right-wing voters in Hungary. In Poland, a number of the declared left-wing voters who consider setting higher targets for RES as “very important” has sharply increased from 30% in 2015 to 54% in 2019. At the same time, a strong support for such measures among the declared right-wing voters in Hungary has dropped from over 60% in 2015 to just over 45% in 2019. In the Polish case, the preference for green energy solutions has been associated with leftist political views over the years and connected to the domestic circles of “green” actors who put forward alternative energy policy scenarios centered on stronger energy efficiency measures and the development of clean energy technologies (Greenpeace 2013; Bukowski 2013)—as opposed to the governmental strategies putting a strong emphasis on the coal sector and the development of nuclear energy (Ministry of Energy 2014). In this sense, the rapid growth of stronger support for RES among the respondents with the leftist political views coincides with the return to power of the right-wing Law and Justice Party in 2015, which favors traditional energy sources. As such, it could be a sign of growing opposition to the mainstream energy policy in the country in this particular demographic group.

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The Hungarian case appears more puzzling considering that the rightwing Fidesz has dominated the Hungarian political landscape since 2010. The decline of strong support for the development of RES among the right-wing voters could have a couple of explanations. First, given the Fidesz party’s strong pro-Russian orientation that has been particularly visible in the growing links between the two countries in the energy sector in recent years (oil, gas, and nuclear), could have translated into a higher support for the traditional energy sources among its voters, and consequently, a slightly lower enthusiasm for the ambitious policy on RES. Indeed, the 2018 Median poll that measured Hungarian attitudes toward Russia shows that Fidesz voters, as opposed to the majority of the Hungarian public, hold mostly positive views of Russia, trust Moscow more than Washington, and prefer a closer relationship with Russia than with the US (Magyari 2018). It could be argued that the voter base of the Fidesz party has been swayed over the years to support the pro-Russian governmental stance regarding energy policy. Second, as the Eurobarometer surveys do not ask the respondents about their support for concrete political parties, but rather about their self-identification along the rightwing political spectrum, the apparent change in the public opinion patterns among the right-wing and centrist voters could be partially caused by some voters changing political self-identification. Whereas this dynamic is not confined to Hungary, with voters shifting their political sympathies in all countries studied, it is a particularly valid explanation of recent public opinion shifts. Namely, the Hungarian Jobbik party started to move from the far right to the political center to attract more voters since 2015 (Thorpe 2015). Although Jobbik’s environmentalism has never particularly been tangible, the promotion of RES has always been a part of its political program (Kepli 2020). As Kyriazi (2019, pp. 198–199) noted: Nationalism ideology and environmentalist intersect in numerous ways, so much so that the Hungarian far-right has claimed to be the only “true” environmentalists. Indeed, the protection of nature and the environment as the physical manifestation of the “homeland” has been a part of Jobbik’s program from the start, addressing a wide array of issues, from the sale of land to foreigners, to renewable energy and endangered species.

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Jobbik’s shift to the center could have then also contributed to the lower numbers of strong support for renewable energy among the self-declared “right-wing” voters. When it comes to the urban–rural divide and support for the development of RES, the respondents from the rural areas, towns, and cities across the Visegrad region tend to support such policy in numbers close to their national average (see Fig. 7). The comparative Eurobarometer data from the years 2013 and 2019 also indicates certain shifts (European Commission 2013, 2019). In Hungary, the percentage of people who consider developing more wind or solar as very important has slightly increased in the rural areas (from 50% in 2013 to 56% in 2019), but simultaneously dropped in the large towns (from over 65% in 2013 to less than a half of the respondents in 2019). The growing support for RES in the Hungarian countryside could be attributed to regional (e.g. the EU funded program Promote the Sustainable Use of Renewable Resources and Energy Efficiency in Rural Regions (Interreg

Fig. 7 V4 population position on the importance of renewable energy use by community (Note The respondents were asked to react to the following statement: “In your opinion, how important do you think it is that the government sets ambitious targets to increase the amount of renewable energy used, such as wind or solar power, by 2030?”. DK—“Don’t know”. Source European Commission [2019])

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Central Europe 2017) and local schemes (Clover 2017; Bellini 2018) aimed at farmers and landowners to facilitate the development of local energy projects such as solar farms or smaller photovoltaics (PV) installations. Such installations in the underdeveloped areas often provide the local municipalities and townships with additional tax money that can be reinvested locally. On the other hand, the apparent decline in support for the development of renewable energy in the Hungarian towns might reflect higher political support for the opposition parties. This growing support was best visible in the recent 2019 local elections in Hungary, where the opposition won Budapest and triumphed in ten out of Hungary’s twenty-three big cities (Krekó 2019b). As the projects in PV are often developed with the involvement of Prime Minister Victor Orban’s closest circle, the general public concerns of corruption that have been surrounding it in recent years (Gorondi 2019) could have additionally weighed on the big-city opposition voters’ perception of the new initiatives in RES. The regional trends show that a strong support for RES in Czechia similarly increased in the rural areas, with respondents who consider the development of more ambitious RES targets as very important increasing there from one third in 2013 to nearly half in 2019. Given the general Czech skepticism caused by the earlier over-generous support schemes for large photovoltaic farms and the resulting high electricity prices, this shift may look rather surprising. As recently as in 2016 taking advantage of the EU funding from the Rural Development Program to develop RES such as biogas in the Czech rural areas was considered a big challenge by the local authorities, due to a bad reputation of RES in the country (Vitásek and Bednárová 2016). Hence, the fact that public support for RES is picking up at greater speed in the Czech countryside than in urban areas, might signal better investment environment for the countryside projects in RES in the near future. Especially that Czech cities consistently stand out as the bulwark of skeptics on the development of RES in the entire Visegrad region (between 7–9% since 2013). Unsurprisingly, the strongest support for the development of solar or wind energy projects originates from the younger respondents. In Hungary and Poland, the strongest support was among the 15–24-yearolds in 2019, whereas in Slovakia and Czechia it was in the 25–34

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age group (as measured the percentage of respondents who consider the development of a more ambitious policy on RES as very important). According to this indicator, young Hungarians especially stand out in the V4 region, with well over 60% of the supporters (and further one third of respondents supporting it) in 2019. It also worth noting that despite Czechs’ higher skepticism regarding renewable energy policy developments, strong support for high RES targets among Czechs aged 15–64 has remained stable or grew in 2019 as compared to 2013 (although a number of respondents who expressed moderate support for ambitious RES policy has dropped by a few percentage points across these categories at the same time). It could be then said that those who were strongly convinced of the necessity of such measures remained so—even given domestic difficulties in the solar energy sector. Although strong support for higher targets for renewable energy tends to slightly drop in the entire region among the 65+ years old, it remains as high and close as the country-average (especially in Czechia and Hungary). Therefore, the older generation is, at least in principle, as supportive of further development of clean energy technologies as other age groups. Especially that similar opinion patterns occur once the issue of support for RES development is linked to cutting down the subsidies on fossil fuels. In the years 2017–2019, citizens of the V4 aged 65 or more closely followed the younger generations in their support for such policy choices. Moreover, Hungarian seniors were the most supportive of such measures among all the age groups in the V4 in 2019 (close to 60% considered such policy moves as very important). Arguably, the still-living memory of historical events in CEE among the older generation coupled with the increasingly pro-Russian policy of Fidesz that increased Hungary’s energy sector dependence on Russia in recent years could play a role here. Lastly, there is no difference in responses based on gender across the Visegrad region. Respondents in all four countries exhibit the same patterns between 2013 and 2019, with a nearly equal number of men and women attaching various degrees of importance to setting more ambitious targets for wind or solar energy in the national energy mix by 2030.

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Conclusion

To conclude, public opinion in the V4, although not as progressive in its attitudes to sustainable energy solutions as Europeans on average, has been quickly catching up with the wider EU trends. The analysis of the Eurobarometer data in this chapter depicted several key trends. First and most important, the citizens of the V4 have been overwhelmingly supportive of more ambitious renewable energy targets to be set by their national governments by 2030. Although that support was not as high as the EU average, it oscillated between 64 to 93% since 2013, with a clear upward trend across all four countries. Moreover, Czechs, Hungarians, Poles and Slovaks all increasingly favor the development of clean energy technologies, even at the expense of cutting the subsidies for fossil fuels. This dynamic occurs even in the coal-rich Poland, with coal regions being among the most pro-renewables in the country (70– 80% as of 2018), which likely owes to the local concerns regarding the air quality, health, or the protection of the landscape and environment. Second, while the support for the development of renewable technologies is on the rise, some general regional differences over the years could be largely attributed to the specific national energy policy contexts. In this respect, a higher skepticism of Czechs and Slovaks concerning the development of clean energy sources owes to the domestic policy wrongdoings in the RES sector that had a negative impact on the image of renewable energy projects in both countries. On the contrary, extremely high support for RES among Hungarians could be attributed to a relative lack of scandals or setbacks connected to renewable energy in Hungary in recent years, as well as an overall growing dependence on Russia in the domestic energy sector that constitutes a concern to the majority of the Hungarian population, as evident by the domestic opinion polls on attitudes to Russia. Third, the in-depth analysis also illustrated some fluctuations in support for the development of clean energy technologies among different demographic groups. The main differences occurred in different age demographics, along the rural–urban divide as well as the declared left–right wing orientation. However, no clear regional patterns occurred here, but rather country-specific differences could be often explained by

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domestic factors, such as local or national election outcomes that at times served as a trigger for changing public considerations concerning energy policy approach. Given these overall upward trends, it could be then said that a key obstacle to a societal involvement in the sustainable energy transitions in the V4 is not so much low public awareness about the issues of climate and energy, but rather lower social mobilization of the societies. The analysis illustrated that although the citizens of V4 consider human activity as a sole explanation of climate change in lower numbers than Europeans on average, they agree that it is a contributing factor—with 88% of Slovaks, 87% of Poles, 91% of Czechs, and 96% of Hungarians holding such views (European Commission 2018a). Despite this, citizens of the V4 feel less personally responsible for tackling climaterelated energy issues than their European peers with less than one in five of respondents in Czechia, Hungary, and Poland declaring so in 2019, as compared to 35% across the EU (European Commission 2019). Although these trends are upwards since 2017, particularly with the population of Slovakia increasingly acknowledging the need for increased responsibility for climate actions at all levels of authority, this factor remains a key difference between the population of V4 and their Western counterparts and contributes to a slower rate of sustainable energy transitions with a societal involvement in the V4. Having said that, the citizens of V4 tend to do better when it comes to supporting progressive energy solutions that are most cost-saving for the users (e.g. insulating their homes), while lag behind their Western peers as far as more costly actions are concerned (e.g. the installation of solar panels, or paying more for energy from renewable sources). Therefore, given the general upward public opinion trends, the potential for growing public support for sustainable energy transitions in the V4 region looks rather optimistic and will continue to depend on the overall level of affluence of the citizens, as well as favorable economic and regulatory policy context.

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6 Structural Changes in the Baltics and the Russian Presence: Ramifications for the Region’s Energy Future Martin Jirusˇ ek and Tomásˇ Vlcˇ ek

1

Introduction

The Baltic States have been facing energy-related issues similar to those present in other states in Central and Eastern Europe (CEE) after the fall of the Iron Curtain, connected to energy transition and challenges stemming from tackling the environmental impact of human activities. At the same time, comparably to other post-communist countries, the Baltic States have been dealing with the heritage of former economic orientation to the Soviet Union. However, in their case, this issue has always seemed to be even more imminent. Unlike the southern members of the CEE region, the Baltic States have the historical experience of M. Jirušek (B) · T. Vlˇcek Department of International Relations and European Studies, International Institute of Political Science, Masaryk University, Brno, Czech Republic e-mail: [email protected] T. Vlˇcek e-mail: [email protected] © The Author(s) 2021 M. Mišík and V. Oravcová (eds.), From Economic to Energy Transition, Energy, Climate and the Environment, https://doi.org/10.1007/978-3-030-55085-1_6

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being directly integrated into the former Soviet Union. As such, they were not only dependent on energy supplies from the Soviet Union but were also an integral part of the communist hegemon, seemingly inseparably connected to the Russian mainland. This was very much the case in terms of energy supplies. All three former Soviet republics were getting their entire oil and gas imports from the East. Also, their electricity grid had been synchronized with that of the Soviet Union and remains so even today. As much as this has not been a unique feature, since it has been common also in other former Soviet republics that are now independent, it remains to be one of the most pressing issues of the energy sector in the Baltics. Similarly to other former Soviet republics and satellites, economies of the Baltics have been typical for their higher energy intensity compared to Western Europe. This trait stems out of the postSecond World War development and the subsequent industrialization led by Soviet economic models. Although the share of industry may not be as prevalent as in some other countries of the former Soviet Bloc, the relatively higher energy intensity persists (Eurostat 2018; Misiunas and Taagepera 1993). In this chapter we analyse the energy sector of the Baltic States, the main determinants for its development, and challenges it has faced. The underlying idea of this chapter to is to provide a complex insight into the energy situation in the Baltics, with a regard to the main influencing factors. Therefore, the text deals with the historical development, relations to Russia as an over-arching issue in the region, and ramifications for the countries’ respective policies. We explain how relations with Russia constitute the predominant issue in the energy sector, with consequences even for the energy transition and the interconnected process of European integration, mainly in the electricity and natural gas sectors. First, the basic characteristics of the region are offered, providing a basis for understanding the main challenges. Second, analysis of energy-related issues, ongoing and planned projects within the region with regard to the region’s energy security concerns are provided. Last but not least, the text elaborates on the states’ attitudes towards the European Union (EU) transition and climate goals in light of the geopolitical reality of the region. The authors believe that understanding the region in its complexity regarding its past and, especially, intricate relations with Russia is crucial with a view on the future goals set for the region.

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The Baltic States: Settings and Main Drivers

Understandably, the economic setting of the former Eastern Bloc had significant consequences for the period after Communism crumbled. In the following years, the former centrally planned economies proved to be structurally unfit for the competitive environment and faced structural problems resulting in the need for substantial changes needed for the transition to a market-based economy. On one hand, these countries could offer a relatively cheap and skilled workforce, on the other, their economies have been prone to fluctuations in global economy. Furthermore, and in light of the later development, the energy-intensive economic structure proved to be a major hindering issue in the process of energy transition. Although the Baltic States were partly specific in that they were torchbearers in production of communication technologies and computing, a sphere which in the Eastern Bloc was chronically underdeveloped, they have been suffering from the same issue of high energy intensity as other post-communist European countries. In fact even now, all three countries assume a place among the top ten most energy-intensive countries of the EU (Eurostat 2018). However, it was not the environmental impacts of the carbonintensive economy but the import dependency that proved to be the most influential factor behind the major changes in the Baltic countries’ energy sector in the past three decades. More specifically, dependence on the Russian Federation has been the major concern. In this sense, the perceived danger of being dependent on Russian energy supplies has been an integral part of the predominating narrative of domestic as well as foreign policies and politics of all three Baltic States. The supply-related concerns have been thus part of the broader narrative of Russia as an external threat, potentially undermining the region´s independence by all sorts of measures. This is not to say that the energy transition and related challenges have not been important or that these factors have not spurred any significant changes in the Baltics. In fact, as shown further, the energy mix of the Baltics has marked some substantial changes. However, on the policy level, the energy transition and climate

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issues have been rather secondary to the dependence- and security-related concerns. Therefore, from the viewpoint of this chapter, the important sources of concern of the Baltic States are essentially twofold. The first one is politically-historic, entailing, as noted above, the experience of being oppressed by the Communist regime and being part of the Soviet Union. Combined with the fact that a significant minority of ethnic Russians live in the Baltics, the fear of Russian revisionism, recently also in light of the Crimea annexation, has been palpable in the Baltics states (BBC 2015). This source of concern is also intertwined with the states’ perception of their position in Europe. As such, the experience of pre- and post-Second World War occupation and oppression has been among the main driving principles of these states’ foreign policies, mainly in terms of their efforts to join the EU and NATO. The latter appeared particularly sensitive as Russia made clear from the secession of the three Baltic States that their potential membership in NATO is unacceptable (Molek 2002). The second source of concern is related specifically to the dependence on Russia in individual energy sectors, which is especially significant for this chapter. It is fair to say that these concerns are not unsubstantiated as the Baltic States have a rich history of experiencing supply disruptions of oil and gas supplies likely caused by wilful manipulations from the Russian side (Collins 2017). However, none of these two can be perceived separately, nor they can be analysed without taking the other into account. Historically, the Baltic States became subjected to the aggression of outer forces several times. Before, during, and after the Second World War they fell victim to both German and Soviet expansionism and, as a result of the Soviet push to the West during the Second World War, they became an integral part of the Soviet Union. Simultaneously, despite heavy oppression, extensive deportations conducted during Stalin’s reign and efforts to tie the formerly independent countries to the Soviet Union also by means of infrastructure, the Baltic States always kept a strong spirit of independency. This was illustrated, among other things, by a strong opposition towards the Soviet regime and a de facto guerrilla warfare against the occupants in Lithuania that took place between 1944 and 1953 (Snyder 2012). Also, during the Communist era, the Baltic States had retained

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higher living standards compared to the rest of the Soviet Union, which only contributed to their perception of exceptionality among the nations of the Soviet Union. Contrary to some of the former Soviet Union satellites in central Europe, the emancipation and the actual secession of the Baltic States was not so smooth. In the aftermath of the Baltic States’ secession from the Soviet Union in 1991, the former Communist hegemon used also energy supplies to exert pressure over the region to keep them within its sphere of influence. Between 1990 and 2015 the three Baltic States experienced eleven supply interruptions of oil and gas supplies, mostly excused as of a technical nature by the Russian side but some, especially in the early years of independence, were quite obviously related to the region’s secession (Collins 2017). Therefore, it is no surprise that the issue of energy supplies has been largely securitized and became an integral part of the state security polices at large. Given the energy consumption of the Baltic States, they are of some significance for Russia to alter its energy export strategy, regardless of the reasons behind the change, be it geopolitically motivated or induced by environmental concerns. On the other hand, as illustrated above, the Baltic States themselves do perceive their reliance on Russian supplies sensitively and as a potentially endangering factor (Adomaitis and Lannin 2012; Hollerbauer 2017). It is thus no surprise that they have been among the most vocal critics of Russian energy-related projects in the vicinity of the Baltic region. Most recently, these have been Gazprom’s Nord Stream 2 pipeline project and Rosatom’s Astravets Nuclear Power Plant project. While Nord Stream 2 has been getting a lot of attention in the transatlantic context, Astravets, for its part, has been flying largely under the radar, at least outside the Baltics.

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The State of the Region’s Energy Sector

With regard to the experience of once being an integral part of the Soviet Union, combined with Russia’s apparent efforts to maintain leverage over the region, the Baltic States have largely perceived their reliance on

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Russian supplies as a weakening factor for their security. In the security sphere, the predominant understanding in the Baltics is that energy supplies are an indispensable part of the Russian power toolbox and that the Kremlin uses energy supplies as a leverage at will (Adomaitis and Lannin 2012; Hollerbauer 2017; Sytas 2016). All three Baltic States are heavily dependent on fossil fuels regarding their total primary energy supply (TPES) (see Table 1). Latvia is least dependent on fossil fuels but still around almost two thirds of its TPES is coming from oil, gas or coal. More specifically, oil is the most dominant (31%) with biofuels (37%) and natural gas (26%) coming second and third, respectively (OECD 2019a). Lithuania relies mostly on oil (46%), natural gas (29%), and biofuels (21%) (OECD 2019b). Estonia, for its part, is a unique case of a country with TPES based predominantly on domestically available oil shale (71%), with other important sources being biofuels (17%) and natural gas (7%) (OECD 2019c). As can be seen, apart from a significant share of fossil fuels, a common feature seems to be a relatively high share of biofuels. As regards the current gas supply situation, all three Baltic States produce no natural gas at all. Therefore, their entire demand is met by imports. More specifically, annual consumption of Lithuania is 2 billion cubic meters (bcm), Latvia 0.4 bcm and Estonia 0.3 bcm. In Lithuania and Latvia, natural gas assumes almost one third of the TPES. Estonia is an exception, as the country meets most of its energy needs by shale oil and natural gas meets less than one tenth of its energy supply (International Energy Agency 2018a, b, c). However, in all three countries, natural gas is used for generating electricity (see Table 2), industrial production and heating and, therefore, plays an important role for the Table 1 Baltic countries’ total primary energy supply in 2018 (%)

Estonia Latvia Lithuania

Coal

Oil

Nuclear

Natural gas

Biofuels and waste

Wind, solar, etc.

Hydro

71.4 1.0 3.1

1.7 31.3 45.6

0 0 0

7.1 26.2 28.5

18.8 36.0 20.6

0.9 0.2 1.6