Discussing the impact assessment of the ‘third energy liberalisation package’

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

Questions are being raised about the quality and effectiveness of evaluating the costs, risks and benefits of the Commission’s impact assessment on the third energy liberalisation package, says Jacopo Torriti in a May 2008 report for the European University Institute.

Torriti analyses the interaction between the Commission’s legislative proposals on the third energy package and the effectiveness of impact assessments (IA). Before the Commission issued its package on energy liberalisation, debate about its possible consequences was already heated, he explains. 

The focus of these debates was the division between the Commission and a number of member states opposed to the EU executive’s “ownership unbundling” proposal, observes Torriti. While Germany and France were vocal in their opposition to the Commission, the UK and the Netherlands were in favour, he adds. 

The academic debate centres on issues such as the economic advantages and drawbacks of ownership unbundling, the effects of liberalising the energy market, the changing role of energy regulators, cooperation among energy regulators, the limited options open to consumers to influence the package, the French position on European energy policy and the risks of liberalisation, he says. 

Following criticism of the IA on the third energy package by the European Parliament and Germany at the European Council, Torriti believes the “dissatisfaction with the IA raises questions as to the quality of the report”. 

He claims that as a result of the “exogenous constraints that the Commission had to face in the phase of the proposal for the legislative package,” the “IA is limited in terms of analytical thoroughness”. 

Furthermore, Torriti believes the “macro-economic model used in the IA does not address the objectives of the proposal,” while “the report is structured around the ownership unbundling alternative, not the ISO [independent system operator] alternative”. 

He criticises the way IAs relate to policymaking procedures as these do “not favour technically impressive assessments”. However, he says the Commission is not likely to “pay much attention to those IAs sending contradictory signals” as these would not have any significant impact on the eventual policy proposal. 

“At best,” the author says, “the IA system fits into EU policymaking as a valid decision-making aid. At worst, it may exhibit some of the worst aspects of the bureaucratic instruments of decision-making.” He believes current IAs are more like the latter. 

Torriti concludes by saying that despite his criticism, the report should not be seen as a “negative judgement” on IAs. He believes they are an important ingredient of “an informed, open and transparent policymaking process”. 

Subscribe to our newsletters