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Energy Policy 63 (2013) 449–457

Contents lists available at ScienceDirect

Energy Policy
journal homepage: www.elsevier.com/locate/enpol

Conceptual proposals for measuring the impact of international


regimes on energy security
Michael Sander n,1
Research Center Siegen, Hagener Straße 139, D-57072 Siegen, Germany

H I G H L I G H T S

 International regimes mitigate political risks for energy supply and must be considered.
 The paper proposes two concepts to measure energy regime effectiveness.
 The OPS-variant measures output, the IRDB-variant measures structure effectiveness.
 The paper offers a preliminary feasibility test for the concepts.
 Finally, it suggests further roads for research.

art ic l e i nf o a b s t r a c t

Article history: The paper proposes two concepts to assess the effect of international regimes on energy security. Existing
Received 17 May 2012 indicators focus mainly on state-level factors, excluding international influences. International relation
Accepted 29 July 2013 scholars on the other hand see a clear connection between international regimes and stable energy
Available online 4 September 2013
relations. International regimes stabilise energy relations by providing frameworks for negotiations,
Keywords: defining, controlling and sanctioning compliance and allowing the actors to engage in package deals.
Energy security The researcher needs to include these factors in a complete assessment of political energy security risks.
Regime effectiveness As first step, the paper uses the effectiveness of control mechanisms as basis for such consideration. It
Energy governance refers specifically to international arbitration as the most important control mechanism in international
energy relations. The simplest measurement option is the share of a county's energy imports covered by
a certain regime. The paper applies the Oslo-Potsdam-Solution to account for outcome effectiveness.
It applies a variant of the International Regimes Data Base protocol to account for effective regime
structures. In a last section, the paper proposes some possible paths for future research.
& 2013 Elsevier Ltd. All rights reserved.

1. Introduction: why to assess regime effectiveness proposing some venues for its systematic consideration in political
risk assessments. In this context, it understands energy security
Energy security is a complex and multi-faceted phenomenon. narrowly as security of energy supply. Largely following Winzer's
Different ways of thinking about energy security lead to different recommendation (Winzer, 2012), it refers to security of energy
definitions which in turn consider different aspects out of their supply as continuos supply of energy commodities at stable prices.
specific focus. These definitions encompass topics as diverse as for This includes the price dimension despite warnings against such
example climate change, social development or piracy and terror- “subjective severity filters” (Winzer, 2012) in order to capture the
ism (see Sovacool, 2011: 3–6). whole range of regime effects on security of energy supply. Due to
This paper aims to improve our understanding of the crucial its focus on political actors and political regulation of energy
international governance dimension of energy security by systems, this paper situates its definition of “energy security”
within a political security-oriented perspective on energy or what
Jewell and Cherp called the “sovereignty mind-set” (Cherp and
n
Tel.: +49 271 740 3847. Jewell, 2011a: 332; Cherp and Jewell, 2011b: 206).
E-mail address: michael.sander@uni-siegen.de One important school within this mind-set regards political
1
I want to thank the two anonymous reviewers for Energy Policy, especially security of energy supply as a zero-sum game for control over
reviewer 1, as well as Annika Fischer and Wolfgang Fischer from the Institute for
Systems Analysis and Technology Evaluation at Forschungszentrum Jülich (IEK-STE)
scarce energy resourcs with the potential to escalate up to full-
for their feedback on earlier versions of this paper. I also want to thank IEK-STE and scaled military conflicts. However, this article situates itself within
the Research Center Siegen for their support. another important substream of political energy security research

0301-4215/$ - see front matter & 2013 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.enpol.2013.07.127
450 M. Sander / Energy Policy 63 (2013) 449–457

that views international energy relations as positive-sum coordi- 2007), which is also used by Cabalu (2010). Most recently, the
nation games between actors with different but compatible pre- IEA published a model to assess short-term energy security
ferences. See also Finon and Locatelli (2008) and Correlje and van (MOSES) that classifies states according to the external and
der Linde (2006) for a closer assessment of these two schools, internal risks they face and their potential external and internal
which more or less resemble what Ciuta describes as the “logic of resilience against the effects of realised risks (Jewell, 2011a).
war” and the “logic of subsistence” (Ciută, 2010: 129–134). MOSES refers to the OECD political stability indicators to assess
Several indicators exist to measure the different dimensions of political risks from supplying states, which it includes as a
energy security (see for example Winzer, 2012; Kruyt et al., 2011, secondary assessment item for crude oil and natural gas (Jewell,
2009 for overviews). Only few of them explicitly consider political 2011a: 11)3.
factors. None of these cover explicitly cross-border factors like The WGI tries to capture perceptions of six different indicators,
international regimes or transnational cooperation. namely voice and accountability, political stability and the absence
Some indicators try to determine political risks through con- of violence, government effectiveness, regulatory quality, rule of
clusion by analogy to other more or less connected policy areas. law and control of corruption. The authors gather data on these
Frondel et al. use the OECD risk classification to account for the indicators from surveys by firms, country analysts, nongovern-
probability of politically motivated energy supply disruptions mental organisations and commercial business information provi-
(Frondel and Schmidt, 2008, 2009; Frondel et al., 2009). Löschel ders, including the PRS Group (Kaufmann et al., 2010). The WGI
et al. also refer to the OECD classification, but use it only as a proxy therefore covers fewer aspects than the ICRG and only considers
to illustrate an ex-post indicator for energy security (Löschel et al., secondary sources. It does however integrate a greater amount of
2010). The OECD developed its system to account for the default information including the ICRG and could hence be considered the
risk of external credits (OECD, 2011). more effective instrument to assess political instability. Kruyt et al.
Jansen et al. take a more general approach in accounting for (2009) note that for both Jansen et al. (2004) and the IEA indicator,
overall political stability in an energy exporting country, using the the relation between political and market-based indicators is
Human Development Index as a base. The HDI is calculated on the arbitrary. They see the results of Gupta to be more robust due to
basis of four indicators that measure health, education and living her application of Principle Component Analysis (Kruyt et al., 2011).
standard. The authors assume that a higher HDI score implies All these indicators locate political risks in certain properties of
higher political stability and hence a lower risk for a disruption of the supplying state, most generally in its stability. Hence, impor-
supplies (Jansen et al., 2004). The HDI excludes factors as the tant influences on energy security remain excluded, which could
internal structure of (energy) markets or the political process in lead to flawed assessments in some cases. Even thorough, sub-
energy. Hence neither the resource control of certain actors nor stantial and exhaustive syztematizations of the whole energy
the adaptability of exporting countries in case of a crisis is security complex only mention the national and the global level
measured. This might result in an underestimation of existing of geographical thread extension (e.g. Winzer, 2012).
risks as some autocratic countries with a (semi-)monopolised Due to this situation, existing instruments exclude crucial risks
market structure, most prominently Russia, figure comparatively and influences on energy security, leading to potentially flawed
high on the HDI. For example, Algeria (0.713; rank 93.) figures assessments. This might contribute to the general lack of confidence
lower than Russia (0.788; rank 55.), which would make the latter of policy makers in complex indicators, partly due to the neglect of
the more secure energy trading partner according to the indicator more qualitative factors (Cherp and Jewell, 2011b: 209). It also
(UNDP, 2012). Actually, from the two countries it was only Russia obstructs the consideration of essentially international and transna-
that repeatedly caused disruptions in EU energy supply. Hence, the tional factors in scenario-based energy security assessment of
somewhat paradox order of the two countries points to the possible future development paths (see for example Jewell, 2011b:
general danger of excluding national and international political 2 on the preferability of quantitative indicators for scenario formula-
factors or market structure from the assessment of international tion). Existing indicators also fail to offer quantitative data for
(energy) risks. statistical research on energy governance. Hence, research on energy
The HDI also excludes the risk of international conflicts with security falls back behind comparative research programs, especially
participation of the member state. This is another source for on environmental governance.
possible flaws. Israel, for example, figures very highly on the HDI Regime effectiveness has a great influence on the conduct of
(0.9; rank 16) (UNDP, 2012) and should therefore be regarded as international energy relations and is therefore a necessary element
stable and secure energy supplier. This assessment of Israel's – for any comprehensive assessment of security of supply (see for
hypothetical – role as energy supplier ignores the highly unstable example Dannreuther, 2011a). It also allows shifting the level of
and conflict-prone regional environment of the Middle East. analysis in energy security from the currently dominating state
The International Country Risk Guide (ICGR) of the Political Risk centred perspective to the international level. That should allow
Services Group (PRS)2 measures stability along political, economic for more appropriate risk assessments, since political security of
and financial dimensions. The editors of the ICRG value the energy supply is an inherently cross-border4 concept – trade
different indicators for political stability following a subjective behaviour of or in one state affects the security of another – and
assessment of several pre-set questions. These cover inter alia many important influences – e.g. transnational business coopera-
government stability, investment climate, democratic accountabil- tion, general relations between these states and transit states and
ity and the risk of internal and external conflicts (The PRS Group, indeed regimes – are situated on the transnational and interna-
2011). Both the earlier version of the IEA indicator (Blyth and tional level. To assess cross-border factors is therefore not only
Lefevre, 2004) and Gupta (2008) apply the ICRG to account for the important in order to allow more comprehensive policy oriented
political stability of energy exporting countries. The IEA later research. It is also an important step in analysing and comparing
replaces the ICRG with the World Wide Governance Indicators of the effects of different regimes on energy security (see for example
the World Bank (Lefevre, 2009; International Energy Agency,
3
Jewell also lists political stability of suppliers as risk factor for coal imports,
but does not use it in her assessment due to lack of historical evidence for its
2
The PRS Group is a private consultancy in New York that specializes in the relevance (Jewell, 2011a: 29).
4
assessment of political risks. The ICRG is one of their main products and is available From here on, I use the term “cross-border” to refer to both international and
under http://www.prsgroup.com/ICRG.aspx. transnational relations simultaneously.
M. Sander / Energy Policy 63 (2013) 449–457 451

Young, 2001), which is currently one of the most important and Only recently, scholars of energy security revived systematic
(still) underdeveloped topics in energy research (Florini and analysis of international regimes, starting from a fundamental
Sovacool, 2011). critique of the predominant neo-realist perspective. Most studies
From an IR perspective, the state-centred perspective of current concluded that current energy systems are insufficient in addres-
indicators largely corresponds to the neo-realist paradigm that sing the challenges to global energy systems, given the urgency
dominates – often implicitly – many studies on international and complexity of the transformation required (see for example
energy security (see Dannreuther, 2011b). The systematic assess- Cherp et al., 2011; Goldthau and Witte, 2009; Goldthau and
ment of regime effectiveness would allow considering factors Sovacool, 2012; Florini and Sovacool, 2011). Different authors
derived from the liberal paradigm of international relations and propose either a stronger role for governance clubs as the G8
hence widening our conceptual perspective on international and the G20 (Lesage et al., 2010) or the establishment of an
energy policy. Liberal scholars agree with neo-realists that states International Energy Stability Board (Victor and Yueh, 2010).
are important actors but also see an important role for transna- While these studies shared a global perspective on energy
tional relations and international regimes, which might overcome regimes, others looked at the motives and policies of individual
coordination problems and enable lasting cooperation. Concerning states. One study concluded that both oil and gas importers and
energy, liberal authors argue for strengthening the role of market exporters base their decision to join an international organisation
forces and international law to govern international energy rela- in energy on the membership of (other) important exporters
tions in a cooperative way. They also call for improved consumer– (Baccini and Thurner, 2011). This result concurred with the finding
producer cooperation in order to maximise the absolute gain of a that transnational integration was stronger between different
stable trade relation (typical representatives for this school are upstream companies than between upstream and downstream
Goldthau and Witte (2009) and Wenger et al. (2009). Currently, firms (de Graaf, 2011). Another study interpreted the development
these factors are mostly disregarded in quantitative energy secur- of the regime complex in energy as the result of growing
ity assessments. dissatisfaction of powerful regime members with an insufficient
Therefore, this paper describes possible venues for the sys- regime performance (Colgan et al., 2011). The authors assessed
tematic incorporation of international regime effectiveness in this performance in the form of (oil) prices. But it is possible to
energy security evaluations by proposing some assessment con- extent their central point to volume disruptions. One member of
cepts and potential roads for their future development. In doing so this research group later traced the origins of IRENA to the
it contributes to the research agenda on energy security by dissatisfaction of domestic interest groups, who engaged in
providing a methodological approach to capture systematically institutional hedging strategies against the dominance of conven-
the effects of international regimes (also see Cherp and Jewell, tional energy companies in the IEA (Van de Graaf, 2013).
2011b: 211). The rest of the paper is set out as follows: In Section 2, An analogy to the research on international environmental
the influence of international regimes on energy security is regimes potentially allows drawing further insights on the effects
described. Section 3 and 4 propose some ideas and preliminary of regimes. According to several studies, the centrality of a state in
tests on potential quantification concepts. Section 5 concludes the the network of international environmental regimes increases
paper and suggests some directions for further research. both the likeliness of its entry into further regimes and its own
sustainability record (Ward, 2006; von Stein, 2008). It is plausible
to assume that the same mechanisms apply to the energy sector.
On a regional level, several studies applied the theory of
2. Regimes and energy security: what to assess
external governance to analyse the EU's attempts to export its
energy market rules. They concluded that a combination of
2.1. General effects of international energy regimes
conditionality and active involvement of the Commission is most
effective in establishing international rules for energy. They also
According to the seminal definition by Krasner, international
agreed that the existence of a strong external actor with the
regimes are “…sets of implicit or explicit principles, norms, rules
capability to influence actions of regime members – specifically
and decision making procedures, around which actors' expecta-
Russia – severely impedes the effectiveness of external rule
tions converge in a given area of international relations” (Krasner,
transfer (Hofer, 2007, 2008; Dimitrova and Dragneva, 2009; also
1982).5
see Oliva and Sorbello, 2012).
Research on energy security considered international regimes and
transnational interdependencies early on. Most notably, Keohane
2.2. Dispute settlement by international energy regimes
developed his new institutionalism on an analysis of, among others,
the global regime of oil (Keohane, 1984). Nevertheless, political
International regimes facilitate cooperation by providing a
science research on energy security became dominated by an –
framework for negotiations, controlling compliance and sanction-
often implicit – neo-realist paradigm that focused on the relative
ing non-compliance and by allowing for package deals between
(economic) power of national states and geo-political conflicts rather
different areas of cooperation (Keohane, 1984). Of these instru-
than transnational business relations or international rule-making.
ments, formal controlling and sanctioning mechanisms are most
Meanwhile, even an essentially neo-realist scholar as Klare
easily evaluated by analysing the respective provisions in the
(Dannreuther, 2011b) acknowledged the impact of regimes and
governing documents of international regimes. International arbi-
institutions, when he calls for “market mechanisms” or “multilateral
tration is the most important instrument for dispute resolution in
agreements” as instruments to reduce the level of conflict in
energy (Martin, 2011). Therefore, at this point, this paper proposes
international energy systems (see for example Klare, 2001).
to use expressions of opportunities for and effectiveness of
international arbitration as values for assessing different energy
5
In a report to the EU's Polinares project on international resource security, regimes.
Dannreuther applies the term “regime” in a broader sense than this article, referring The proposed assessment procedures concern primarily
to the general structure of global political–economic relations. In this view, regimes that govern a relationship between energy exporters
international regimes as defined by Krasner serve as intervening variables between
the physical and economic characteristics of an energy carrier and these over-
and importers. They consider important regional and sectoral
arching structures (Dannreuther, 2011a). However, in this article I only consider organisations as IEA and OPEC only insofar as they govern trade
explicit regimes as defined by Krasner. relations. But since this is not their main task – their core logic is
452 M. Sander / Energy Policy 63 (2013) 449–457

one of “common defence” rather than “common security” – they and the subjective perspectives of the researcher/policy maker,
are not in the focus of the proposed procedures (see for example including the priority of issues (Cherp and Jewell, 2011a).
Florini and Sovacool, 2011; Victor and Yueh, 2010 for an overview This paper understands energy security narrowly as security of
over the structural cleavages between regional and sectoral energy supply, defined as the absence of political and economic risks to
organisations in the current energy governance system). energy resource imports. Environmental and social dimensions of
Global multilateral regimes include the WTO and the Energy energy security are excluded. The proposed assessment proce-
Charter Treaty. The WTO provides the parties to a conflict with a dures refer to a given country or a group of countries and their
clearly institutionalised sanction mechanism, namely the Dispute relations to energy suppliers as their geographical boundary,
Settlement Mechanism laid down in Art. 23 of GATS and in the including the countries' relations or the sum of their relations to
Dispute Settlement Understanding, annexed to GATT 1994 (World energy suppliers. The substantial boundary is the import portfolio
Trade Organization, 1994a, 1994b). of a given energy carrier. The rationale of the following discussion
The Energy Charter Treaty differentiates between conflicts falls into what Cherp and Jewell named the “sovereignty” mind-set
between an investor and a member state on the one hand and of the future, since it sees the major vulnerabilities of the energy
between two member states on the other. Contracting parties that system arise from the collusion of the “interests, intentions” and
fail to resolve their conflict diplomatically may submit the matter actions of social actors. It differs slightly from the account of Cherp
to an ad hoc tribunal, set up in The Hague and governed by the and Jewell by seeing the key threat not in the rise of “malevolent
UNCITRAL rules. Investors on the other hand may choose to submit powers” (Cherp and Jewell, 2011a) but in inefficiently solved
the conflict to either the International Centre for Settlement of dilemmas of common interests.
Investment Disputes, to the Arbitration Institute of the Stockholm One assessment option is to consider the share of a
Chamber of Commerce or to an ad-hoc committee under the country's imports of a given energy source or carrier that is
UNCITRAL rules ((Energy Charter Secretariat, 2004) also see governed by a certain regime. If one assumes that any regime
(Konoplyanik and Wälde, 2006)). Hence both the WTO and the that allows sanctioning non-cooperation has a certain stabiliz-
ECT offer mechanisms to resolve disputes and sanction non- ing effect on international energy relations, then an import
compliance in fields that are important for international energy portfolio with a higher share of institutionalized trade relations
relations, namely trade, transit and investment. should ceteris paribus be more stable than a portfolio with a
Regional agreements that include dispute settlement provi- lower share.
sions are the main instrument of the EU's external energy This paper offers two further ideas on how to assess system-
diplomacy (Lavenex, 2009). Most prominently, both the European atically energy regime effectiveness. The first proposal is the Oslo-
Economic Area and the Energy Community oblige their members to Potsdam solution (see Hovi et al., 2003a for a description of this
implement EU law into their national legislation. Both agreements solution and Young, 2003; Hovi et al., 2003b for a discussion). This
also give the competence to control this implementation and solution expresses effectiveness in the term
sanction non-compliance to the European Court of Justice, whose
APNR
decisions are binding for the parties (European Union, 2011; ð1Þ
CONR
Energy Community Secretariat, 2011). The EU's extra-regional
agreements regularly include dispute settlement agreements at where AP is the actual performance of a regime, NR is the
least for state–state disputes. This extension of EU rules beyond hypothetical situation without the regime, and CO is the collective
the Union's borders is most effective in the preparatory stages of optimum, i.e. the ideal solution for the problem the regime
an agreement and in absence of competing governance providers addresses. To use the Oslo-Potsdam solution (OPS), one has to
(Dimitrova and Dragneva, 2009). However, even the formal expan- establish two counterfactuals, namely NR and CO. The authors of
sion of these rules and especially of the EUCJ's decision compe- the solution propose different approaches to this task, including
tences stabilise international energy relations and reduce the risk expert interviews, simulations or simply referring to the status-
of non-cooperative behaviour (Lavenex, 2011, 2009). quo ante before the regime was established (Hovi et al., 2003a).
Bilateral Investment Treaties (BITs) are the most important This paper sees a combination of expert interviews and simulation
agreements for transnational investments and the investment as the best option to establish counterfactuals for qualitative
provisions of the ECT draw strongly on modern BIT variants factors and evaluating the development of regime effectiveness
(Konoplyanik and Wälde, 2006). Most importantly, BITs regularly over a certain period. However, the time and resource require-
include provisions for international settlement both for state–state ments to establish and apply such a research tool are considerable.
disputes and investor–state disputes. Empirical studies found that Using the ratio of unresolved to resolved conflicts with the sum
any pending arbitration registered in the past two years reduces FDI establishing the value for NR might offer a – not unproblematic –
inflow by nearly 86 billion US$ and any decision against a govern- preliminary solution.
ment or any settlement between the parties by 300–350 billion US$ Another question concerns the selection of values for the
(for this paragraph see Allee and Peinhardt, 2011). variables. Concerning volume risks, either the number of conflicts
International and transnational dispute settlement mechan- or the number of realized disruption risks are optional values for
isms become increasingly pervasive on the global regional and assessing regimes. The number of resolved cases before a formal
bilateral level. They also cover more and more aspects of interna- international dispute settlement body could serve as a dummy
tional and transnational energy relations and can credibly threat variable for the number of avoided conflicts. The data is imperfect,
sanctions against non-compliance. Due to their growing empirical not only because it omits any conflicts that were resolved by
importance, comprehensive energy security assessments need to negotiations or in another forum, but also because it ignores the
include these regimes. overall reduced level of conflict that results from the general
functions of regimes as facilitating communication or increasing
generalised trust. Therefore, this formula can only serve as a
3. Conceptual ideas to assess energy regime effectiveness preliminary instrument to assess effectiveness until a comprehen-
sive counterfactual is established by expert interviews and simula-
Assessing energy security requires prior clarification of the tion. Also, there is currently no database that includes all energy-
spatial and substantial boundaries of the system under considera- related conflicts for a given relation. Therefore, the researcher has
tion, the respective mind-set concerning its future development to gather the necessary data from several sources.
M. Sander / Energy Policy 63 (2013) 449–457 453

The OPS considers actual regime output to measure effective- 4. Two preliminary applicability tests
ness. Alternatively, an attribute-based approach focuses on the
process dimension by comparing actual regime structures to an I tested the basic feasibility of the proposed concepts including
ideal type most-effective regime. the availability of required data by applying them to two rudi-
This paper proposes to use the data protocol of the Interna- mentary assessments. However, the following illustrations only
tional Regimes Data Base (IRDB) to quantify energy regime effec- represent very rough and preliminary applicability tests for the
tiveness (Breitmeier et al., 1996). Out of the IRDB's 130 factors, it concepts.
suggests 13 that are most applicable to quantify formal regime Firstly, I applied the OPS concept to Germany's gas import
structures. These include the explicit or tacit nature of a regime, portfolio in 2009. I chose this year, because it was the last time
the binding or non-binding effect of its rules, the precision of its when all of the country's gas imports were covered by an
rules, its depth, the (non-)existence of an independent secretariat, international regime with formal dispute settlement provisions.
the types of decision it makes, the rules by which it decides and Using it as point of reference allowed me to apply the indicator's
the bodies that decide formally, the actual involvement of these OPS variant in a comprehensive assessment of a complete import
bodies in decision-making, the existence of external bodies, mix. The regimes in question were the Energy Charter Treaty that
reporting procedures and review processes concerning regime governed trade with Russia and the EU energy regime that applied
implementation and the question, if the formally agreed bodies directly to imports from the Netherlands and via the EEA agree-
are actually in operation. ment to imports from Norway.
The data protocol formulates specific questions to assess the For the ECT conflict data, I referred to the list of arbitration
characteristics of each factor. The IRDB then assigns distinct cases on the homepage of the Energy Charter Treaty Organisation
numbers to these characteristics, but uses them only as coding and the Annual reports of the European Court of Justice as well as
instruments. To use them as quantified expressions of regime the EU's Court of First Instance. These courts cover not only all
effectiveness is therefore somewhat of a conceptual stretch. While energy-related aspects of EU law but also control the implementa-
the specificity of the questions and the distinct assignment of tion of EU law within the European Economic Area (EEA) that
numbers and characteristics justify this preliminary approach, includes all EU member states as well as the EFTA members Island,
some modifications are necessary to utilise the IRDB-based data Norway and Lichtenstein. Together, these regimes governed all gas
for the proposed assessment procedure. Where the data protocol imports of Germany until October 18, 2009 when Russia ended her
assigns higher values to a more effective regime characteristic provisional application of the Energy Charter Treaty. To calculate
than to a less effective, I reversed this order. This was necessary to the OPS concept for the Energy Charter Treaty, I excluded all cases
align the codings with the general orientation of most assessment that began later than 2009, since it is too early to judge their
instruments for political energy security risks, where higher values results. Nine of the remaining 25 cases were still unresolved at
reflect a higher risk rather than higher security. time of writing either due to revision or annulment procedures or
In some cases the data protocol allowed mentioning more than due to lack of a decision on the original claim. All cases in the latter
one characteristic for a single factor – for example in the case of group are pending for more than 5 years, which lend additional
types of decisions or formal decision making bodies. Here, I support to a negative judgement of the respective arbitration
calculated the sum of applicable characteristics and subtracted it procedures. Thirteen of the 16 successfully resolved cases ended
from the highest possible value plus one. The results varied with an award. Settlement agreements between the parties con-
between one and the highest possible value with one reflecting cluded the other three cases. I also considered the three disrup-
the most effective regime structure. I also established categories in tions of Russian gas supplies as failures of the ECT, leading to an
order to assess the existence and type of external bodies and absolute number of 12 unresolved conflicts. Calculating with these
divided the factor “review process” into the two aspects “informa- numbers, OPS-based regime effectiveness for the ECT reached a
tion gathering” and “assessment and sanctioning”, leading to a normalised value of 0.43. This lies close to the IRDB-based
final set of 14 factors. Table 1 gives an overview over these effectiveness value for the ECT of 0.45.
modifications. I referred to the annual statistics of the European Court of
The researcher could assess regime effectiveness either indivi- Justice and the Court of First Instance/General Court to assess the
dually or use it as input to more comprehensive analyses. By EU's energy regime effectiveness. These documents included data
including both national and international risk factors, the latter on new, pending and resolved cases as well as the average time
option is useful to assess the overall political risk in an energy required to resolve a case. Using this data posed a delineation
relation. problem, since the EU courts resolve all cases before them in one
Most authors (see for example Blyth and Lefevre, 2004; Lefevre, way or the other. But assigning a perfect effectiveness value to the
2009; Gupta, 2008; Löschel et al., 2010) use a modified Hirsch- EU regime would probably overstate the case. Therefore, I used the
man–Herfindhal index to assess political risk factors. In the sum of the average annual numbers of pending cases as proxy
formulation of Lefevre, this index runs6: value for NR and the sum of the average annual numbers of
resolved cases for AP. For both variables, I used the sum of the
ESMCpol ¼ ∑iðrin sij2 Þ ð2Þ respective values for the European Court of Justice and the Court of
First Instance. I also used the general case data, due to the
Here, r is the political risk-rating of an exporting country and s is insufficiently low numbers of energy-related cases. Calculating
the share of an energy carrier in the importing country's primary on this basis led to a normalised regime effectiveness of 0.44.
energy consumption. Including a regime effectiveness coefficient I tested the concept's usability as input in comprehensive
into this equation offers a straightforward way towards a compre- assessments at the example of Lefèvre's ESPAI, which measures
hensive political risk assessment. the physical availability risk component of resource concentration
as the share of primary energy consumption that is covered by
pipeline-bound gas imports (Lefevre, 2009: 1640). Referring to the
data of the German Ministry for Economic Affairs and Technology
6
Andrew Stirling repeatedly suggested replacing the HHI with the mathema-
(BMWi, 2013), I calculated Germany's 2009 ESPAI to be approxi-
tically stronger Shannon-index (Stirling, 1998, 2010). The new formula would then mately 26 or 0.26 normalised. This very low value reflects the
read: ESMCpol ¼ Σ(rin(sijnln sij)). overall share of gas in Germany's primary energy consumptions.
454 M. Sander / Energy Policy 63 (2013) 449–457

Table 1
Modifications to the International Regime Data Base coding instrument for the proposed concept.

IRDB-Code: Criteria IRDB-Number Substantial meaning Regime effectiveness assessment value

203A: Explicitit of Tacit Regime? 1 Explicit 1


2 Tacit 2

205C: Legally binding rules 0 N/A 0


1 Binding 1
2 Non-binding 2

205D: Precision of rules 0 N/A 0


1 Precise 1
2 Between 1 and 3 2
3 Medium 3
4 Between 3 and 5 4
5 Ambiguous 5

205G: Regime depth 1 Very shallow 5


2 Shallow 4
3 Medium 3
4 Deep 2
5 Very deep 1

209A: Organisation of Secretariat 1 No Secretariat 4


2 Own Secretariat 1
3 Secretariat in External IGO 2
4 Secretariat in External NGO 3

210A: Types of decision made by the regime 1 Establish substantive rules Value is 9 minus sum of decision types
2 Apply rules
3 Ammend core documents
4 Admit members
5 Expell members
6 Accept withdrawal of members
7 Terminate regime
8 Resolve disputes

210B: Decision rules 1 No decision rules 6


2 Unanimity 4
3 Consensus 3
4 Qualified majority 2
5 Simple majority 1
6 Exit rights 5

210C: Decision making bodies 1 Regular conference of parties 1


2 Ad hoc conference of parties 2
3 Standing subsidiary body 3
4 Ad hoc subsidiary body 4

210D: Participation of decision making body 1 Participation in decision making 1


2 Final decision 2

210F: Participation of external bodies 0 No external body 0


1 Independent external body 1
2 Part of IGO 2
3 Part of INGO 2
4 Part of other regime 2
5 Part of IGO and other regime 3
6 Part of INGO and other regime 3
7 Part of IGO and INGO 3
8 Part of IGO, INGO and other regime 4

212A: Reporting procedures 1 No 2


2 Yes 1

212B Review procedure 1 No 212Ba 0


2 Broad assessment Erased
3 Information gathering by third parties 212Ba 3
4 Own information gathering 212Ba 2
5 Broad assessment by supreme decision making body 212Bb 5
6 Broad assessment by other bodies 212Bb 6
7 Review by supreme decision making body 212Bb 3
8 Review by other body 212Bb 4
9 Responses by supreme decision making body 212Bb 1
10 Responses by other bodies 212Bb 2
11 On-site inspections 212Ba 1

310A: Agreed bodies in operation 1 Yes 1


2 No 2
M. Sander / Energy Policy 63 (2013) 449–457 455

Table 2
Regime effectiveness values for the modified IRDB-concept.

EEA CARIFORUM EU-Russia Early Warning Cotounou EU-Mediteranean EU-GCC Cooperation EU Energy Charter
Mechanism Agreement Agreement Treaty

Explicity of rules 1 1 1 1 1 1 1
Legally binding rules 1 1 2 1 1 1 1
Precision of rules 1 2 4 5 3 3 1
Regime depth 1 2 4 5 3 4 1
Organisation of Secretariat 2 2 4 1 4 4 1
Types of decisions made 1 4 7 6 6 6 4
Decision rules 3 5 4 4 4 4 4
Main decision making body 1 1 2 2 3 1 1
Participation of decision 1 1 1 1 1 1 2
making body
Existing of external bodies 2 2 3 0 0 0 3
Reporting procedures 1 2 2 2 2 2 1
Review process: information 2 2 4 4 3 3 3
gathering
Review process: Assessment 2 2 7 2 2 2 1
Agreed bodies in operation 1 1 1 1 1 1 2
Average 1.4 2 3.3 2.5 2.4 2.4 1.9
Normalised average 0.37 0.51 0.84 0.64 0.62 0.62 0.49

Using the share of gas imports instead – all direct German imports firstly, I used overall gas supply rather than primary energy
are by pipeline – leads to a considerably higher modified ESPAI of consumption as point of reference. While gas is generally more
87. This might better capture some qualitative aspects of security substitutable than oil, it nevertheless serves some specific pur-
of supply, e.g. the importance of gas in providing medium and pose, for example in providing German medium and peak load.
peak load in Germany's power sector. Combining these results This specificity is perhaps better captured in an energy carrier-
with the average of the two regime effectiveness values of 0.435, specific assessment rather than in an analysis of the overall energy
led to modified risk values of 11.3 or 37.8 respectively. system. Secondly, I scaled the World Bank's political indicators to a
Naturally, this result serves merely illustrative purpose and the range of 0–5 rather than 0–3 to simplify the scaling procedure.
outcomes for the ECT and the EU regime require substantially Hence, the highest possible value for the modified ESMCpol is
different interpretations: in the first case, ineffectiveness refers to 500.000 rather than 300.000 as in the original version. After
actual failure to resolve a dispute. In the second case it merely calculating the ESMCpol values, I added the regime effectiveness
points to difficulties and obstacles in the proceeding. Therefore, values from the IRDB-based assessment as multipliers. Table 3
the illustration proved the basic applicability of the OPS concept to reports the resulting values from this procedure.
measure energy regime effectiveness. Nevertheless, establishing Overall, the IRDB-based concept also proved to be generally
appropriate and sufficient data for an actual application requires feasible. Nevertheless, a comprehensive assessment requires
considerably more work. quantification of regime effectiveness for all energy governance
Secondly, I tested the IRDB-based concept by calculating the regimes based on the modified IRDB data protocol.
energy security risks for the natural gas imports of the EU in 2011 Naturally, these examples illustrate only that the two proposed
– the last year for which EU data is available7 (EU 2012). Different assessment concepts are generally applicable both for individual
regimes govern each of the Union's gas imports from Norway, use and in comprehensive evaluations and that required data is
Russia, Algeria, Nigeria, Qatar and other states. I used the IRDB available. The obvious next steps are to develop the concepts
questionnaire to quantify the characteristics of these regimes. If further and especially to test them against empirical cases and in
more than one regime governed an import relation, I analysed the comparison with other energy security assessment concepts.
strongest regime. Table 2 gives the results of this process. All
information this step required was publicly available on the
homepages of the responsible General Directorates, the EU Exter- 5. Conclusion
nal Service and the organisations in question. Using this data
allowed to assign rough numerical values to every regime's Moving from this preliminary propositions to full-fledged
effectiveness. For a concentrated assessment, one might use either assessment concepts requires more and extensive research. The
the average value itself or the normalised average. first step should establish the database required. This is more easy
Again, I referred to Lefèvre's indicators to test the concept's in the case of the IRDB-based concept. Here, the quantification
usability as input in more comprehensive assessments. In this case, instrument exists – albeit in form of a coding system – and
I used a modified version of ESMCpol. While the indicator mainly primary data is easily available in the public domain, namely in
aims to measure price risks for energy carriers on spot markets the formal treaties and agreements that set up the regimes in
rather than for pipeline bound gas imports, it also includes state- question. Hence, in order to begin with developing and testing
focused political criteria and hence might serve as foundation for specific indicators, the researcher only needs to translate this
more comprehensive assessments. For this preliminary applicabil- qualitative data for all energy regimes into quantified codes using
ity test, I modified the ESMCpol concept in the following ways: the modified IRDB code book. However, future research might –
and probably will – point to the importance of more informal
factors for procedural regime effectiveness.
7
The BP Statistical Review of 2013 offers more recent data, but does neither The task is more difficult for the OPS-based concept. Here, the
include an EU-level assessment nor explicit numbers for each EU member state but
does include a category “Other Europe and Eurasia” for trade movements in LNG
researcher needs to establish two plausible counterfactuals – for
(BP, 2013: 218). This justifies the use of the EU's slightly older but more complete an ideal situation and for a situation without any regime. If one
and more specific data at least for a preliminary applicability illustration. uses the ratio of resolved to unresolved conflicts the task becomes
456 M. Sander / Energy Policy 63 (2013) 449–457

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