Changing Governance of Finnish Energy Policy Making: New Rules but Old Cohesive and Remote Elite?

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1 Changing Governance of Finnish Energy Policy Making: New Rules but Old Cohesive and Remote Elite? Ilkka Ruostetsaari University of Tampere Department of Political Science and International Relation FI University of Tampere, FINLAND e mail: ilkka.ruostetsaari@uta.fi A paper prepared to be presented at the 21st World Congress of International Political Science Association, Santiago, Chile, July 12 16, Workshop RC Political Elites: Comparative Perspectives 1

2 Changing Governance of Finnish Energy Policy Making: New Rules but Old Cohesive and Remote Elite? At least every month I am receiving requests for interview from the international mass media who are asking me, why Finland is constructing new nuclear power plants. It is very difficult for me to explain, why Finland behaves so obstinately I believe, that in the background there are consensual tradition of decision making and the culture of there are no alternatives. Our elite is exceptionally interconnected. If we consider, how unanimously our elites of politics, business, the mass media and labour market organizations support construction of nuclear power plants, it is actually a little alarming. Where are different kind of views characteristic for democratic and pluralistic society, there are any. If we consider, what part of chief editors of daily newspapers support for construction of nuclear power plants, so the elite, who decisively finally decide, what is decided in this country, is as one man and a few women in practice grouped for endorsing nuclear power. It is often explained that in Finland citizens trust in public authority, they trust in that if the decision makers promise that we have a secure nuclear power plant, which produces cheap electricity, off course this must be true. We have firmer trust in engineering and technology than the average. We are technology believers which is seen in founding of the myth of Nokia; Nokia and Finland are in some extent becoming issues where are signs of equality between them. An interviewed member of the energy elite (2009). 1. Introduction Successive studies have demonstrated that in single countries significant variations occur across sectors in the degree to which the state is able and willing to intervene in the economy. Atkinson and Coleman have proposed that much greater attention should be paid to specific arrangements in the relationships the officials involved maintain with key societal actors. Similarly, greater attention must be paid to the specific organizational properties of associational systems and individual firms. Such societal actors, in company with bureaucratic agencies, form the core of policy networks at the sectoral level. (Atkinson and Coleman 1989, 47, 50). This study does not focus on cross sectoral comparison but on longitudinal comparison within one sector, energy policy, and one country, Finland. The Finnish energy system was long characterized by state centredness and detailed governmental control and regulation. State owned companies held the monopoly or oligopoly position in the fields of electricity and peat production, national electricity transfer, oil refining and imports of oil 2

3 products and natural gas. Almost all activities of the energy companies, from price fixing to the construction of power plants, were subject to governmental license procedure. On the other hand, the energy policy making process was characterized by corporatist intermediation: beyond the authorities a few energy producers and distributors manned the governmental preparatory bodies and played the key roles. By contrast, civil society remained weak: consumer organizations or movements supervising the interests of energy consuming firms and households had not materialized. Due to the dominating role of the authorities and the negligible interest of citizens in participation, the role of this mode of intervention remained somewhat ineffective (Ruostetsaari 1989). Regulation of energy policy was step by step annulled from the mid 1980s on, and a deregulation policy was introduced. By the mid 1990s the traditional state centred pattern of Finnish energy policy making came to an end and new rules for the game were introduced. The Electricity Market Act passed in 1995 to a significant extent dismantled governmental regulation and control by introducing market based steering patterns. The electricity markets were opened to competition for firms in 1995 and also for households in 1998, even if electricity transfer grids were left out of competition. The governmental regulation policy was mainly replaced by a competitive policy. The state owned companies lost most of their monopolistic positions, a minority of them were sold to institutional investors and the two most pivotal of them were transformed into listed companies (Ruostetsaari 1998.) Changes pertaining to the Electricity Act and the Natural Gas Act came into force in 2005 in order to implement new EU directives regulating the internal marketing of electricity and natural gas. The next turn in Finnish energy policy making can be timed to the mid 2000s, being a result of the global debate and measures dealing with climate change. International climate negotiations organized by the United Nations as well as the environmental policy of the European Union reduced the elbow room for national energy policy making even if energy policy was not yet officially included in the EU agenda. In 2008 the EU defined targets for member states concerning cutting emissions of greenhouse gas, improving energy efficiency and increasing the utilization of renewable energy sources in energy production. For instance, the target given to Finland to increase the share of renewable energy in energy production from 28.5 per cent to 38 per cent by 3

4 2020 is particularly challenging and its effect on the scope for national energy policy making is fundamental. In other words, regulation, in fact re deregulation, is coming back to energy policymaking. The purpose of this study is to analyze the extent to which these new contexts and rules have transformed the power structure of Finnish energy policy making and whether the most influential actors constitute a coherent energy elite. 2. The tradition of expert power The concept of energy policy can be defined as political steering conducted by political decisionmakers and public authorities focusing on energy management. Energy policy covers research, planning, decision making, implementation and evaluation pertaining to the goals and measures of political decision makers and public authorities focusing on the production, purchase, storage, transfer, delivery and consumption of energy (Ruostetsaari 1989, 22 23). However, this is not to say that energy policy is determined exclusively by decisions and measures taken by politicians and civil servants. Governance is a theoretical perspective which recognizes a new understanding of politics and the role of the political system in politics. A simple definition is the need for cooperation between the state, quasi state, non state (non governmental) and private institutions such as corporations to solve collective action problems and to take responsibility for well being. This means that the components in the political system and its environment are not only intertwined but also highly interdependent. The governance perspective of politics acknowledges that the political landscape has changed significantly. It is no longer the state which is necessarily the primary and dominant actor in politics. Rather, the tasks and responsibilities involved are often shared and coordinated in less conventional ways and through multilayered networks (Micheletti 2003, 5 7; Tiihonen 2004). For instance, the Finnish government cannot enforce its policies regarding energy and environmental protection through its own institutions regardless of the fact that state owned energy companies play an important role in the energy sector in that they function in market competition. On the contrary, implementation of energy policy prepared by the public administration and decided by political institutions depends heavily on the activities of the business sector. Even if the 4

5 construction of every single nuclear power plant has to be authorized by Parliament, Parliament cannot function as a building contractor. Moreover, firms as well as civic associations seek to influence energy policy in order to promote their own interests and de facto shape its content. Solutions to global problems require the cooperation of a number of states and new modes of politics which involve actors and institutions outside the political system. The concept of a policy network implies a variety of structures of interaction and influence between governmental (politicians, authorities), collective (interest groups) and marked based (firms) actors ranging from exclusive iron triangles to open issue networks (van Waarden 1992; Schneider 1992). Western science and technology policy has generally been seen as a policy sector dominated by experts and public administration, where political decision makers have neither played a role nor aspired to do so (Kuitunen & Lähteenmäki Smith 2006: 99; Peterson and Sharp 2001). This is equally the case in Finland: governmental policy making in the field of science and technology has been dominated by experts, perhaps more so than any other policy sector. Despite its vital position in societal development, however, this has played only a marginal role in the agenda of the political parties and Parliament (e.g. Lemola 2004, 301; see also Kantola 2007). Finnish resistance to nuclear power has been rated low in international comparison (Rucht 1997, 283). Moreover, the relative silence of Finns with regard to the development and introduction of gene technology has been striking, while at the same time fierce public controversy about it has raged in other parts of Europe. Finns have seemed to accept their public authorities and experts in spite of top down biotechnology policy, when similar policies pursued by their counterparts in many other countries have met with increased distrust and criticism (Rask 2008a, 42). In the case of information technology Finns have not only been trustful but have eagerly utilized it (e.g. Nokia s mobile phones). Finland s exceptional stance may be accounted for by a political culture and an attitudinal climate which frame the opportunity structure of political decision makers. Where citizens trust in expert knowledge has generally decreased (e.g. Rask 2008b, 77), Finns trust firmly, even increasingly, in 5

6 scientific institutions, (Science Barometer 2007). Whereas in per cent of Finns accepted and 47 per cent opposed construction of a new nuclear power plant, in 2007 the order was reversed; 43 per cent agreed but 35 per cent disagreed. On the other hand, since the early 1980s at least two thirds of Finns have agreed with the statement that citizens opinions have not been heeded sufficiently in the matter of energy policy decisions (Energy Attitudes 2007). Moreover, Finns trust in political decision makers is exiguous by international comparison (Paloheimo 2006). Thus, the tension between representative democracy and expert knowledge and power emerges in energy policy making, which is commonly seen as a policy sector dominated by experts (e.g. Chubb 1983, ). 3. The coherence of the elites The existence of an elite cannot be attested by the fact that power is concentrated in the hands of a small group of people who take care of day to day decision making. This is the case in practically all modern societies (e.g. Birch, 2001, 186). The essential criterion for the existence of an elite is that it constitutes a cohesive, unitary and self conscious group. These characteristics are to be found in almost all elite definitions, and theories of elites and empirical research on them have typically described an closed elite in terms of the three Cs (Meisel, 1958, p. 361): group consciousness, coherence, conspiracy, the last mentioned implying a common will to action rather than secret machinations (Parry, 1969, 31 32). 1 We may modify the presentation of John Scott (1991, 119) and cross tabulate the variables of exclusiveness, cohesion and unanimity as shown in Figure 1. The first dimension in the typology is the openness of the elite structure, which may vary from low, elites being recruited from one single social stratum, to high, where elites are not dominated by any single stratum. The degree of openness also implies the circulation of elites, which is vital for both their renewal from the people and the implementation of stable and effective decision making. Figure 1: Types of elite structures 1 For a more detailed discussion of the theoretical approach, see Ruostetsaari

7 DEGREE OF COHERENCE high low DEGREE OF low Exclusive Segmented OPENNESS IN RECRUITMENT high Inclusive Fragmented Source: Ruostetsaari 2006 The second dimension, i.e. the degree of coherence, combines the variables of cohesion and unanimity. These two elements may in principle be contradictory, close interaction being possible a result not only of unanimity but also of conflicts, i.e. dogfights between elites on various arenas. Nonetheless, conflicts are generally more likely to reduce interplay between elites than to increase it. Especially in highly consensual societies such as the Finnish (e.g. Arter 1999), close cooperation between elites is a result of mutual consensus, not of conflict. The coherence of elites, which researchers in the field have also termed elite integration, has two elements, i.e. interactive and normative (Burton & Higley 2001; see also Higley & Moore 1981; 2001). In the terms of Figure 1 an elite structure is highly coherent if its members have close interaction with each other and if they share the same opinions, attitudes and values. In other words, close interaction implies cooperation among elites, not conflict resolution. Moreover, such coherence is also fostered by weak vertical contacts of the elites with the people, since demands and control from below cannot undermine the mutual cohesion of elites by creating conflicts between them and playing them off against each other. Normative coherence of elites may be seen as a short attitudinal distance between various elite groups and a wide distance between the elites and the population. 4. Research questions The purpose of this study is to assess the extent to which new rules of the game and a globalized context have transformed the power structure of Finnish energy policy making and whether the most influential actors constitute a coherent energy elite. The study is divided into two parts, the 7

8 composition and the coherence of the energy elite. Firstly, we will consider whether the transfer of Finnish energy policy from the phase of regulation through deregulation to the phase of rederegulation has altered the power structure of energy policy making. Secondly we will explore the coherence of the Finnish energy policy elite in the late 2000s. In this second part we will focus on the interaction networks between the elite groups (cohesion), which together constitute the energy elite, as well as to the attitudinal unanimity within the elite and between the elite and the population. With regard to attitudinal unanimity we apply three indicators, that is, structured questions which were presented identically to both elite and population: views on power wielding in the matter of decision making in Finnish energy policy making, normative principles concerning energy policy making and views on the utilization of various energy sources in the future. 5. Data Methodologically this study was based on three sets of data focusing on five almost identically defined groups of the energy elite, i.e. decision makers and leading experts representing political parties, civil servants working in various ministries and public agencies, energy producers and associations (ranging from municipalities to big firms), industrial firms and business associations and civic associations (including environmental protection associations). The first set was collected via a structured postal survey involving 21 respondents in January 1987, at the phase of the Finnish energy policy making characterized by regulation (Ruostetsaari 1989). The second body of data was based on semi structured elite interviews conducted with 28 respondents in September December 1997, at the moment when the first experiences were acquired from the deregulation policy. The third elite data set was collected between December 2008 and March 2009, and the number of respondents in the semi structured elite interview was 24 (7 firms, 5 energy organizations, 3 civic associations, 4 civil servants, 5 MPs). This phase in Finnish energy policy making can be characterized as the initial stage of re deregulation. I personally made all of the elite interviews. The array of the elites interviewed in all three studies is based on the positional approach which was supplemented with the reputational approach (see Hoffman Lange 1987; Moyser & Wagstaffe 1987). 8

9 The fourth set of data in the present study was based on a postal survey conducted among an ordinary random sample representing year old Finns. The field work, including one reminder round, was carried out inmay October Even if the rate of response was rather low, 30.0 per cent, and the data deviated in minor respects from the population data as a whole, the large size of the sample (N=4000) ensured that the information acquired adequately represents the Finnish population at large. 2 This postal survey constitutes a part of a research project funded by the Academy of Finland research program Power and Society in Finland. The tables in the study were based on identical structured questions which were presented both to the elites in and the population sample in Transformation of the power structure According to a study based on expert interviews (politicians, civil servants, energy production firms, associations of energy production, employers and civil society), the most influential group of actors in the field of Finnish energy policy making, that is the energy elite in 1987, comprised two leading Cabinet parties, the Social Democrats and the Centre Party, three public authorities (the ministries of Trade and Industry, Finance and the Environment), two state owned energy producers (electricity: Imatran Voima Ltd, oil and natural gas: Neste Ltd) and one private electricity producer (Pohjolan Voima Ltd). The position of state owned energy producers in the energy elite in based not only on their ownership but also their monopoly position in the national transfer of electricity, import of electricity, oil and natural gas and their klientela and parentela relationship (La Palombara 1965, ) to the energy administration and Parliament. Private industry was represented in the energy elite by Nokia Ltd. Of relevant associations were included the Co operation Delegation of Electricity Producers (STYV), the Central Association of Finnish Industry (TKL) and the Central Association of the Finnish Forest Industry (SMKL). STYV was a coordination and planning organization established by state owned and private electricity producers in order to block governmental control of the electricity system. As a result of this self coordination of electricity 2 For a more detailed description of the data, see Ruostetsaari 2009,

10 producers the governmental planning system concerning electricity production and transfer was superseded. The research institutions were represented by the state owned Technical Research Centre of Finland (VTT) and the private Ekono Ltd. The first was regularly consulted by the energy administration and energy producers and the latter by the industry (Ruostetsaari 1989, ). Despite the deregulation and liberalization of the electricity markets in the mid 1990s the composition of the Finnish energy elite changed only marginally in a decade. According to expert interviews, the number of actors included in the most influential group even decreased in As Finnish policy making was firmly led by the Cabinet, the Centre Party was replaced by the Conservatives in the energy elite, as was also the case in the Cabinet coalition. The Social Democrats preserved their influence. Moreover, the ministries of Trade and Industry, Finance and the Environment, as well as both research institutes, held their position in the energy elite. TKL and the Central Association of Employers were merged as The Central Association of Finnish Industry and Employers (TT). As the lobbying of the whole industrial sector in the field of energy policy was concentrated in TT, its influence increased compared to its predecessors. In consequence of this merging and the fact that the role of Pohjolan Voima Ltd as an energy lobby for the forest industry also increased, the role of SMKL decreased. STYV, representing Imatran Voima Ltd, industrial electricity producers and municipal electricity works, was discontinued as a result of the abolition of the governmental planning and regulation system. The position of Nokia, nowadays Finland s biggest company in terms of net revenue ( million in 2008) and personnel ( ), in the energy elite of the late 1980s was based on the fact that it was engaged in the paper industry and owned shares in energy producing companies. By the late 1990s Nokia had backed out of these energy intensive industries and invested strongly in electronics, which is a much less energy intensive sector. Thus, it could no longer be included in the energy elite but, due to its very important role in Finnish export and the national economy, in the elite of industrial policy. Two state owned energy companies, Imatran Voima Ltd and Neste Ltd, were merged as Fortum Ltd in 1997 (Ruostetsaari 1998, ). 10

11 Moreover, the Finish Energy Industries Federation (FINERGY), which was established in 1997 by assimilating associations representing electricity production, transfer, sale and employer duties, the Finnish Electricity Association (SENER) (distribution of electricity), ÖKL (association representing production, import and distribution of oil and natural gas) and Vapo Ltd (state owned peat producer) were not placed in the core of energy elite but in the second circle (Ruostetsaari 1998, 224). In what direction has the power structure of Finnish energy policy making changed since the late 1990s? The interviewed decision makers and experts, that is the energy elite and the population, were asked in an identically structured questionnaire to what degree do the following actors influence decision making on Finnish energy policy. 3 Of the 31 listed institutions 13 formed the influential group in the sense that the decision makers ranked them as influential rather than uninfluential. In the population s evaluations this group comprised 16 institutions. Table 1: The proportions of the population and the energy elite who rate institutions (very or somewhat) influential in Finnish energy policy making (%) Institution Elite Population Difference (E P) Ministry of Employment and the Economy Cabinet European Union Energy producer firms Parliament Ministry of Finance Forest Industry firms Big firms Mass media Ministry of the Environment Metal industry firms Civic associations Employer organizations Governmental research institutes Ministry of Agriculture and Forestry International Energy Agency (IEA) Universities and polytechnics International Atomic Energy Agency (IAEA) Response alternatives were very much, fairly much, fairly little, very little, and can t say. which are combined into three alternatives in Table 1. 11

12 Consumers/citizens OECD Employee organizations Private research institutes Municipal administration Ministry of Transport and Communications Regional councils Electronics industry firms Ministry of the Interior Ministry of Foreign Affairs Ministry of Social Affairs and Health Ministry of Defense N= In the elite evaluation the most influential group in Finnish energy policy making was composed of five circles. The innermost core comprised only the Ministry of Employment and the Economy (MEE), which was formed at the beginning of 2008 by merging the Ministry of Trade and Industry and the Ministry of Labour (called super ministry ). This agency is responsible for the preparation and implementation of energy policy. The second circle comprised Cabinet and the European Union, while energy producer firms, Parliament, the Ministry of Finance, forest industry firms and big firms belonged to the third circle of influence. The fourth influential group was composed of the mass media, the Ministry of the Environment and metal industry firms, the fifth of civic associations and employer organizations. When the elite members were asked in an unstructured question to name the five most influential institutions, the ranking was almost the same: Cabinet, MEE, European Union, Parliament and energy producing firms. Big firms, which also covered large energy users, was now ranked as almost as influential as the energy producers However, the energy elite of the period of re deregulation cannot be construed directly on the grounds of the above mentioned rankings, as part of the listed were actors but other were institutions. A more detailed analysis of the composition of the energy elite in 2009 can be carried out on the basis of the elite interviews. Despite new rules of the game (from regulation via deregulation to re deregulation) and the globalization of the Finnish energy sector, that is annexation to the EU and the establishment of 12

13 Finnish energy producers abroad and vice versa, the composition of the energy elite was fairly stable in The most important change concerned the Europeanization of domestic energy policymaking. Finland became a member state of the EU in 1995, and since then its role has increased significantly in Finnish energy policy as it pertains to environmental policy. When the Social Democrats lost their Cabinet position after the general elections 2007, they also lost their position in the energy elite and the Centre party regained its position and command of the super ministry. All three ministries of Employment and the Economy, Finance and the Environment likewise retained their elite positions. Of electricity producers and wholesalers Fortum Ltd and Pohjolan Voima Ltd preserved their elite positions. Moreover, as a result of the dissolutions of the fusion between Fortum and Neste Ltd in 2005 the last mentioned reverted to elite position. The influence of interest groups in energy policy making has increased as a result of the merging of associations, so that now the Confederation of Finnish Industries (EK) and the Association of Finnish Energy Industries (ET) can be included in the energy elite. EK was established by merging TT and sectoral business associations. For instance, ET and the Forest Industries are member associations of EK. ET is a new industrial policy and labour market policy association which was established in 2005 by merging FINERGY; SENER, the Finnish District Heating Association (SKY) and the Finnish Association of Energy Employers (ENERTA). The Technical Research Centre of Finland (VTT) preserved its position in the energy elite even if it seems almost to have lost its monopoly position as a governmental energy consultant. The private consulting firm Ekono Ltd seems even more to have forfeited its role, and can now no longer be included the energy elite. These institutions belonging to the core may be called core insider groups : they are influential and regularly consulted by the Government on a broad range of energy policy issues (Maloney et al. 1994, 30). Below this inner core of the energy elite can be found a second circle composed of the electricity wholesaler Vattenfall Ltd (a Swedish state owned company but producing electricity also in Finland) and the German Eon, which also maintains electricity production in Finland and has applied for a license together with some Finnish firms for constructing a new nuclear power plant in Finland (FENNOVOIMA). Even if interest intermediation is channeled mainly through interest groups, EK and ET, big firms representing energy intensive business such as the forest industry 13

14 (e.g. StoraEnso, UPM, M Real) and metal industry (e.g. Outokumpu, Ruukki) can also independently influence energy policy making. With regard to chances for increasing the share of renewable energy it is important to note that as much as 70 per cent of it was produced by the forest industry as a side product, and now the whole industry is facing serious problems due to the global recession. The state owned peat producer Vapo Ltd can also be included in this second circle of influence. The actors included in this circle may be called specialist insider groups in that they have a more specific interest in restricted policy areas but are seen by policy makers as a reliable and authoritative source of information in these niches. They are likely to be consulted routinely on most issues, even though policy makers realize that their significant influence is confined to a particular topic. (ibid). In the late 1980s the mass media did not function as an independent counterforce to pivotal energy policy actors. Energy issues which were raised for public debate were largely determined by energy experts and cabinet parties. In the late 1990s the situation was mainly the same. However, the emergence of the environmental viewpoint in energy policy discussion through the mass media has diversified the discussion and defined the elbow room for energy policy making. However, it has been estimated that as a result of increasing market competition in the energy sector, it is likely that the role of the mass media will be emphasized as an arena for business competition (Ruostetsaari 1998, ). In the late 2000s this prognosis seems to have come true. As much as 29 per cent of the energy elite viewed the mass media as highly influential and 50 per cent as somewhat influential in energy policy making. Moreover, in a internet survey conducted in late 2008 among various Finnish elites (elites of the labour movement, business, administration, civic associations, police and judiciary, politics and research, N= 376) 63 per cent agreed with the statement the attitude of the mass media to the utilization of various energy sources significantly affects the formation of Finnish energy policy. The proportion was highest among the research elite, 72 per cent. 4 The influence of the mass media experienced by the elites can be explained by the fact that the dependence of the mass media on energy producers and business as information sources has 4 Agree totally 11 %, agree partly 52 %, disagree partly 31 % and disagree totally 6 %. 14

15 decreased. The importance and legitimacy of the environmental authorities and associations as information sources has increased as a result of the increased social weight of environmental policy. Moreover, the citizenry trust more both in research institutes and environmental authorities and associations than in the energy authorities and energy producers as sources of energy information. Despite increased influence the mass media do not have their own agenda in energy policy. They remain an instrument which actors can utilize in energy policy debate. Thus, the mass media cannot be included in the energy policy elite as an institution. However, when the elite members were asked in an unstructured question to identify the institutions which have increased their influence on energy policy making since the mid 1990s, the mass media were incorporated in this group together with the Ministry of Employment and the Economy (MEE), the Cabinet, the European Union and energy producer firms. Parliament was generally seen to have lost some of its influence. In the cases of two institutions, the Ministry of the Environment and civic associations, evaluations polarized. Even if it was generally acknowledged that the social importance of environmental policy, especially due to the intensified debate on climate change, some elite members argued that the Ministry of the Environment possess only few formal powers in energy policy making even if it is in charge of international climate negotiations. As MEE is in charge of the preparation of energy policy (especially National Climate and Energy Strategy in 2008) and represents the country in EU dealings with energy issues, the domestic role of the Ministry of the Environment has even been reduced. By contrast, some elite members were of the opposite opinion: by reason of its formal powers in environmental impact assessment, land use planning and construction licenses for power plants, the influence of the Ministry of the Environment has even been enhanced. Thus, in terms of the weakness and strength of the state at sectoral level (Atkinson & Coleman 1989, 51) 5 we may 5 In the strong state the ultimate decision making power is concentrated in the hands of a relatively small number of officials and, secondly, the degree to which these officials are able to act autonomously. Normally, power will be concentrated when a single agency or bureau (of the several that are active) is able to dominate relations in a given sector. Such a bureau would have the capacity to aggregate authority from regional instances of government and draw information from sectoral actors, whether firms or interest associations. In contrast, the state is weak in a given sector when authority is dispersed and no one group of officials can take the lead in formulating policy. Under these circumstances, authority is typically diffused among several bureaux and between levels of government resulting in overlapping jurisdictions and bureaucratic competition. (Atkinson & Coleman 1989, 51). 15

16 conclude that the Finnish energy sector can be still characterized by a strong state even if centralization has slightly decreased. Moreover, some elite members argued that the influence of environmental protection associations had increased significantly due to global concern over climate change, which as a result of they are regularly consulted by the Cabinet and ministries. By contrast, other elite members admitted that while environmental associations are consulted their opinions have not been taken into account. In other words, their actual effect on energy policy making has remained marginal. This view was even shared between some elite members representing energy production and environmental protection. The role of the Finnish environmental protection associations was seen to be lesser in social debate than what their sister associations enjoy in Scandinavia, Great Britain, the Netherlands and Germany. This was explained by the fact that Finnish civil society is to some extent weaker than that in many Western democracies. The interviewed elite member referred to the debate in Helsingin Sanomat (the largest newspaper in the country) in 2008, where the Korhola couple (MEP and Professor of Climate Change) argued that in terms of climate and energy policy Finland was tied to environmental associations strings: I was thinking, are there any examples of decisions in which viewpoints of civic associations had affected the outcome. I couldn t discover any case where civic associations would have changed the plans of civil servants and politicians. We have very institutionalized and developed consultation procedure but the effect of this hearing of interest groups is marginal in many cases. In some countries there are not necessarily as many hearing processes as in Finland but there the pressure coming from civic associations effect de facto decision making. In this respect our democracy is quite different compared to many other countries. There is one circumstantial factor: our means of livelihood. Finland is one of the most energy intensive and heavy industry intensive by the business structure in the western industrial countries. It would be a surprise, if this don t have any effect. It has given actors, whose interest is to get cheap electricity and energy in the long run, much more political influence than in many other countries. Another elite member explained the weakness of the Finnish environmental associations by their consensual strategy: The Finnish civic associations differ in that sense from their Swedish and German colleagues that they are co operative in character. In other words, the political style of the Finnish environmental associations was seen to be less aggressive towards the government: In Sweden or Germany it cannot be conceived that the Greens as a member of the Cabinet coalition would participate in decision making dealing with constructing nuclear power or that we 16

17 can discuss with the Finnish Association for Nature Conservation or that we can have joint projects with it. In Germany it would be totally out of the question. This interviewed elite member admitted that the influence of environmental associations is not very conspicuous, but they may, in fact, be influential due to their long standing lobbying strategies. However, this concerns mainly the Finnish Association for Nature Conservation (SLL), which was established as early as 1938 as a scientific association for nature conservation. In other words, its history does not date back to the radicalism or resistance to nuclear weapons or power in the 1960s and 1970s. SLL may be called a peripheral insider group. The term refers to those groups found on consultation lists and granted a cosmetic type status of insiders, but whose influence over policy development will be marginal at best (Maloney et al. 1994, 32). Other environmental associations active in Finnish energy policy, e.g. Greenpeace, WWF and Friends of Earth can be seen as outsider groups in terms of their influence, but not of their own strategic choice. For instance, even Greenpeace has had in a certain extent to adjust its lobbying strategies to the Finnish consensual political culture. So far we have charted the composition of the Finnish energy elite on the institutional level. As regards the individual level, 14 different persons were mentioned as influential by the energy elite. However, most names were mentioned only one or two times and the inner core of most influential actors comprises only four men: Mauri Pekkarinen (Minister of Employment and the Economy, Centre party), Mikael Lilius 6 (CIO of Fortum Ltd, state owned electricity producer), Timo Rajala (CIO of Pohjolan Voima Ltd, electricity producer owned by the private forest industry) and Taisto Turunen (Head of the Energy Department at the MEE). Their membership in the inner core of energy policy is based on their positions in influential institutions; there was no eminence grise. Pekkarinen was seen as an exceptionally energetic and competent head of the ministry. Turunen has been the highest civil servant in the field of energy policy for decades. Lilius and Rajala were not only CIOs of large energy producers but had also functioned as presidents of energy associations. The small size of the inner core and the positional basis of influence was not only characteristic of energy policy making but more generally the Finnish elite structure and political 6 Even if Mikael Lilius was generally ranked as one of the most influential actors (mainly due to the position of Fortum), two respondents did not evaluate him as an opinion leader in energy policy but a generalist as a business manager. If fact, he moved to Fortum from Sweden, where he functioned in a medical instrument business. Lilius resigned in May 2009 as a result of an option scandal. 17

18 culture (Ruostetsaari 2003). In fact, it seems that the general trend is as one interviewed elite member put it for leadership by individuals to be changed to management by issues as a result of globalization and Europeanization. For instance, the content of the Finnish Climate and Energy Strategy was de facto determined mainly by the EU targets, not by domestic institutions and individuals. 7. Unanimity of the energy elite 7.1. Power conceptions In terms of the wielding of power in Finnish energy policy making the list of the most influential institutions was more or less identical between the elite and the citizenry. The only difference in tht case of the Top5 was that the elite stressed the influence of the Ministry of Employment and the Economy while the citizenry emphasized the role of big firms (Table 1). The greatest difference between elite and citizenry concerned civic associations, the MEE, employer organizations, the Ministry of Finance and the mass media, the elite stressing the influence of these institutions significantly more than the citizenry. On the other hand, the citizenry emphasized relatively more than the elite the influence of political institutions (Cabinet, Parliament), international organizations (IEA, IAEA, OECD) and some ministries. In fact, the formal powers of the two lastmentioned were more or less exiguous in energy policy making. The most interesting findings concerned the differences between elite s and citizenry views on the influence of civic associations and to a lesser extent political institutions. How may we explain these differences? The elite s stress on the great influence of civic associations can be accounted for by the fact that especially the environmental protection associations were seen to exert an effect on public debate and political decision makers via the mass media, which circumscribed the elbow room of energy producers and business in energy policy lobbing. Even if people perceived political institutions to be the most powerful actors in energy policymaking, they were nonetheless skeptical as to their chances to exert influence through political institutions. As many as 67 per cent of Finns said that citizens opinions have not been considered 18

19 sufficiently in energy policy decisions (Energy Attitudes 2007); 25 per cent acknowledged but 61 per cent denied that energy issues had affected their electoral choices in the general elections of In per cent of Finns felt that voting in elections is a useful channel for influencing energy policy, while 38 per cent felt it to be useless. Ranking of consumers/citizens was strikingly high on both lists compared to many power studies where citizens have ranked themselves as the least influential institutions (e.g. Ruostetsaari 1993; 2006). In fact, our present data indicate that citizens feel as political consumerism suggests (Micheletti, 2003) that they can influence energy policy making more as consumers through their consumption choices than as citizens by voting in elections, through contacts with politicians and civil servants or acting in civil associations (Ruostetsaari 2009). This contradiction may be accounted for by the Finnish political culture: Finns can be characterized in international comparison concurrently by a high trust in the authority of institutions, even political, 7 and a low sense of civic efficacy, that is, distrust in their own chances to influence institutions (e.g. Paloheimo 2005). Unanimity between the elite and the citizenry as well as unanimity within the elite can be measured in the following by an index: (very much % + fairly much %) (fairly little % + very little %)/N. The higher the index, the more unanimous the elite or the citizenry is. For instance, if all respondents viewed that Parliament wield very or fairly much (or little) power in energy policymaking, the index score will be 100. As the index score of the elite was 61.9 and that of the citizenry 33.7, the energy elite were much more unanimous or cohesive than the population at large in terms of power conceptions. The cohesion within the elite was much higher than that between elite and citizenry, and the elite can be seen as fairly cohesive: politicians 69.0, firms 68.2, civic associations 65.3, energy associations 63.9 and civil servants The finding was quite extraordinary. Even if politicians represent different political parties, this sub elite was the most cohesive while the sub elite composed of civil servants was the most heterogeneous. At least partly the lesser cohesiveness of the bureaucratic sub elite can be explained by its composition: traditionally the approaches of the Ministries of the Employment and the Economy and Environment to energy policy have been 7 The citizenry were also asked in a questionnaire, to what extent they trusted in institutions as sources of energyrelated information. Cabinet and Parliament were rated as belonging to the most trustworthy institutions immediately after universities, governmental research institutes and the Ministry of the Environment. 19

20 somewhat different. In terms of Figure 1, as the difference between the elite and the population was wide and the index scores were high among the sub elites and the differences between them were small, the elite can be seen to be cohesive Normative principles of energy policy making The energy elite and the citizenry were presented a structured question: How important do you rate the following principles concerning decision making in energy policy? The most significant difference between the elite and the citizenry concerned the role of politicians and experts in the decision making process. While the elite stressed the importance of the institutions of parliamentary democracy, the citizenry exhibited distrust in these. While as many as 90 per cent of the citizenry felt that experts should be in charge of the decision making, only 38 per cent of the elite were of same opinion. By contrast, 92 per cent of the elite considered it important that those politically responsible to the constituency should be in charge of decision making, as against only 54 per cent of the population. In fact, citizens stressed more the role of firms than politicians in decision making (Table 2). Table 2: The proportion of the population and the energy elite who perceived some principles as (very or somewhat) important in the context of the decision making inenergy policy (%) Elite Population Difference (E P) Decisions should be announced as openly as possible Experts should be in charge of the preparation of decisions Social effects of decisions should be taken substantially into account Decisions should take account of various interest groups Environmental effects of decisions should be taken substantially into account Those politically responsible to the constituency should be in charge of decision making

21 The preparation process of decisions should be open Citizens should be able to influence decisions Experts should be in charge of decision making Representatives of firms should take part in decision making Business organizations should play a central role in the decision making Decisions should be made by general consent as a result of negotiations Environmental organizations should play a central role in decision making Energy policy should be determined free of state direction N= As many members of the energy elite function as lobbyists it is no surprise that they stressed more than the citizenry the role of business organizations and interest groups in decision making. However, the elite and the citizenry experienced the role of firms and the population fairly identically. Also in terms of normative principles guiding energy policy making the elite were more unanimous than the citizenry. The cohesion index 8 of the elite was 66.4, and that of the citizenry Again the elite were more cohesive than the population, even if now the difference was much smaller than in the case of power conceptions. Within the energy elite the political sub elite was again clearly most unanimous (77.1), the business elite second unanimous (69.4) and the bureaucratic sub elite most heterogeneous (64.3). The index score of energy associations was 68.6 and of civic associations (very important % + somewhat important %) (somewhat unimportant % + totally unimportant %)/N 21

22 7.3. Views on utilization of various energy sources in the future The energy elite and the population were presented with a structured question: In what direction should the utilization of the following energy sources be developed? Response alternatives were increase substantially, increase a little, nowadays appropriate, curtail a little, curtail substantially, close down totally, can t say (Table 3) 9. Table 3: The proportion of the population and the energy elite who preferred to increase (substantially or somewhat) utilization of various energy sources in the future (%) Energy source Elite Population Difference (E P) Wind power Biogas Wood Nuclear power Solar energy Hydrogen Hydroelectric power Field plants Peat Natural gas Coal 4 4 Oil 3 3 N= The energy elite advocated increasing the utilization of almost all renewable energy sources much more than the citizenry. This can be explained by the challenging target which the EU defined for Finland in 2008: the proportion of renewable energy should be increased from 28.5 per cent (2006) to 38 per cent by Likewise, the elite preferred to curtail utilization of fossil fuels more than the citizenry. However, the largest difference concerned the future of nuclear power, which has been the most heated theme in the Finnish energy policy debate. 10 While 84 per cent of the elite wanted to increase utilization of nuclear power, the proportion among the citizenry was only 43 9 The Finnish total energy consumption in 2008 was by source: oil 25 %, wood fuel 21 %, nuclear power 17 %, natural gas 11 %, coal 10 %, peat 6 %, hydroelectric and wind power 4 %, net import of electricity 3 % and others 2 % (Statistics Finland 2009). 10 According to one interviewed elite member, the proportion of nuclear power has been 10 per cent of energy production but 90 per cent of energy debate! 22