Unknown Territory – Uncertainty in a transformative process of political practice

The Remunicipalisation of the Energy Distribution Grids in Hamburg, Germany

M.Sc. Thesis Environmental Policy Group, Wageningen University

Martin Bosak M.Sc. Climate Studies

Student number: 891124-105-040

Contact: [email protected]

Course code: ENP-80436

Thesis supervisor: Ingrid Boas

Second Reader: Kris van Koppen

Submission: 12.06.2017

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Abstract

Uncertainty is an omnipresent phenomenon that challenges political decision-making in face of complex problems. With regard to the looming threat of climate change, uncertainty seems to paralyse political action, since decision-makers appear to be overwhelmed by the complexity of the problem and find themselves trapped in an ingenuity gap. In order to overcome this ingenuity gap and the general cognitive dissonance in face of climate change, this work emphasises the need to understand the role functioning of uncertainty within transformative political processes. By examining the transformative process of the remunicipalisation of energy distribution grids in Hamburg, Germany, this thesis goes beyond the conceptual level and seeks to determine the role and functioning of uncertainty in a real world process of political practice. In order to reveal the presumed causal inference of uncertainty, explaining-outcome process-tracing is applied as a methodological framework in combination with an interpretative approach to analyse the empirical data of 13 qualitative interviews. In the empirical analysis it was possible to establish uncertainty as the causal mechanism in the remunicipalisation process in Hamburg, determining a minimally sufficient explanation for how uncertainty affected the outcome of this process. The identified findings on uncertainty confirm that uncertainties are inherent to transformative processes and cannot be avoided. This makes it necessary to ‘embrace uncertainty’ and perceive it as a mode for change that encourages the taking of decisions and should not be perceived as an enemy to decision-making or climate science. Wageningen University ii MSc. Thesis Environmental Policy Group

Contents

1 Introduction ...... - 1 -

1.1 Research objective and research question ...... - 3 -

1.2 How to read this report ...... - 4 -

2 The academic notion of uncertainty ...... - 5 -

2.1 Quantifiable uncertainty and its limitations ...... - 6 -

2.2 Qualitative uncertainty ...... - 8 -

2.3 The uncertainty concept at the climate science policy interface ...... - 12 -

2.4 Embracing uncertainty for effective climate policy action ...... - 18 -

2.5 Uncertainty – a mode for change ...... - 20 -

3 Method ...... - 22 -

3.1 Process-Tracing ...... - 22 -

3.2 Explaining-outcome process-tracing ...... - 26 -

3.3 Data gathering ...... - 28 -

3.4 Data Analysis ...... - 32 -

4 The Energy Transition and the Remunicipalisation Process in Hamburg ...... - 34 -

4.1 Energy distribution grids and regulations in Germany ...... - 34 -

4.2 The German Energy Transition (Energiewende) and its link to the Remunicipalisation in Hamburg ...... - 37 -

4.3 The Remunicipalisation of energy distribution grids in Hamburg ...... - 41 -

4.3.1 Phase I (June 2010 – September 2013) ...... - 43 -

4.3.2 Phase II (September 2013 – December 2016) ...... - 47 -

4.3.3 Phase III (from December 2016) ...... - 50 -

5 The notion of uncertainty in a process of political practice ...... - 51 -

5.1 Hypothesising the causal-mechanism of uncertainty ...... - 51 -

5.2 Findings on uncertainty in the remunicipalisation process ...... - 56 -

5.2.1 Uncertainty in Phase I ...... - 62 - Wageningen University iii MSc. Thesis Environmental Policy Group

5.2.2 Uncertainty in Phase II ...... - 70 -

5.2.3 Uncertainty in Phase III ...... - 76 -

5.3 Synthesis of results ...... - 79 -

6 Discussion ...... - 82 -

6.1 Methodological reflections ...... - 82 -

6.2 Conceptual reflections ...... - 84 -

7 Conclusion ...... - 88 -

7.1 Recommendations ...... - 90 -

References ...... - 91 -

Annex – semi-structured interview guideline ...... - 101 -

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List of figures

Figure 1: The academic notion of uncertainty based on a critical literature review after (Grant & Booth 2009) ...... - 6 - Figure 2: Synthesised uncertainty matrix by (Kwakkel et al. 2010) ...... - 9 - Figure 3: Indirect relationship of perceived scientific agreement with climate policy support (adapted from Ding et al. 2011: p. 462) ...... - 13 - Figure 4: Effect of current pledges and policies on global temperature (Climate Action Tracker 2016a) ...... - 14 - Figure 5: Emissions Gaps November 2016 (Climate Action Tracker 2016b) ...... - 15 - Figure 6: Example of Dynamic Adaptive Policy Pathways in a Climate Adaptation map (Haasnoot et al. 2013)...... - 19 - Figure 7: The idea of ‘embracing uncertainty’ building on the academic notion of uncertainty ..... - 20 - Figure 8: Empirical process-tracing tests for causal inference (Collier 2011: p. 825)...... - 26 - Figure 9: Inductive research pathway in explaining-outcome process-tracing (adapted from Beach & Pedersen 2013: p. 20) ...... - 27 - Figure 10: The structure of the gas and electricity sector into production, market and monopoly in Germany. Own elaboration based on Göken et al. (2009: p. 13)...... - 35 - Figure 11: The three phases of the remunicipalisation process in Hamburg ...... 42 Figure 12: Our Hamburg – Our Grid formed by six core organisations and over 50 supporting organisations...... - 43 - Figure 13: The hypothesised causal mechanism of the energy grid remunicipalisation in Hamburg- 54 - Figure 14: Inductive research pathway in explaining-outcome process-tracing (adapted from Beach & Pedersen 2013: p. 20) ...... - 55 - Figure 15: Overview of all assigned codings on uncertainty in the interview data ...... - 56 - Figure 16: Code relations in Phase I: number of coded statements on uncertainty within Phase I extracted from the interview material...... - 62 - Figure 17: Code relations in Phase II: number of coded statements on uncertainty within Phase II extracted from the interview material...... - 70 - Figure 18: Code relations in Phase III: number of coded statements on uncertainty within Phase III extracted from the interview material...... - 76 - Figure 19: Synthesis of uncertainty as causal mechanism ...... - 79 - Figure 20: Uncertainty check-list guiding the conceptual reflection ...... - 85 -

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List of tables

Table 1: Exemplary statements on the level of uncertainty ...... - 10 - Table 2: List of Interviewees ...... - 29 - Table 3: This table depicts a general summary of the findings on the role of uncertainty in the remunicipalisation process, including codes, code descriptions and examples...... - 61 - Wageningen University vi MSc. Thesis Environmental Policy Group

List of abbreviations

BMBF Federal Ministry of Education and Research BMUB Federal Ministry for the Environment, Nature Conservation and Nuclear Safety BMVBS Federal Ministry on Transport, Building and Urban Affairs EU European Union EU ETS European Emission Trading Scheme GDP Gross domestic product GHG Greenhouse Gas IPCC Intergovernmental Panel on Climate Change NDCs Nationally Determined Contributions SRC Stockholm Resilience Centre UNDP United Nations Development Programme UNFCCC United Nations Framework Convention on Climate Change Wageningen University - 1 - MSc. Thesis Environmental Policy Group

1 Introduction

“We now live in a world of uncertainty” (UNDP 2011: p. 1) concluded the United Nations Development Programme (UNDP) in face of the global challenges climate change, energy and financial crisis, food insecurity and an increasing global inequality constitute. Uncertainty is an omnipresent phenomenon, challenging policy-making. In particular with regard to complex problems like climate change, uncertainty appears as a barrier to effective actions in response. In this context, uncertainty appears as a main reason for the reluctance that can be observed in decision-making and the starting of counter-actions when facing a deeply uncertain future.

For instance, in 2016, a survey among a representative cross-section of German citizens revealed that more than 85% consider future greenhouse gas (GHG) neutrality as important. Simultaneously, only 19% of the same respondents believe that GHG neutrality can be achieved by 2100 (BMUB 2016). It seems that despite the internationally celebrated 2015 Paris Agreement, which determined a maximum threshold of 2°C global warming and additional efforts to limit global warming at 1.5°C (UNFCCC 2015), the transformative pathway to achieve either of these targets remains to a large extent unclear. In fact, within international climate policy the pledged national contributions to climate mitigation project the international community on a policy pathway of 3.9°C global temperature rise by the year 2100 (Climate Tracker 2016a). Fundamental transformative changes across the relevant sectors of energy, transport, food production and consumption are required to address climate change effectively. The realisation of these necessary transformative changes seems to remain unknown territory, exposing the blatant cognitive dissonance of international climate policy on how to implement the goals of the Paris Agreement.

There are certainly barriers inherent to political decision-making that may explain the reluctance of countries in view of implementing ambitious national climate mitigation action. For instance, these barriers exist in terms of lacking or insufficient awareness and understanding of climate change or conservative political affiliations and worldviews, e.g. a “techno-optimistic” worldview senior government and business decision-makers preserve (Rickards et al. 2014: p. 757). This contributes to intentional and unintentional “system- protection tendencies” (ibid: p. 765), making fundamental changes fairly challenging.

At the same time, the problem of climate change is so complex that political planning and decision-making gets trapped in an “ingenuity gap” (Stockholm Resilience Centre (SRC) Wageningen University - 2 - MSc. Thesis Environmental Policy Group

2010: p. 10), describing the lack of ingenuity to come up with adequate policy solutions. Climate change is an intangible problem, where solutions cannot necessarily be based on experience or pre-existing knowledge. Solutions to climate change require long-term plans that need to be continuously readjusted within an implementation process that may last over many legislative periods. This imposes an enormous complexity to policy-making and even if decision-makers seek to drive climate action forward the ingenuity gap constitutes a plausible explanation for climate change lingering on the political agenda for more than a decade already.

To overcome the cognitive dissonance and the ingenuity gap in face of climate change, this work emphasises the need to understand the functioning of uncertainty in transformative political processes. While the uncertainty concept in the academic literature at the climate science policy interface mainly remains on a conceptual level, this thesis examines uncertainty in a real world process of political practice – the remunicipalisation of energy distribution grids in Hamburg, Germany. The term remunicipalisation describes the process of repurchasing formerly privatised public services from the private sector and bringing it back into public ownership. In Hamburg, the remunicipalisation process provides an ideal scope for researching uncertainty, as it reveals the desire for transformative actions in face of a deeply uncertain future. This includes uncertainties in face of climate change and regarding the implementation of the energy transition, which led to an unprecedented civil engagement in Hamburg.

The initiative Our Hamburg – Our Grid1 sought for the remunicipalisation of the local energy distribution grids in order to regain control and shape a future of ambitious climate mitigation through the transition towards renewable energy. Direct access to the energy sector was expected to provide the basis for a rapid reorganisation in the energy sector, providing direct leverage for an effective GHG emission reduction, which is inevitable for addressing the urgent threat of climate change. The ambitious transformative goals of the citizens’ initiative correspond to the unknown territory such fundamental changes entail. While the remunicipalisation process in Hamburg determines a starting point and concrete paving stone on the pathway towards the implementation of the energy transition and climate mitigation, uncertainties persist. In fact, uncertainties are inherent to this transformative process and

1 Original in German: „Unser Hamburg – Unser Netz“ Wageningen University - 3 - MSc. Thesis Environmental Policy Group cannot be avoided. This makes it necessary to understand the role of uncertainty in these processes, what also determines the focus of this thesis.

1.1 Research objective and research question This thesis will address the following research questions: What role does uncertainty play in the remunicipalisation process of the energy distribution grids in Hamburg?

Four sub-questions contribute to establishing a conceptual and methodological framework and provide guidance with regard to the research proceeding in the empirical analysis of this thesis.

1. How is uncertainty conceptualised in the relevant academic literature? This first sub- question seeks to understand the academic notion of uncertainty as a concept within the relevant literature at the climate science policy interface. To answer this question a critical literature review (Grant & Booth, 2009) is conducted. On this basis, the conceptual framework of this thesis and the theoretical background is established, serving as an anchor point for a theoretical reflection of the empirical findings on uncertainty in the remunicipalisation process. 2. What does uncertainty entail for political processes at the climate science policy interface? This second sub-question seeks to further develop the conceptual notion of uncertainty beyond the literature review. This includes a reflection of what uncertainty entails in climate science and climate policy decision-making. 3. How to trace uncertainty in political processes? By means of this third sub-question, the central methodological preparation for the empirical analysis is established. Following the logic of the process-tracing method, uncertainty needs to be hypothesised as a so-called causal mechanism in the remunicipalisation decision in Hamburg. 4. What are the conceptual insights process-tracing uncertainty in the remunicipalisation case in Hamburg provides? As final sub-question that addresses the empirical part of this thesis, it builds on sub question three, testing the hypothesised causal mechanism of uncertainty against the empiric data material. This means examining and identifying the ways of how uncertainty might influence the remunicipalisation process in Hamburg, providing insights on the notion of uncertainty in a process of political practice. This could contribute to the discussion Wageningen University - 4 - MSc. Thesis Environmental Policy Group

and conceptualisation of the academic notion of uncertainty in the relevant academic literature.

In order to answer the main and the sub- research questions, it is necessary to reveal the potential role uncertainty plays in this process of political practice and to determine the causal inference that led to the outcome of the remunicipalisation decision in Hamburg. As a methodological framework and for the evaluation of a hypothesised causal inference that links the desired transformation of the citizens (X) with the outcome of the decision to remunicipalise the energy distribution grids in Hamburg (Y), the process-tracing method is applied. Process-tracing determines a qualitative research method that seeks to unpack the black box of the causal mechanism, functioning within the intervening process linking the independent variable (X) with the dependent variable (Y). Due to the case-centric approach of applying the explaining-outcome process tracing variant (Beach & Pedersen 2013) as a method to research uncertainty in the remunicipalisation process in Hamburg, the methodological approach is framed as a single-outcome study (Gerring 2006). The process- tracing method and the specific methodological research approach of explaining-outcome process-tracing will be elaborated in detail in chapter 3.

1.2 How to read this report In the following chapter, the academic notion of uncertainty will be distinguished on the basis of a critical literature review (Grant & Booth 2009), before introducing the idea of ‘embracing uncertainty’ as a potential mode for change (Chapter 2). The methodological framework of process-tracing the role of uncertainty within the remunicipalisation process is thoroughly outlined in chapter 3. This also includes a detailed description of how the data for this work has been gathered and analysed. In chapter 4, the link between the implementation of the energy transition and the remunicipalisation is established, before the energy distribution grid remunicipalisation process in Hamburg is outlined in detail. Chapter 5 provides the findings on the notion of uncertainty in the remunicipalisation process. In chapter 6, these results and the methodological approach are discussed and critically reflected, leading towards the conclusion. The latter is structured in accordance with the main and the sub- research questions (chapter 7).

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2 The academic notion of uncertainty

In general, uncertainty describes a “situation in which there is not a unique and complete understanding of the system to be managed” (Brugnach et al. 2008). At first, uncertainty may imply something negative. It creates feelings of unease, vulnerability and exposure. At the same time, uncertainty can be perceived as a state in which decisions need to be taken. Uncertainty also challenges political decision-makers in all three analytical dimensions of political science: policy, polity and politics (e.g. Palonen 2003). In the policy dimension, uncertainty is a matter of choices determined by various options of concrete policy-making. These options mainly emerge from questions of substance in certain policy fields, such as climate or environmental policy. The polity dimension, which primarily sets the institutional and constitutional limits to the political playing field, is mainly affected by uncertainty about legal or procedural questions. For instance, whether political decisions or actions are within a framework polity sets. Finally, within the politics dimension uncertainty arises from the difficulty to predict the outcome of political conflicts, negotiations and consensus building processes. In all three dimensions, decisions can have an effect on the political outcome. The choice of options in a political process makes uncertainty an inherent part of the latter. In contrast, a high degree of certainty does not prevent from failure either. In fact, certainty can make us even more susceptible to surprise, suddenly creating a new situation we are unprepared to cope with.

Besides these general considerations of how uncertainty may interfere in a political process, it is necessary to grasp the various notions of uncertainty in the academic literature. A critical literature review (Grant & Booth 2009) at the climate science policy interface has been conducted as part of this thesis to demarcate the various notions of uncertainty from each other. On this basis, uncertainty can be first distinguished into quantifiable and qualitative uncertainty. Quantifiable uncertainty further divides into risk and model uncertainty, while unquantifiable or qualitative uncertainty determines three conceptual dimensions, namely location, level and nature of uncertainty (Fig. 1). Wageningen University - 6 - MSc. Thesis Environmental Policy Group

Figure 1: The academic notion of uncertainty based on a critical literature review after (Grant & Booth 2009) In the following sections, these distinctions of uncertainty are further explained. First, the limitations of quantifiable uncertainty in terms of probability-based modelling approaches and risk assessments are determined, demonstrating that uncertainty is more than just a confounding variable (2.1). Then the qualitative concept of uncertainty is introduced, constituting a substantial contribution to a sound theoretical basis to explore uncertainty in policy development and decision-making (2.2). Following the distinction of qualitative and quantifiable uncertainty, the academic literature at the climate science policy interface provides insights regarding the application of the uncertainty concept in climate policy (2.3). Building on this conceptual basis, the idea of ‘embracing uncertainty’ is introduced as a proactive, flexible and adaptable approach to cope with uncertainties (2.4). With regard to complex future challenges such as climate change, ‘embracing) uncertainty’ is determined as a possible mode for change that could enable the implementation of fundamental transformations (2.5).

2.1 Quantifiable uncertainty and its limitations A vast amount of literature refers to uncertainty as a confounding variable that requires particular attention in modelling approaches or future climate change projections (e.g. Refsgaard et al. 2007; Hawkins & Sutton 2009). Probability-based calculations in climate modelling and climate scenarios seek to quantify (un)certainty and enumerate the accuracy of the results. Obtained results can then be ranked according to their likelihood of becoming reality. In practice several reference points, scenarios, models or modelling approaches are used to increase the likelihood, precision and reliability of the results, narrowing down the range of possible future climate change projections. In this notion of quantifiable uncertainty, the calculation and allocation of probabilities serve as measures to tame uncertainty. Wageningen University - 7 - MSc. Thesis Environmental Policy Group

However, it remains questionable whether it could also enable an accurate and informed creation of resilient policy responses, especially with regard to climate change.

In fact, an improved understanding of the earth system’s complexity could lead to a more comprehensive modelling of future climate change. However, it also widens the range of climate change projections, instead of narrowing them down. To attach probabilities in response merely increases the probability of the modelling results and does not allow to estimate that one future climate projection is more likely to occur than another (Clark & Pulwarty 2003). Probability-based calculations neither take potential effects of conditionality into consideration that emerge from the underlying assumptions on which a modelling design is based on.

In response, Dessai and Hulme (2004) suggest the use of conditional probabilities to still remain able to describe the likelihood of future climate instead of waiting for “the perfect information” (p. 120). While they emphasise the necessity to remain transparent about and communicate the assumptions a model is based on, this approach remains susceptible to uncertainty. Simulating a greater degree of certainty resulting from a narrowed-down range of possible future climate projections may mislead decision-making (Clark & Pulwarty 2003). This is further aggravated, as decision-makers already have difficulties in making sense of climate scenarios, their inherent uncertainties and resulting implication for policy-making (Wardekker 2011). In this context, quantifying uncertainty through probability-based climate modelling can only serve as an auxiliary construction that provides images of the future, while uncertainty about the right choices in policy-making persists.

This creates a gap at the science-policy nexus regarding the provision of sufficient and reliable guidance for decision-making, crystallising in the question asked by Lempert and Schlesinger (2002): “What actions should we take, given that we cannot predict the future?” (p. 391). In response, they suggest the development of strategies that are robust to uncertainty, enabling an adaptive and flexible decision-making that takes into account a broad range of plausible futures. However, it remains contested whether their take on robustness as being insensitive to uncertainty is in fact the case, when decision-making strategies are suggested that take into account future, thus uncertain, adjustments. To exclusively focus on decisions with a predictable outcome – if such can exist in the context of climate policy – may limit political action to a minimum effort or could even cause inactivity. At the same time, avoiding uncertainty by applying uncertainty-insensitive strategies in decision-making appears as a counterproductive effort. Wageningen University - 8 - MSc. Thesis Environmental Policy Group

Uncertainty can also be defined in relation to risk, being described as “[…] the quality of our knowledge concerning risk” (Willows et al. 2003: 43). In this understanding, uncertainty manifests itself through imprecise knowledge on risks, directly affecting the probability and the consequences a certain risk might entail. Since a risk-based assessment of uncertainty implies a state of imprecise knowledge that can be calculated and controlled (Knight 1921; LeRoy & Singell 1987; Walker et al. 2008; Lempert et al. 2004), the problematic relation between probability calculations and uncertainty becomes once again evident. Uncertainty cannot be ruled out from decision-making nor controlled in face of climate change by assigning probabilities.

Probability-based modelling approaches and risk assessments are without doubt needed to inform about possible future climate change. Yet, they appear insufficient for guiding policy- makers in their decision-making about concrete climate policy responses. At the science policy interface, the rather technical perception of quantifying uncertainty neglects essential characteristics that are covered in the qualitative dimension (Maxim & van der Sluijs 2011). This includes aspects that we cannot know, such as the exact amount of precipitation or the flow-rate of a river or do not know about yet, e.g. population growth, which need to be taken into account in future climate projections and climate policy. A quantitative focus entails the effect that climate scientists seek for certainty in their calculations, instead of understanding uncertainty as a concept to explore potential coping strategies for climate policy-making (Enserink et al. 2013). Eliminating uncertainty thus appears as a futile effort and it is inevitable to instead learn from, manage and cope with uncertainty (Spiegelhalter & Risch 2011; Van Asselt & Rotmans 1996), as well as identifying ways to communicate uncertainty in a policy relevant way (Enserink et al. 2013; van Pelt et al. 2014; Wardekker et al. 2008).

2.2 Qualitative uncertainty Understanding uncertainty as a qualitative concept can be seen as complementary, yet separated to the quantifiable type. The conceptual notion accepts the omnipresence of uncertainty and seeks to cope with it through categorisation and understanding its sources, instead of perceiving it as a confounding variable that needs to be minimised through probability assignment.

In a general way, the qualitative form of uncertainty defines itself in relation to knowledge and can be conceived as “[…] any deviation from the unachievable ideal of completely deterministic knowledge of the relevant system” (Walker et al. 2003: 5). The three main Wageningen University - 9 - MSc. Thesis Environmental Policy Group conceptual dimensions include location, level and nature of uncertainty (Walker et al. 2003; Walker et al. 2008; Enserink et al. 2013; Refsgaard et al. 2013). These dimensions serve as a basis for managing uncertainty within model-based decision support frameworks, such as policy analysis (Walker et al. 2003) and have found numerous application in different domains, including uncertainty at the science policy interface in the context of climate change (Kwakkel et al. 2010). On this basis, Kwakkel et al. (2010) developed a synthesised form of the uncertainty matrix introduced by Walker et al. (2003), comprising all three conceptual dimensions (Fig. 2).

Figure 2: Synthesised uncertainty matrix by (Kwakkel et al. 2010) Location specifies the manifestations of uncertainty in terms of the occurring context by defining the system boundaries of the model or the object of investigation, as for instance a natural, social or political context. Further locations can be defined regarding uncertainties about the properties of the applied model, e.g. how a model needs to be structured, as well as model input parameters and input data, e.g. uncertainties due to estimated input parameters. Uncertainty may also be located regarding the concrete implementation of a model, like technical restrictions, as well as within the received output data. The level and the nature of uncertainty occur in relation to any location and further define uncertainty in four, respectively three aspects. Wageningen University - 10 - MSc. Thesis Environmental Policy Group

The four levels of uncertainty unfold on a continuum between determinism and indeterminacy. These levels can be further specified constituting five intermediate stages between complete certainty and total ignorance (Enserink et al. 2013; Walker et al. 2008). For the sake of unambiguous definitions, the five levels have been reconceptualised and reduced to four (Kwakkel et al. 2010). Level 1, shallow uncertainty, refers to a state, where the plausibility, probability or general likelihood of uncertainties can still be enumerated. Level 2, medium uncertainty, ranks uncertainties of multiple alternatives on the basis of their perceived likelihood on an ordinal scale, unable to determine their relative degree of likelihood. Climate change scenarios are an example for this level. Level 3, deep uncertainty, describes a state where a ranking of uncertainties is possible, but other factors prevent it, such as conflicting interpretations of an issue by different actors. Level 4, recognised ignorance, is the strongest form of uncertainty, where it is not possible to enumerate the uncertainty of multiple alternatives, while accepting the possibility of wrong choices and surprise. For example, assigning uncertainty levels in form of exemplary statements on future sea-level rise, the interpretative value of these conceptual categorisations becomes evident (see Table 1). Especially for climate policy, awareness of these nuances in perceived and scientific uncertainty supports decision-making.

Exemplary statements on future climate impacts (sea-level rise) Level of (un)certainty

“Sea level rise may increase by 25cm” Level 1 “Sea level rise is likely to increase by a chance of 80% up to 30cm.” Level 2 “Sea level rise could increase.” Level 3 “It is not known whether sea level may rise.” Level 4

Table 1: Exemplary statements on the level of uncertainty

The nature of uncertainty divides into ambiguity, epistemological and ontological uncertainty (Fig.2). Ambiguity uncertainty comprises normative uncertainties arising from the plurality of frames that are attached to decision-making, if various actors are involved (Kwakkel et al. 2010; Bijlsma et al. 2011; Brugnach et al. 2008; de Boer et al. 2010; Dewulf et al. 2005). In other words, ambiguity uncertainty originates from a variety of possible interpretations of a situation, where not lack of knowledge but confusion is the problem (Weick 1995; Van den Hoek et al. 2014). This is particularly the case when multiple stakeholders are involved with a heterogeneous background in terms of knowledge, experience, values, opinions and expectations (Kwakkel et al. 2010). In decision-making a plurality of frames and interpretations causes uncertainty, leading to ambiguity about the right framing of a problem Wageningen University - 11 - MSc. Thesis Environmental Policy Group

(Dewulf et al. 2005). Consequently, ambiguity uncertainty is either present or absent and cannot be further specified by attaching a level to it (Enserink et al. 2013, referring to van Asselt et al. 2010).

Epistemological, short epistemic, uncertainty is mainly understood as the incompleteness or imperfection of knowledge due to limited, inaccurate or insufficient data material (Kwakkel et al. 2010; Enserink et al. 2013; Brugnach et al. 2008; Walker et al. 2003). For instance, discount rates, inflation and population growth are figures we can estimate, while knowing their exact value remains reserved to the presence. Not yet knowing such figures could lead to an inability to reduce and capture the complexity of a problem, as well as the occurrence of potential errors due to biased judgement or inadequate modelling. In a model-based decision support framework, this could ultimately cause a general inexactness of the range of estimated outcomes (Walker et al. 2003). With regard to policy-making, epistemic uncertainty also comprises the not-yet-knowing of whether a decided policy measure is effective in the future. Sometimes policy measures must first proof themselves in practice and require later readjustments. A prominent example in this regard is the European Emission Trading Scheme (EU ETS) that sought to establish a price on carbon through a cap and trade system. It was launched in 2005 based on the Directive 2003/87/EC of the EU Parliament. In a cap and trade system, setting the cap at the right level is decisive for creating a demand for allowances and consequently a positive pricing for carbon (Newell et al. 2014). However, in Phase I and Phase II the free allocation of allowances and an overestimated cap level led to a flooding of the market with an oversupply of allowances, causing prices to collapse. This experience implied a policy response of readjusting the cap level and to auction allowances instead of allocating them for free (Laing et al. 2013; Calel 2013).

Ontological, short ontic, uncertainty refers to the aspects we cannot know, since they are inherently unpredictable. Ontic uncertainty thus comprises those uncertainties characterised by randomness and chance emerging from dynamics in time, space and (natural) variability (Kwakkel et al. 2010; Enserink et al. 2013; Brugnach et al. 2008; Walker et al. 2003). Examples include the exact effect of sea-level rise, the precise increase of GHG emissions in the atmosphere or the global temperature rise, as well as more locally, the exact amount of precipitation in a certain area.

These conceptual categories constitute an important contribution to a sound theoretical basis to explore uncertainty in policy development and decision-making in a structured and analytical way. For instance, uncertainty about the dynamics of feedback mechanisms in the Wageningen University - 12 - MSc. Thesis Environmental Policy Group atmosphere can be located in the context of natural physics, while it could also be assigned to epistemic uncertainty (nature) on a medium level in terms of scenario uncertainty.

2.3 The uncertainty concept at the climate science policy interface Similar to climate science, uncertainty is an inherent component of climate policy. Under the United Nations Framework Convention on Climate Change (UNFCCC), the international community seeks for the “stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system” (UNFCCC 1992: Article 2). This definition is based on an inherent ambiguity about what dangerous anthropogenic interference means (Dimitrov 2010). Many countries interpret dangerous as an average global temperature rise of 2°C above pre-industrial levels. However, for the most vulnerable countries, small island states, a limit of 1.5°C is decisive for their future survival. With the internationally celebrated 2015 Paris Agreement the international community agreed to the maximum threshold of 2°C, while it continues to pursue the 1.5°C target to further reduce the susceptible impacts of climate change (UN 2015).

At the institutionalised intersection of climate science and policy, the Intergovernmental Panel on Climate Change (IPCC) describes the current changes in the earth’s climate system in its 5th Assessment Report (AR5) as “unequivocal” and concludes that global warming has reached an “unprecedented” scale (IPCC 2014: p. 2). In order to cope with uncertainty, the IPCC assessments follow a “speaking consensus to power approach” (van der Sluijs 2012: p. 174). Uncertainty and dissent are seen as a lack of unequivocalness that needs to be mediated towards the common denominator of consensus. In other words, the IPCC intends to solve epistemic and ambiguity uncertainty among the involved experts and within the mainstream scientific discussion on climate change to provide a common knowledge base for political policy development. Nevertheless, the IPCC approach could backlash into inactivity of policy-makers, delaying decisions and postponing their actions until certainty in form of a consensus is established (van der Sluijs 2012). In this case, the process of consensus building could paralyse decision-making and delay climate action. Moreover, the probabilistic reasoning attached to determining a consensus (e.g. Dessai & Hulme 2004) is likely to be associated with a majority forming a consensus. This could become problematic in terms of depicting uncertainty in a realistic way. While a consensus approach is capable of taking the plurality of scientific opinions into account, it risks to neglect uncertainty by excluding dissent (van der Sluijs 2012). Since the possibility for error and misjudgement can never be Wageningen University - 13 - MSc. Thesis Environmental Policy Group ruled out entirely, this could create an illusion of certainty, making decision-making particularly vulnerable to surprise.

However, scientific consensus also appears as a pragmatic approach to measure certainty in the face of climate change and may even urge climate policy to take decisions in response. In an attempt to quantify the consensus within the scientific literature on anthropogenic global warming, a review has demonstrated that about 97% of researchers around the world agree that anthropogenic climate change is the reality (Cook et al. 2014). Despite the problematic aspects of consensus building approaches, the perceived scientific agreement within society on climate change has a pivotal effect on public policy support in climate policy (Fig. 3).

Figure 3: Indirect relationship of perceived scientific agreement with climate policy support (adapted from Ding et al. 2011: p. 462) Ding et al. (2011) demonstrate that the perceived scientific agreement on climate change is closely linked to key beliefs people have on global warming, in particular concerning the degree of certainty that global warming is the reality. In turn, people perceiving scientific dissent on climate change, support climate policy less due to uncertainty. The communication of the scientific consensus on anthropogenic global warming contributes to build public acceptance for climate action and support for climate policy (Lewandowsky et al. 2012).

In general, the urgency for political climate action and the increasingly solidifying science base appears to be diametrically opposed to climate change lingering on the international policy agenda. While the 2015 Paris Agreement certainly constitutes a step into the right direction, the impression remains that progress is made at snail’s pace. According to Article 4 paragraph 2 of the Paris Agreement, the “nationally determined contributions” (NDCs) (UN 2015) were established to ensure that each country pursues domestic mitigation efforts that are depending on the respective national circumstances and capabilities. Yet, with the current Wageningen University - 14 - MSc. Thesis Environmental Policy Group ambitions of pledges and NDCs, the international community would at best limit global warming to 2.5°C by the year 2100. The current policy projections even indicate a global temperature rise up to 3.9°C (Fig. 4).

Figure 4: Effect of current pledges and policies on global temperature (Climate Action Tracker 2016a) To achieve the 2°C target in 2100 would require to limit the atmospheric carbon concentration at 450ppm (parts per million), meaning a total global emission reduction of about 10 Gt of

CO2 emissions until 2030 (Fig. 4). An average global temperature rise of 1.5°C would even require reducing global CO2 emissions by 17 Gt in order to remain below 350ppm. However, in September 2016, the total share of GHG emissions already exceeded the 400ppm threshold of atmospheric carbon concentration (Kahn 2016). The current track of declared ambitions in the NDCs and pledges made by the countries, still leaves an emission gap of about 15-24 Gt of CO2 emissions in 2030, depending on whether the 2°C or the 1.5°C should be achieved (Fig. 5). Wageningen University - 15 - MSc. Thesis Environmental Policy Group

Figure 5: Emissions Gaps November 2016 (Climate Action Tracker 2016 b) A lack of awareness or insufficient knowledge about the effects of climate change cannot explain the political reluctance of international climate action. Instead, the international climate policy appears to be locked in a cognitive dissonance on how to implement the goals of the Paris Agreement. The ambitions set in Paris demonstrate that the international community in fact acknowledges the need for an extensive decarbonisation of the future and limit global warming to at least 2°C. At the same time, the NDCs are not on track to pave the way towards it. To at least achieve the 2°C target, fundamental transformative changes in sectors like energy, transport, food production and consumption are required to effectively reduce GHG emissions. However, these transformative changes remain an unknown territory to the individual countries, they are reluctant to explore. The problems that the international community is facing today

are so complex that […] we are caught in an ‘ingenuity gap’, where the world’s problems have become so difficult to solve that we lack the ingenuity required to solve them (SRC 2010: p. 10)

In other words, the goal may be defined, but the international community shows (not yet) the necessary ambitions in terms of its implementation despite their better knowledge, as the Wageningen University - 16 - MSc. Thesis Environmental Policy Group concrete steps on the pathway towards it remain to a large extent unclear. Hence, at the climate science policy interface, uncertainty cannot be removed from climate science and also remains inherent to the implementation of climate policy goals, paralysing decision-making and political action. What is consequently needed is to dissolve this lock-in by identifying concrete measures that initiate transformative changes across relevant sectors. In addition, climate science needs to establish effective strategies to cope with uncertainty that enable political climate action. The development and improvement of decision support tools and the communication of uncertainty in a policy-relevant way may contribute to tackle climate change more effectively.

Scenario-based approaches appear in general as a suitable tool for supporting decision-making by visualising spans of uncertainty, as well as possible policy pathways in the face of climate change. However, it is necessary to match scenario approaches to the respective frames and perceptions of the stakeholders involved, as well as the scope of the study. Berkhout et al. (2014) identify a myriad of frames for uncertainty in scenarios and mapped scenario approaches on a scale from local to global, as well as from incident-driven approaches (e.g. local vulnerability assessment) to general top-down scenarios (e.g. IPCC scenarios). Adjusting scenario-based approaches to the scenario-relevant context seems promising to improve the accuracy for guiding policy-makers in their decisions. To make the varying frames explicit can be beneficial for decision-making and does not necessarily lead to an increased uncertainty through ambiguity or dissent. The open communication of varying frames does not only ensure a mutual understanding and transparency between stakeholders, but also promotes innovativeness as a wider range of possible policy responses is collectively shared and discussed. An increased awareness for each other’s conceptions of reality and the different understandings of the problem at stake can create an enriching influence within the process of policy-making (de Boer et al. 2010; Enserink et al. 2013). In this context, a frame- based guidance has the potential to cope with uncertainties and directly supports decision- making through an improved mutual understanding and dialogue among the involved stakeholders. This way of recognising that each other’s knowledge is apart, helps to agree on a set of frames establishing a common ground to progress from (Brugnach et al. 2008).

In case of incomplete knowledge that affects decision making in climate policy, the collection of more data, as well as conducting research are rather evident strategies to cope with epistemic uncertainty (e.g. Dessai & Hulme 2004; Dewulf et al. 2005; Brugnach et al. 2008). However, to extend the knowledge frontier by gathering new information on an uncertain Wageningen University - 17 - MSc. Thesis Environmental Policy Group issue works in two directions. It may decrease or increase uncertainty, as additional complexity and unknown territory might be discovered (Curry & Webster 2011; Enserink et al. 2013; Walker et al. 2008).

Ontic uncertainty, on the contrary, remains by definition unreducible and is either present or absent (Refsgaard et al. 2013). To cope with the presence of unpredictability, such as the natural variability inherent to the flow rate of a river (Brugnach et al. 2008), control measures are possibilities to tame ontic uncertainty. The flow rate can be artificially altered through hydraulic engineering by straightening the watercourse, technical flood protection by building a dam or the levelling of the river bed and bank structures. However, these protective measures to control natural variability are expensive, large-scale infrastructures that lack flexibility to adjust to changing circumstances. If such measures fail, the collapse of a dam or dike could cause enormous damage (ibid.). For instance, floods in 2002 and 2013 caused a total economic damage of approximately 30 billion Euros and 64 fatalities across Europe (MunichRe 2002: p. 78; MunichRe 2014: p. 22). Dikes collapsed and whole villages were destroyed, demonstrating that protective measures cannot guarantee to withstand the unpredictable power of natural disasters and extreme weather events. In the face of increasing climate change, coping with ontic uncertainty requires more flexible approaches. Among others, this may include an incremental learning process of “learning to manage by managing to learn” (Pahl-Wostl 2007) or the diversification of measures that enable an adjustable choice of options under different scenarios, as well as the combination of multiple strategies and improvisation (Brugnach et al. 2008).

In general, the application of the uncertainty concept at the climate science policy interface certainly enriches decision-making through the analysis of uncertainty obstacles to policy- making and the development of coping strategies. It could also allow the improved inclusion and consideration of a broader range of frames. The nature dimension is most promising to analyse the ways how uncertainty affects knowledge generation and to unveil the intervening policy-making process, connecting awareness of a problem with the concrete policy response. In this way, the nature dimension provides a clear and useful framework to learn from and cope with uncertainty at the intersection of climate science and policy development. However, to effectively tackle climate change requires dissolving the cognitive dissonance and the ingenuity trap, which cannot be achieved on the conceptual level alone. After all, the conceptualisation of qualitative uncertainty remains an analytical, reactive approach. To overcome the lock-in determined by the cognitive dissonance, the complementary strategy of Wageningen University - 18 - MSc. Thesis Environmental Policy Group

‘embracing uncertainty’ might enable climate action and guidance for climate policy decision- makers, despite the presence of uncertainty.

2.4 Embracing uncertainty for effective climate policy action While quantifiable uncertainty attempts to support decision-making through the assignment of probabilities, the qualitative uncertainty concept at the climate science policy interface seeks to contribute to solve the uncertainty problem by understanding and learning about it. Uncertainty appears as an omnipresent phenomenon in climate science and policy, receiving increasing relevance, the more complex a system is. Uncertainty can also be perceived as an indication for the urgency of taking action, assuming that the lesser science knows about future climate change and climate impacts, the more decisive is the mitigation of climate change to policy-making (Lewandowsky et al. 2014a; Lewandowsky et al. 2014b). Paradoxically, the lock-in determined by the cognitive dissonance persists, even though climate change already materialises and its impacts become a reality, which climate policy needs to tackle. Extreme weather events and natural disasters around the world indicate a changing climate with devastating impacts, such as the floodings in Europe in 2002 and 2013, floods in Pakistan in 2010 (Boas & Rothe 2016) or the European-wide heat wave in 2003. The latter not only caused an economic damage of 10-13 billion US dollars (MunichRe 2004; UNEP/Grid-Europe 2004), mainly through agricultural losses and forest fires, but also claimed the lives of about 40,000 people (García-Herrera et al. 2010).

In essence, uncertainty must not be regarded as an enemy to climate science nor climate policy research (Corner et al. 2015). Instead, it should be perceived as a driver, encouraging climate science to dig deeper to reveal innovative approaches and new knowledge on uncertainty. In climate policy, uncertainty should become a guiding value to take preventive action in response to climate change and not serve as an excuse for delaying policy responses. Similar to the precautionary principle, it is necessary to accept that consequences of climate change are uncertain and actions must not be postponed. Instead, the lacking ambitions of the NDCs call for transformative and pioneering changes in the global system that go beyond the comfort zones of the international community, national states and their citizens. A proactive way forward is needed and it is necessary to shift the general focus away from the things that are (yet) unknown, towards the question where to start with the actions a fundamental transformation entails. Wageningen University - 19 - MSc. Thesis Environmental Policy Group

‘Embracing uncertainty’ requires coping with uncertainty along the way. Decision-makers must remain flexible and adaptable to changing circumstances, constantly reflecting on their decisions and available alternative options to the pathway they pursue. Dynamic and adaptive policy pathways (Fig. 6) could provide the appropriate framework for decision-making under uncertain conditions (Haasnoot et al. 2013; Kwakkel et al. 2016).

Figure 6: Example of Dynamic Adaptive Policy Pathways in a Climate Adaptatio n map (Haasnoot et al. 2013). Since the future cannot be predicted, one static plan is insufficient and a broader range of potential pathways on which the future might unfold need to be taken into account. Starting from the status quo of the current policy, dynamic adaptive policy pathways map out various actions to achieve a specific target in a certain amount of time. Some actions, such as action B (Fig. 5), may encounter a tipping-point where it is necessary to shift towards an alternative action to remain on track. For instance, increasing energy efficiency can support the reduction of GHG emissions. In the same time, energy efficiency cannot substitute the necessary transformation away from fossil fuels and towards renewable energies. Similar to a tube map, the transfer stations to new actions allow policy-makers to change trains and adjust their course. Dynamic adaptive policy pathways combine foresight regarding the various possibilities of failure on the way towards the set target with the capacity to cope with ad-hoc developments during the process and continuous monitoring (Haasnoot et al. 2013). With this approach policy-makers keep learning and remain flexible and aware of the options that remain available to them when taking a decision. At the same time, it is up to climate science to facilitate such a process by determining the flexibility and resilience of climate policy options, instead of seeking to eliminate uncertainty as a confounding variable (Clark & Pulwarty 2003). Wageningen University - 20 - MSc. Thesis Environmental Policy Group

Nevertheless, the research of qualitative and quantifiable uncertainty provides analytical implications for incrementally learning about uncertainty, as well as the assessment of possible consequences and the uncertainties a political decision entails. To overcome the cognitive dissonance and the ingenuity gap in face of climate change, this thesis suggests ‘embracing uncertainty’ as a proactive, complementary strategy to the reactive conceptual level. ‘Embracing uncertainty’ builds upon the probability-based notion of uncertainty and the qualitative concept and benefits from their analytical contribution (Fig. 7)

Figure 7: The idea of ‘embracing uncertainty’ building on the academic notion of uncertainty 2.5 Uncertainty – a mode for change The transformative changes that are needed to tackle climate change effectively require a mode of “adaptive (self-)governance” (Schmidt 2015: p. 420) that characterise flexibility and the building of resilience. While flexibility is undoubtedly needed to enable the continuous and incremental ability to learn, as well as the implementation of ad-hoc adaptations to chosen pathways throughout the transformation process, it seems legitimate to ask to what extent resilience contributes to the transformation’s progress. In fact, understanding resilience as “the capacity of a system […] to deal with change and continue to develop […]” (SRC 2010: p. 18) might appear as “intuitively in keeping with neoliberalism and its system of rule” (Evans & Reid 2013: p. 92). On the contrary, the term transformation entails “the creation of a fundamentally new system when ecological, economic or social conditions make the continuation of the existing system untenable” (SRC 2010: p. 18). Building resilience may therefore not be understood and applied as a manifestation of the neoliberal system, as this Wageningen University - 21 - MSc. Thesis Environmental Policy Group would not allow the fundamental changes needed for an effective climate mitigation strategy. Accordingly, the Stockholm Resilience Centre adds that resilience should be characterised as the “withstanding shocks and disturbances (such as climate change or financial crises) and using such events to catalyse renewal and innovation” (2010: p. 18). Under the complexity of climate change, Schmidt (2015) therefore suggests that resilience should be understood as a mode of governance in response to “neoliberal logics rather than a continuation of its system of rule” (p. 402).

With regard to the single-outcome study of this thesis, flexibility and resilience as modes of (self-)governance exemplify the escape from the neoliberal logic. In fact, this transformation does not only contradict neoliberal beliefs at their core – the privatisation of public services – but also constitutes a concrete paving stone on the pathway towards and effective climate mitigation strategy. At the same time, the transformation of the energy infrastructure and supply provides an ideal scope for leaving the conceptual level and studying the role of uncertainty in the real world. The process set off in Hamburg corresponds to the unknown territory that will be necessary to explore for meeting climate change effectively. This also includes rethinking and revising decisions made in the past, such as the privatisation of public service obligations during the emergence of neoliberalism. In the city of Hamburg, the desire for a different future due to uncertainty in the face of climate change unfolded an unprecedented power and civil engagement to change the status quo. To understand the causal role of uncertainty within such a transformative process and the coming into being of the remunicipalisation as the concrete outcome requires a methodological framework that is capable of revealing this causal inferences uncertainty provides as a mode for change. Wageningen University - 22 - MSc. Thesis Environmental Policy Group

3 Method

The notion of uncertainty remains a fluid concept that is hard to predict and difficult to manage. Following the ambition of this thesis of going beyond the conceptual level to research the role of uncertainty as a mode of change in a real world process underlies the assumption that uncertainty may constitute an intervening causal link, influencing the outcome of such a process. Due to the conceptual fluidity, the study of this presumed causal inference in the remunicipalisation process essentially requires an appropriate methodological approach. In this thesis, the method of process-tracing is introduced and specifically applied to the remunicipalisation process in Hamburg in order to make the intervening link of uncertainty visible.

Process-tracing can be compared to detective work on a crime scene. Similar to a criminal investigator, evidence is needed to trace back the causal chain to understand what led to a certain outcome. In process-tracing, the seeking for explanatory knowledge requires to reveal the causal mechanism underlying the intervening process linking X and Y. To detect this link, this thesis relies on the comprehension of meaning-making practices of the involved human actors in the remunicipalisation process, applying an interpretive approach based on interviews. The method of process-tracing should reveal the causal role of uncertainty from the gathered qualitative data that provides direct insights of how the stakeholders experienced and perceived uncertainty throughout the remunicipalisation process.

In the first part of this chapter, the method of process-tracing is introduced (3.1). By clarifying the ontological perception of causation attached to the method, the functioning of the causal mechanism is explained. The section ends with the empirical tests of process-tracing to establish evidence for the presence of a causal mechanism. In the second part, the specific variant of explaining-outcome process-tracing is introduced as the methodological basis for the single-outcome study of the energy distribution grid remunicipalisation in Hamburg (3.2). The empirical-interpretative approach, including the gathering of the qualitative data, is further elaborated in the last part of the chapter (3.3). Following the methodological structure of explaining-outcome process-tracing, the analysis of the gathered qualitative interview data within a theory-informed bottom-up coding procedure is elaborated (3.4)

3.1 Process-Tracing Methods of process-tracing are generally seen as qualitative research tools of social science for the evaluation of plausible hypothesis of causal inference within the process linking the Wageningen University - 23 - MSc. Thesis Environmental Policy Group independent variable(s) (X1, X2, X3,...) with the dependent variable(s) of the outcome (Y1, Y2,

Y3,…) in a single case (Beach & Pedersen 2013; Mahoney 2012; Bennett 2010; Checkel 2005; George & Bennett 2005). Process-tracing methods can be distinguished into the three variants: theory-testing, theory-building and explaining-outcome process-tracing (Beach & Pedersen 2013). In all three process-tracing variants, the major focus lies on the intervening process that connects X with Y and constitutes the black box of causality. In order to unpack this black box, process-tracing steps beyond the analysis of mere correlations and instead seeks to reveal the underlying causal forces producing the explanatory knowledge of why a certain outcome results at the end of a certain process (Checkel 2005; Beach & Pedersen 2013).

Theory-testing and theory-building process-tracing variants are theory-centric and have the main purpose to either deductively test a theory by seeking for the presence of a causal mechanism (theory-testing) or inductively build theoretical knowledge about a detected causal mechanism that connects X and Y (theory-building). Consequently, theory-testing and - building process-tracing require a certain level of generalisability of the causal mechanism across small-n and, in case of the inductive approach, even large-n studies. In contrast, the third variant of explaining-outcome process-tracing is focused on a single-case and follows the logic of abduction. Abductive inference is herein understood as the seeking for the most plausible explanatory hypothesis, mixing a deductive with an inductive path or vice versa (Peirce 1955; Beach & Pedersen 2013; Tansey 2007).

The explanation of the coming into being of a certain outcome in process-tracing underlies a mechanismic understanding of causality that allows drawing two ontological conclusions about causation as perceived in process-tracing. First, process-tracing fundamentally differs from Hume’s understanding of causation, who established causality based on the causal succession of objects underlying some sort of regularity (Lewis 2008). In this understanding, an object causing an effect in a single instance does not establish causation. Instead, causation is understood as the experience of sequences of reoccurring patterns establishing a causal relation for the production of a certain outcome. Repetition, however, is not a reliable criterion for determining causation, as it cannot be regarded as essential for causation, nor for the specific determination of a causal relation (Mackie 1965).

As a result, process-tracing follows a modified version of Descarte’s perception of causation. This mechanismic understanding is determined by the presence of a causal mechanism that leads to X producing Y through the transmission of underlying causal forces, regardless of Wageningen University - 24 - MSc. Thesis Environmental Policy Group whether X produces Y in a single event or recurring within some sort of pattern (Beach & Pedersen 2013). For instance, referring to the example of a crime scene, in a single-case it does not matter whether homicide (Y) was committed by a first-time perpetrator (X1) or a serial killer (X2). Why, how and when remain the questions to be traced by the criminal investigator to determine the chain of causation that always follows the logical sequence of X causing Y. Mechanism-based process-tracing determines both, the intervening causal chain between X and Y, but also the direction of causation by producing substantiating evidence of X causing Y (Bennett 2010).

A second necessary distinction is to be made regarding the probabilistic and deterministic understanding of causality. Probabilistic causality takes the occurrence of randomness into consideration when establishing a causal relation. The deterministic understanding process- tracing follows regards randomness as irrelevant as long as the link between X and Y can be sufficiently established (Beach & Pedersen 2013). In other words, randomness can be ignored when a causal mechanism is present through the necessary and the sufficient condition of X producing Y. For instance, homicide (Y) can be causally linked to the perpetrator (X) regardless whether this applies to one or more cases. As a result, process-tracing can draw sufficient explanatory knowledge of X causing Y through the functioning of a causal mechanism in small- or large-n case study research and within-case analyses (Vennesson 2008). A probabilistic understanding in contrast, would require larger-n studies coupled with quantitative methods to establish cross-case inferences, while case-centric inferences would in general be meaningless (Mahoney 2008; Beach & Pedersen 2013).

Against this ontological background, the causal mechanism in process-tracing that links X and Y is defined as a “theorised system of interlocking parts transmitting causal forces from X to Y” (Beach & Pedersen 2013: p. 29, referring to Bhaskar 1979, Bunge 1997 & 2004 and Glennan 1996 & 2002). Using a simplified analogy, a causal mechanism can be explained as the driveshaft and the wheels of a car, that are linking the motor of a car (X) with the produced outcome of setting the car into motion (Y) (Beach & Pedersen 2013). Of course, this rather technical picture of a causal mechanism clearly neglects the usual dynamics of social processes. However, it helps to translate this complex matter of mechanism-based process- tracing to the following general formula of a causal mechanism connecting X and Y:

X→[(n1→) * (n2→)] Y (Beach & Pedersen 2013: p. 30) Wageningen University - 25 - MSc. Thesis Environmental Policy Group

While each arrow is visualising the transmission of causal forces from X to Y, the intervening process consists of a mechanism with different entities nn→, such as the wheels or the driveshaft in the car example. It is important to note that the mechanism nn→ cannot produce Y by itself and the presence of X is a necessary condition for the presence of a causal mechanism. Moreover, every nn→ that does not constitute a vital component to the overall causal mechanism must be excluded (Beach & Pedersen 2013). In this sense, the method of process-tracing contains a notion of positivistic reasoning, as it seeks for the most plausible explanation of a certain outcome by understanding the underlying causal inference producing it (George & Bennett 2005; Vennesson 2008).

Similar to a criminal investigator, evidence is inevitably needed to trace back the causal chain of what happened to produce the outcome of Y. In process-tracing, this requires the development of empirical tests to interpretatively determine the presence of the causal mechanism. The assumed causal inference in a process decisively depends on the strength of the executed empirical tests. These tests comprise four different ways to establish confidence over the presence or absence of a causal mechanism that vary in their degree of i) “certainty (disconfirmatory power)” and ii) “uniqueness (confirmatory power)” (Beach & Pedersen 2013: p. 103; Collier 2011; Mahoney 2012). While the disconfirmatory power determines the necessary dimension for affirming assumed causal inference, the confirmatory power determines the sufficient dimension to affirm causal inference. In other words, to achieve confidence of the presence of a hypothesised causal mechanism, the hypothesis must withstand certain predictions. These predictions can vary in their uniqueness and certainty. For instance, a unique assumption over a causal inference provides low certainty of the presence of the causal mechanism, precisely due to the fact of its uniqueness. This is particularly the case for the so-called ‘smoking gun’ test, describing the unique circumstance of catching a suspect holding a smoking gun at a crime scene. A criminal investigator may be tempted to jump to the conclusion that the suspect is presumed guilty, although the innocence of other suspects with no smoking guns has not yet been substantiated. This makes the finding of a smoking gun in the research process a sufficient but not a necessary condition for the presence of a causal inference between X and Y. Consequently, the hypothesised causal mechanism can be strengthened through the smoking gun test, while the hypothesis failing the test does not reject it (Collier 2011).

The three remaining empirical tests in process-tracing comprise the ‘straw-in-the-wind’ test, the ‘hoop’ test and the ‘doubly decisive’ test (Fig. 8). The ‘straw-in-the-wind’ test is the Wageningen University - 26 - MSc. Thesis Environmental Policy Group weakest test and is neither a necessary nor a sufficient condition for affirming or disconfirming a hypothesis, only slightly strengthening or weakening it. For instance, in this thesis the ‘straw-in-the-wind’ test comprises all statements on uncertainty of the interviewees, affirming the relevance of the hypothesis, but not confirming it (see also 3.3). The ‘hoop’ test literally requires the hypothesis to jump through the hoop, similar to a lion jumping through a burning hoop in the circus. Since failing this challenge does not eliminate rival hypothesis, the test can be particularly useful to ensure that all the necessary conditions for a hypothesised causal inference are covered. Finally, the affirming ‘doubly decisive’ test confirms the presumed hypothesis and eliminates all other rival explanations for the casual mechanism. In the practice of social sciences, a ‘doubly decisive’ test can be rarely achieved, making it advisable to seek for combinations of the ‘hoop’ and the ‘smoking gun’ test for a comparable analytical result, as they are complementing each other (Bennett 2010; Mahoney 2012; van Evera 1997). The ‘hoop’ test ensures that pieces of evidence that are required to validate the hypothesised causal mechanism are present and affirm the causal relation between X and Y with the smoking gun test ultimately confirming the hypothesis.

Figure 8: Empirical process-tracing tests for causal inference (Collier 2011 : p. 825).

3.2 Explaining-outcome process-tracing A case-centric research design suggests the application of explaining-outcome process- tracing, which constructs a minimally sufficient explanation for a single outcome that came into being through the transmission of causal forces between X and Y (Beach & Pedersen Wageningen University - 27 - MSc. Thesis Environmental Policy Group

2013). This requires an iterative research process to test a hypothesised causal mechanism against potentially competing explanations that may account for a produced outcome. The abductive approach of explaining-outcome process-tracing allows a flexible interplay between the theoretical and the case level. In this sense, the ‘inductive pathway’ (Fig. 9) of explaining- outcome process-tracing provides guidance for this thesis in order to investigate and trace the causal inference leading to the remunicipalisation. In accordance with the abductive logic, the ‘inductive pathway’ starts at the empirical, case-specific level, before shifting towards the theoretical level, combining both in a third step.

Figure 9: Inductive research pathway in explaining-outcome process-tracing (adapted from Beach & Pedersen 2013: p. 20) Step one of the ‘inductive pathway’ focuses on the case-specific facts and the narrative the process provides to build hypotheses on the causal mechanism at work. In reflection of the theory and the narrative of the case, a case-specific causal mechanism is hypothesised during step two. After introducing step one in chapter 4.3, the causal mechanism is hypothesised in chapter 5.1. In step three, the bottom-up analysis of the data material ensures openness to identifying plausible explanations for the coming into being of the outcome and tests the hypothesised causal mechanism. This last step is iterated until a minimally sufficient explanation for the outcome has been established. Wageningen University - 28 - MSc. Thesis Environmental Policy Group

A minimally sufficient explanation has been achieved when redundant entities nn→ with no causal effect on the presumed causal mechanism have been eliminated (Mackie 1965; Beach & Pedersen 2013). This corresponds to the abductive reasoning of explaining-outcome process tracing, following the epistemological conviction that knowledge is mainly conjectural, requiring experimental testing (Wirth 1995). The researcher’s individual expectations are thereby aligned to the meaning of the data (Checkel 2009) and prevent to jump to conclusions (Checkel 2005). In this way, explaining-outcome process-tracing contains the positivistic logic of inference, aiming to “identify, assess and eliminate rival explanations” (Collier et al. 2004: p. 229), while seeking for the most plausible causal explanation of social outcomes (Porta 2014).

Process-tracing uncertainty as causal mechanism in the outlined context of the remunicipalisation of the energy distribution grids in Hamburg is an explorative research in a single-outcome study design (Gerring 2006). However, the idiographic and case-centric focus still allows theoretical ambitions beyond the single case (Beach & Pedersen 2013), which can be mirrored against the conceptual framework of this research. With regard to theory-building or theory-testing process-tracing, the major difference lies in a broader understanding of the causal mechanism in explaining-outcome process-tracing as “eclectic conglomerate” (Beach & Pedersen 2013: p. 19). In contrast to the theory-testing and theory-building variants, explaining-outcome process-tracing establishes a minimally sufficient explanation for the production of the outcome in a single case. While the case-centric focus does not allow the transfer of a causal mechanism to a broader range of cases, it still provides explanatory knowledge of the coming into being of a specific outcome Y. In line with the previously outlined inductive research pathway, the analysis of the primary data material followed the previously outlined inductive research pathway.

3.3 Data gathering The accumulated qualitative data consists of primary data material and secondary sources. The secondary mainly consists of policy documents, expert reports and newspaper articles that were partly intuitively and partly purposefully gathered rather than in a structured manner. The primary data was retrieved from 13 interviews that were conducted in June and July 2016. The first interviewees were selected on the basis of secondary sources that were identified as key actors of proponents and opponents in the remunicipalisation of energy grids in the City of Hamburg. During the subsequent research process snowball sampling increased the number of additional interviewees. The final selection includes representatives of the Wageningen University - 29 - MSc. Thesis Environmental Policy Group citizen’s initiative Our Hamburg – Our Grid, the political sphere, civil organisations, entrepreneurs in the energy sector, academics, representatives of trade and commerce organisations and the private energy network company Vattenfall. (Table 2).

Remunicipalisation Name Organisation(s) yes/no Braasch, Manfred State Chairman of Friends of the Earth Germany, pro Hamburg, former member of Our Hamburg – Our Grid as person of trust & member of the Energy Grid Advisory Council Christiansen, Theo Head of the department “Deacony and Education“ at the pro Evangelical-Lutheran congregation Hamburg & former member of Our Hamburg – Our Grid as person of trust Ederhof, Matthias SPD Hamburg, former member of Our Hamburg – Our pro Grid, Board of the energy cooperative “Energienetz Hamburg” & member of the Energy Grid Advisory Council Glawe, Sabine Association of Taxpayers Hamburg & former members of agianst Metzner, Christoph the No-campaign Hansen, Wiebke former Campaigner for Our Hamburg – Our Grid at pro Friends of the Earth Germany, Hamburg Heieis, Alexander former Works Council Chairman at Vattenfall, current against, now pro Works Council Chairman at Stromnetz Hamburg GmbH, former member of the No-campaign & member of the Energy Grid Advisory Council Jersch, Stephan The Left Party, former member of Our Hamburg – Our pro Grid & member of the Energy Grid Advisory Council Kerstan, Jens Senator at the Hamburg State Authority for Environment pro and Energy & Green Party leader in Hamburg Morgenroth, Ina first Chairwoman of the labour union IG Metall Hamburg against & former member of the No-campaign Rabenstein, Dietrich former professor at the HafenCity University (HCU) pro Hamburg, former member of Our Hamburg – Our Grid & representative in the Energy Grid Advisory Council Schaal, Monika Environmental Spokesperson of the SPD Hamburg & undecided member of the Energy Grid Advisory Council Seifert, Dirk former member of Our Hamburg – Our Grid, former pro member of Robin Wood, Blogger of umweltFAIRaendern.de & representative in the Energy Grid Advisory Council Siegler, Gilbert former member of Our Hamburg – Our Grid & Left Party pro & member of the Energy Grid Advisory Council

Table 2: List of Interviewees

In order to be able to recognise potential sources for information on uncertainty within the interview situation, the development of the semi-structured interview guideline (Annex) (Noaks & Wincup 2004) was preceded by an extensive review of academic and case-related literature (Barriball & While 1994). The self-imposed goal of keeping the interview duration Wageningen University - 30 - MSc. Thesis Environmental Policy Group between 30 to 60 minutes constituted a challenge for the development of the interview questions and required a compromise between covering sufficient case-specific process information, while also being able to address uncertainty directly. The accuracy and precision of the interview questions was increased iteratively until a first draft version was established. To ensure the feasibility of the drafted interview guideline in a timeframe of 30 to 60 minutes an informal practice session (Barriball & While 1994) with a former study colleague at PhD level was carried out. This resulted in a further reduction and merging of interview questions and led to the final draft version of the semi-structured interview guideline of eleven questions in five sections.

The interview guideline was slightly adapted for each interview. This allowed to increase the feasibility of the interview by varying the sequence of the questions and to remain flexible about the available interview time and peculiarities of the interviewee. Changing interview questions specifically was done due to interviewees’ attitudes towards the remunicipalisation in Hamburg, being either member of the Yes- or the No-campaign during the run-up to the referendum. Moreover, time restrictions led to varying interview durations from 30 to 90 minutes. One interview included two interviewees, what also affected the interview structure and its duration. One interview was carried via telephone. None of the interviewees requested confidential treatment of the interview data, except for two passages that were blacked-out in the transcriptions and one request to receive the opportunity of authorising the interview data before the thesis would be submitted.

Case-specific information constituted the central criterion in the research process to maintain the possibility of rival, alternative explanations to emerge from the empirical data. This included questions referring to the individual motivation to participate in the remunicipalisation process, as well as asking for the reasons of why an interviewee positioned him- or herself for or against the remunicipalisation. After clarifying these inherent motivations and reasons to participate in the process, uncertainty was encircled implicitly by asking whether the interviewee was aware of any challenges throughout the process. In accordance to the method of process tracing, the interview questions allowed room for alternative explanations. At first, uncertainty as the presumed causal mechanism was not directly addressed to avoid an exclusive focus on uncertainty. Instead the focus of the interview questions was broader to include the possibility of encountering uncertainty as a subset to cover terms. This included ‘challenges’ the interviewee encountered during the process, but also the ‘motivations’ driving the interviewee to get involved in the Wageningen University - 31 - MSc. Thesis Environmental Policy Group remunicipalisation. Otherwise, the interview questions would have led to the exclusion of alternative, rivalling explanations, creating a considerable bias by narrowing down the potential spectrum of results.

However, since the research purpose not exclusively aimed at implicit uncertainties that are inherent to the interviewee’s individual mind-set, one question directly addressed the presumed presence of uncertainties in the remunicipalisation process. In this way, the first empirical test of process-tracing, the ‘straw-in-the-wind’ test, was carried out as an integral part of the interview situation and the semi-structured interview guideline. The ‘hoop’ test and the ‘smoking gun’ test were carried out during the coding of the empirical material. Hypothesis-affirming findings were detected by applying the ‘hoop’ test including those statements on uncertainty that were gathered after the interviewees were explicitly asked to reflect on potential uncertainties at the different stages of the remunicipalisation process. At the same time, the possibility of revealing a ‘smoking gun’ test was maintained, as statements of uncertainty could be made, before directly confronting the interviewee with questions on uncertainty.

Due to the positivistic notion process-tracing entails, the type of knowledge gathered by conducting the interviews needs clarification. The comprehension of meaning-making practices of the stakeholders involved in the remunicipalisation process is based on an interpretive approach to the interviews. Qualitative interviews are “able to achieve a level of depth and complexity that is not available to other […] approaches” (Byrne 2004: p. 182). Epistemologically, the qualitative interviews are interpreted as positivistic facts about behaviour and attitudes, as well as emotionalist authentic experiences each interviewee made throughout the remunicipalisation process (Silverman 2011). The interviewees are understood as “vessels of answers” (Holstein & Gubrium 2011: p. 152). The questions in the semi- structured interview guideline aimed at retrieving i) “facts”, ii) “beliefs about facts”, iii) “feelings and motives”, iv) “standards of action” (meaning hypothetical questions about potential subjective thinking or actions in a certain situation), v) “present or past behaviour” and vi) “conscious reasons” (meaning the examination of various considerations made by the interviewee potentially affecting the outcome) (Silverman 2011: pp. 170-71, referring to Sellitz et al. 1964: pp. 245-53). The depth of qualitative interviews in combination with the positivistic nature of the process-tracing method grasps notions of uncertainty within the remunicipalisation process, despite its conceptual fluidity. While this approach can make uncertainty tangible in a real world process, the positivistic understanding of the retrieved Wageningen University - 32 - MSc. Thesis Environmental Policy Group data material matches the research design of applying explaining-outcome process-tracing to a case-centric single-outcome study. At the same time, the semi-structured interview design enabled sufficient flexibility to depart from the interview guideline to ask interposed questions and to make queries, despite the narrow epistemological focus of positivism. This allowed the ad hoc consideration of information on uncertainty in the course of the interview.

3.4 Data Analysis The gathered interview data is the main source of information on the role of uncertainty in the process of the remunicipalisation in Hamburg. The secondary data, consisting of policy documents, newspaper articles and expert assessments mainly served as an additional source of information and crosscheck for the information the interviewees provided. Following the inductive research pathway, the interview data was analysed in a theory-informed bottom-up coding procedure. This means that the academic notion of uncertainty has been considered throughout the coding of the interview data and supported the initial labelling of empiric statements on uncertainty as for instance epistemic, ambiguity or level uncertainty.

For the coding procedure this thesis used the qualitative data analysis software MAXQDA. The software enabled a structured research process by allowing organising the interview transcripts and assigning codes to remarks on uncertainty. MAXQDA provided additional helpful features during the analysis, for example determining the overlap between codes that led to code relations on uncertainty (see chapter 5.2). Moreover, code relations supported the iterations towards a minimally sufficient explanation for the outcome Y as they indicated where the merging of codes is appropriate.

The first coding iteration consisted of assigning codes for statements referring to uncertainty in the transcribed interview data. During the second coding iteration, all codes established in the first round were applied to the whole data set to ensure consistency. This was repeated in the third coding round, including additional codes indicating the phase of the remunicipalisation process where uncertainty occurred. Phase I comprises uncertainties until the referendum decision. Phase II was assigned to all uncertainties occurring in the implementation phase of the remunicipalisation until 2019. Phase III refers to uncertainties the interviewees perceived for the long term. The fourth coding iteration differed, as the data material was examined code-wise and not document by document. Comparing the coded pieces of text code-by-code reduced the amount of data and enabled a direct and focused comparison of the identified statements on uncertainty. As a result, specifying, merging or Wageningen University - 33 - MSc. Thesis Environmental Policy Group subcategorising codes established a more consistent coding scheme. Each of the four coding iterations was saved to a different MAXQDA file making the coding procedure transparent and traceable.

All coded remarks and statements on uncertainty were tested in accordance with the empirical tests of the process-tracing method (see 3.1). Since the ‘straw-in-the-wind’ test has already been integrated in the semi-structured interview guideline (see 3.2), the research focused on identifying combinations of the ‘smoking gun’ and the ‘hoop’ tests. A combination of these two tests merges into the ‘doubly decisive’ test, indicating that the hypothesis of uncertainty as the causal mechanism in the remunicipalisation process can be confirmed by eliminating alternative, rival hypothesis. In the primary data material five ‘smoking gun’ – statements or remarks on uncertainty without being explicitly asked for – and numerous positive ‘hoop’ tests could be identified, affirming the hypothesised causal mechanism of uncertainty (see 5.1). Wageningen University - 34 - MSc. Thesis Environmental Policy Group

4 The Energy Transition and the Remunicipalisation Process in Hamburg

Uncertainty is inherent to climate policy decision-making and the implementation of chosen policy pathways. The remunicipalisation may constitute a core element on such a pathway, fundamentally transforming the energy sector and potentially leading to an effective climate mitigation strategy. However, the causal mechanism leading to the repurchase of the energy distribution grids in Hamburg remains a black box. In order to unpack this black box, applying explaining-outcome process-tracing, demands a thorough understanding of the facts and the case-specific narrative the process of the remunicipalisation provides. In accordance with the process-tracing method it is important to understand and capture the main aspects of the case, before the analysis of uncertainty as the presumed causal mechanism inherent to the remunicipalisation process.

In order to understand the remunicipalisation process requires some background knowledge on the German regulations in place in the energy sector in general and grid management in particular (4.1). Researching uncertainty in this context makes it necessary to clarify the link between the development of a sustainable future and the remunicipalisation as a political choice for the successful implementation of the energy transition, which could benefit climate mitigation (4.2). On this preparatory basis, the remunicipalisation in Hamburg is outlined, as the main process to be traced in this work (4.3).

4.1 Energy distribution grids and regulations in Germany In Hamburg, the energy distribution grids comprise electricity, gas and district heating. Grid operation usually is a natural monopoly (Fig.10); only one company is managing the grid under certain state regulations that do not apply for district heating. In terms of gas and electricity, the German Energy Industry Act prevents the grid owning and operating companies from exploiting their position of monopoly, stipulating that the network charges paid by gas and electricity providers to the grid operator are stately regulated and monitored through the Federal Network Agency. While the grid operating companies generate their revenues through their service of gas and electricity transmission from the energy providers to the consumer, public authorities can create financial benefits through so-called concession agreements. Wageningen University - 35 - MSc. Thesis Environmental Policy Group

According to § 48 of the Energy Industry Act, concession agreements are negotiated between the public administration and the grid operator, equipping the latter with the right to use public areas (e.g. streets) to build their grid infrastructure and distribute gas and electricity to the end users. In return, cities and municipalities receive monetary benefits in form of concession fees from the energy grid operator. The Federal Government regulates concession fees determining a maximum ceiling depending on criteria, such as the number of inhabitants. Moreover, § 46 of the Energy Industry Act stipulates a maximum duration for concession agreements over gas and electricity distribution services of up to 20 years. Furthermore, electricity and gas distribution grid operators are legally obliged to the principle of unbundling, the operational separation of ownership and grid management, which is often achieved through constellations of separate subsidiary companies. This means that a network operator can also become a player in the energy market as electricity or gas supplier under the condition that the latter is strictly separated from grid management activities. In general, grid operators are obliged to guarantee the distribution of gas and electricity to the consumers under equal conditions to avoid any favouring of affiliated energy supplying companies over other market competitors. Transport and distribution therefore remain a natural monopoly in the gas and electricity sector, while the production and the energy market are characterised by competition (Fig. 10). Competition over the electricity and gas grid merely occurs every twenty years during the re-allocation of the concession agreements, where companies can submit their offers to the local municipality.

Figure 10: The structure of the gas and electricity sector into production, market and monopoly in Germany. Own elaboration based on Göken et al. (2009: p. 13). Wageningen University - 36 - MSc. Thesis Environmental Policy Group

In contrast to gas and electricity, district heating constitutes an exception with no such regulations in place (Bundeskartellamt 2012). With no federal agency in place regulating or monitoring the district heating sector, monetary benefits from concession fees, as well as the duration of the agreement and the termination clause are subject to negotiations between the city or municipality and the district heating provider. The latter also remains grid operator, making district heating an unregulated market that is not subject to the principle of unbundling. Owning the district heating grid infrastructure also includes the ownership over respective heat generation capacities. This provides direct access and steering capabilities on how the heat is generated, making district heating distribution grids decisive for the energy transition and climate mitigation action. Moreover, the missing regulations on grid charges via concession agreements, makes district heating the potentially most profitable energy distribution grid and a full natural monopoly. A last exception consists with regard to the exclusiveness of the right of way. While concessions for gas and electricity provide exclusive right of way to a single grid operator, allowing just one single grid system for gas and electricity, different district heating grids can exist in parallel to each other within one city or municipality. In this regard, competition in the district heating sector merely exists regarding the consumers initial choice of alternative heating systems, such as heating oil (Bundeskartellamt 2012). Once this decision has been made, changing the heating system involves a lot of effort and expenses, since the systems are not compatible with each other.

In Hamburg, electricity, gas and district heating remained in public hands, when the City of Hamburg negotiated concession agreements with two publicly owned energy utilities in 1994. The Hamburgische Electricitäts Werke (HEW) received the rights to operate the city’s electricity and district heating distribution grids from the 1 January 1995 for 20 years. For the same period, a concession agreement was concluded with Hein Gas, regulating the gas distribution in the city. However, the liberalisation of the European energy market also affected the local energy sector. With the intention to open gas and electricity to free market competition, the reform incentivised cities and municipalities with permanently strained financial situations to privatise the local distribution grids. Hamburg privatised its three energy distribution grids at the end of the 1990s, selling the publicly owned shares of HEW and Hein Gas in three steps (Monstadt 2004). In 2002, the Swedish state-owned energy utility Vattenfall bought the remaining HEW shares, receiving full authority over the company and thereby the electricity and district heating grids. A year later in 2003, the German energy utility E.ON became majority shareholder of Hein Gas, concluding the privatisation of the Wageningen University - 37 - MSc. Thesis Environmental Policy Group

Hamburg energy distribution grids (Heilemann & Hillebrand 2002). With the privatisation, the 1994 concession agreements were transferred to Vattenfall and E.ON.

4.2 The German Energy Transition (Energiewende) and its link to the Remunicipalisation in Hamburg The term ‘Energiewende’ (eng. energy transition) can be traced back in Germany to the 1980s. With the Electricity Feed-In Act in 1991, German energy policy sought to ensure grid access for renewable energies from wind, solar and hydro power, as well as biomass (IEA 2013). Globally, the German feed-in tariff scheme constitutes the first legislative attempt to strengthen the renewable power sector (Lüdeke-Freund & Opel 2014). In 2000, the Renewable Energy Sources Act succeeded the Feed-In Act, followed by several amendments between 2004 and 2016. The Renewable Energy Sources Act is the central legislative pillar for the German energy transition. Between 2000 and 2016 it provided the basis for an increase form 6% to 31.7% of renewable energy proportion in the gross power consumption in Germany, which is planned to be further increased to 40-45% by 2025 (BMWi 2017). In general, the energy transition enjoys broad public acceptance and support. In 2013, about 80% of the German population supported the planned transition towards renewable energy sources, with about 93% being aware of the term ‘Energiewende’ (vzbv 2013).

After the German reunification in 1990 the municipal utilities remained largely in control of the German energy sector (Hall et al. 2014). Due to the absence of a national energy system, municipal utilities prevailed as local monopolies particularly in the electricity sector until the EU Internal Market in Electricity and Repealing Directive 96/92/EC introduced the principle of unbundling and the right for consumers to change the energy supplier (Thomas 2005). While parts of the German energy market have already been in private ownership before 1990, the market liberalisation under EU the Directive led to a reduction of municipal utilities, opening the German energy supply industry to foreign investors. The liberalisation of the energy market changed the German energy sector from a decentralised energy supply and instead “favoured the expansion strategies of the energy giants” (Lauber & Mez 2004: p. 7).

Nevertheless, the question of who owns the grid infrastructure remained important in the public perception. In 2009, the Association of Municipal Companies (VKU) examined the trust of the German population in the local municipal utilities. The survey revealed that 81% primarily trust the work of their local municipal utility compared to 26% trusting in large energy companies, which are not believed to be concerned about the implementation of the Wageningen University - 38 - MSc. Thesis Environmental Policy Group energy transition (Fei & Rinehart 2014, referring to VKU 2009). Municipal utilities began to re-emerge and 170 German communities and municipalities regained control by repurchasing the energy distribution grid concessions between 2012 and 2014, while forming 60 new municipal utilities (Hall et al. 2014, referring to VKU 2012). This process of repurchasing the energy distribution grids from private grid operators has been labelled with the term ‘remunicipalisation’.

The re-emergence of municipal energy companies constitute a substantial paving stone towards a low-carbon future (Hall et al. 2014). In combination with civil society actors summarised under the term “Community Energy” (Haggett & Aitken 2015: p. 98), the energy sector is experiencing far-reaching impacts. The expansion of renewable energies and the social acceptance of this transformation also created new financing approaches, providing direct financial benefits for the communities. Municipal and community energy constitute a “Civic Energy Sector” (Hall et al. 2014) characterising the energy transition in Germany and constituting a counterpart to the traditionally centralised and mostly privatised energy sector. The decentralisation and diverse actor involvement in the energy production, for instance through community wind farms, also requires the transformation of the centralised grid infrastructure that private companies predominately own.

Apart from the technical aspects, the question of ownership of the energy distribution grid infrastructure is also a matter of political choice, depending on the understanding of how society and public life should be organised. Privatisation fundamentally embodies the idea of neoliberalism, intending the state to withdraw from the economy. In this thinking, economic control mechanisms are subject to the self-regulation of the free market, which is primarily characterised by competition. Public services, such as health care, public transport, water and energy supply are seen as most efficiently managed in private companies. The state should be responsible for state security matters, deregulation and the development of policies that enable free trade and the expansion of the private sector. On the opposite side, it can also be believed that the state’s primary task is to ensure the provision and functioning of public services as a corner stone of society and a fundamental right to every individual. In this alternative perspective to neoliberalism, outsourcing these tasks to the private sector is perceived as giving away control and the safeguarding of these rights cannot be guaranteed.

In Germany, a broad diversity of actors supported this alternative perspective to neoliberalism and started to reclaim control and steering capacities politics gave away during the liberalisation of the energy market that entailed the privatisation of formerly municipal Wageningen University - 39 - MSc. Thesis Environmental Policy Group utilities. Diverse forms energy distribution grid ownership including non-corporate and non- state models (Hall et al. 2014). Energy cooperatives, communal wind farms and even private individuals contribute to the expansion of renewable energies, the retention of local value, self-determination and subsidiarity. Until 2012, 118 so-called 100% renewable energy regions pioneered the energy transition in Germany, committing themselves to the target of 100% renewable energy supply. In 2014, the number of regions in the German 100%-renewable- energy network increased to 140 regions (IdE 2014).

Citizen engagement in the energy sector is not a new phenomenon in Germany. The anti- nuclear movement already formed in the 1970s across civil society and unfolded a substantial power and influence in the German energy policy.2 When the German Federal Government planned to prolong the nuclear programme in 2010, civil society organisations merged to one great protest movement culminating in a 120 km long human chain between two nuclear power plants Krümmel and Brunsbüttel through Hamburg with about 120.000 protesters participating (Der Spiegel 2010; Klimaretter.info 2011). This public outrage about the national energy policy intensified with the public shock about the Japanese nuclear accident in Fukushima in March 2011 and created a strong pressure on the German Federal Government. An overwhelming majority of the German citizens demanded a rapid substitution of nuclear power and shift towards a nuclear-free future, making a political reaction inevitable. Just eleven days after the nuclear accident, on March 22 in 2011, the German Federal Government commissioned a so-called Ethics Committee for a Secure Energy Supply with the task to develop a pathway for a German nuclear phase out, as well as to sketch out the transition towards renewable energy and a nuclear-free future. Eventually, the nuclear phase out was concluded on the 6th of June 2011, after years of back and forth.3 The Ethics Committee formulated essential recommendations for the energy transition and emphasised the importance of a joint effort, determining the involvement of civil society as a central element:

2 Close to Hamburg in the southeast lies the town Gorleben in the Wendland region, which has been scene of massive protests and conflicts between the German police and anti-nuclear activists, resisting the government’s plan to utilise an old salt dome in Gorleben as nuclear repository. The anti-nuclear movement mobilised tens of thousands people blocking the railroad tracks and streets to Gorleben during the so-called castor transports between 1995 and 2011, receiving national and international attention. 3 The German decision of phasing out nuclear energy was firstly initiated in 1999 by the red-green government under Chancellor Gerhard Schröder (SPD). In 2002, the first ‘phase-out law’ (Atomausstiegsgesetz) was adopted ensuring the regulated phase out of all 19 German nuclear power plants until 2021. In 2010, the black-yellow coalition of the Christian Democratic Union (CDU) and the Free Democratic Party (FDP) again extended the operating times of the nuclear power plants up to 2036. After the nuclear accident of Fukushima in 2011, the black-yellow coalition back-pedaled under public pressure, agreeing to a nuclear phase out for 2022. Wageningen University - 40 - MSc. Thesis Environmental Policy Group

The more energy policy relies on a decentralised civic involvement and the individual decisions of the German citizens, the more likely a consensus on the Energiewende can be achieved.

(Ethik-Kommission – Sichere Energieversorgung 2011: p.18)

Despite these developments, the four largest private energy utilities represented in Germany, including Vattenfall, RWE, EnBW and E.ON, failed to timely adjust their business strategy and investments towards renewable energy. In 2013, the power production from renewable energy at RWE accounted for 6.4%, while E.ON achieved around 12% (Renewable Energy World 2014). At the same time, renewable energy sources generated 23.4% of the total electricity demand in 2013, whereof the four largest energy companies merely produced 11.9%. This amounts to a total share of 88.1% these companies have lost in the German renewable energy market (Fei & Rinehart 2014: p. VI). At the annual press conference in 2014, RWE’s CEO admitted mistakes in his company’s strategic alignment leading to this weak performance in the renewable energy market: “We were late entering into the renewables market – possibly too late” (Renewable Energy World 2014).

Not only had the business strategies of these four German energy companies missed a timely exit point from the business-as-usual pathway. Similarly energy policy decision-making contributed in the manifestation of this scenario also affecting environmental and climate policy. For instance, the building of the coal-fired power plant Moorburg in Hamburg’s south heavily affected the city’s annual CO2 emissions. Planned and financed by Vattenfall as a replacement for an old gas power plant, the initial plans merely included a power plant half the size. However in 2005, the at the time governing conservative party urged Vattenfall to double its size and build Moorburg as a district heating plant. Its construction started in 2007 and took about seven years until Moorburg was connected to the grid in February 2014. The power plant’s environmental consequences are enormous, causing total annual CO2 emissions of 8.5 to 9 million tons, which is equivalent to Bolivia’s total CO2 emissions or double the amount of Hamburg’s annual traffic, while increased the city’s total annual CO2 emissions by 70% (Greenpeace 2008, Der Spiegel 2015). Already in 2007, a study commissioned by Friends of the Earth Germany (BUND) determined these problematic ecological and economic consequences (IFEU Arrhenius 2007). Aside from its high CO2 emissions, the plant’s low fuel utilisation rate creates energy losses of about 45% and potentially causes damaging impacts on the Elbe River through exhaust heat discharge. Until today the building of the district heating grids, connecting the power plant with Hamburg’s city district Altona are put on hold after massive protests from the citizens organising themselves as initiative Wageningen University - 41 - MSc. Thesis Environmental Policy Group

Moorburgtrasse-stoppen!. The citizens were concerned about the construction sites that were expected to last for years in the densely populated districts of St. Pauli and Altona, including the extensive felling of trees in local park areas (Moorburgtrasse-stoppen 2016).

A transformation in the energy sector is inevitable in order to tackle climate change effectively. Increasing the share of renewable energies is a concrete lever and paving stone for climate mitigation by decreasing the amount of GHG emissions in the atmosphere. While the energy transition in Germany has already become a part of civil engagement creating non- state and non-corporate business and investment opportunities, the largest private energy companies remain reluctant and slow in this process. Ownership over the energy distribution grids enables to make the necessary grid-related investment decisions that support a more decentralised energy production. Profits gained from grid management could be reinvested into the expansion of renewable energy sources to substitute fossil fuels and nuclear energy in the long-term. Ultimately, the remunicipalisation of privately-owned energy distribution grids detaches the maxim of profit maximisation from grid management and enables the latter to refocus on the opportunities for the implementation of the energy transition, the creation of a non-nuclear future, the support of climate mitigation and energy security as well as its general responsibility as a service to the common good.

4.3 The Remunicipalisation of energy distribution grids in Hamburg In Hamburg, the idea of remunicipalising the energy distribution grids fell on fertile ground. In June 2010, only two months after the human chain of the anti-nuclear movement against the national energy policy, the citizens’ initiative Our Hamburg – Our Grid formed up. For the purpose of this research, the remunicipalisation of the energy distribution grids in Hamburg has been divided into three different phases (Figure 11). Phase I started in 2010 with the formation of the citizens’ initiative Our Hamburg – Our Grid that paved the way towards the political decision of the remunicipalisation by referendum in 2013. Phase II began after the referendum in September 2013, comprising its implementation, a process that already is partly sketched out until 2019 with the repurchase of the district heating distribution grids. Phase III refers to the long-term dimension of the remunicipalisation and its effect on Hamburg’s climate and energy policy, with a clear direction towards renewable energy for climate mitigation. Consequently, the third phase refers to a future, where the remunicipalisation has not only been implemented in terms of ownership over the grids, but also with regard to a transition towards a climate friendly and renewable energy sector in Hamburg. Wageningen University - 42 - MSc. Thesis Environmental Policy Group

Figure 11: The three phases of the remunicipalisation process in Hamburg . The ‘Today’ marker stands for the end of the analysis period in this thesis. Wageningen University - 43 - MSc. Thesis Environmental Policy Group

4.3.1 Phase I (June 2010 – September 2013) The idea of the remunicipalisation emerged in May and June 2010 after many civil and environmental organisations situated in Hamburg had participated in the organisation the 120 km long chain of people protesting against nuclear power. In June 2010, the non-partisan citizens’ initiative Our Hamburg – Our Grid officially formed as an alliance of environmental associations, the German protestant church, consumer organisations and civil society. All shared the objective to fully remunicipalise the city’s energy distribution grids with the expiry of the concession agreements at the end of 2014. Among the six core organisations was the Hamburg state association of Friends of the Earth Germany (BUND Hamburg), the citizens’ initiative Moorburgtrasse stoppen!, the department Deacony and Education at the Evangelical-Lutheran congregation Hamburg4, Robin Wood, attac Hamburg and the Hamburg branch of the consumer association Verbraucherzentrale Hamburg (VZHH) (Fig. 12).

Figure 12: Our Hamburg – Our Grid formed by six core organisations and over 50 supporting organisations. On 5th of July 2010, the initiative announced its intentions for a full remunicipalisation of the energy distribution grids in Hamburg with a press release (VZHH, 2010). Their demands were formulated in the official referendum text mirroring the long-term ambition of the initiative to

4 Original in German: Diakonie und Bildung des Evangelisch-Lutherischen Kirchenkreises Hamburg Ost Wageningen University - 44 - MSc. Thesis Environmental Policy Group initiate a fundamental transition in the energy sector towards renewable energy, as a proactive approach to climate mitigation:

The Hamburg Senate and State Parliament are undertaking all necessary and legitimate steps in a timely manner, in order to fully remunicipalise the Hamburg electricity, district heating and gas grid in 2015. The mandatory target is a socially just, climate- friendly and democratically controlled energy supply from renewable energies.5

(Our Hamburg – Our Grid 2010)

The referendum text can be separated into two core targets. First, to utilise the window of opportunity determined by the expiring concession agreements for a 100% remunicipalisation of all three energy distribution grids, consisting of electricity, gas and district heating. Second, the long-term objective of a sustainable future characterised through an energy sector that is no longer a mean for profit maximisation, but instead dedicated to the common good, as well as environmental protection and conservation of natural resources. Democratic control appears to become a key in this regard, since private corporate interests cannot meet these expectations.

Hamburg’s legislative body consists of the State Parliament and the state government, the Senate. The State Parliament is responsible for passing laws, setting the state’s budget and electing the head of government, the First Mayor of Hamburg (Official Hamburg Website 2016). The Hamburg Senate constitutes the administration of the city-state in form of ten departmental authorities, such as the Authority for Environment and Energy. Each authority is led by a Senator, which is an equivalent position to a state minister in other German federal states (ibid.). According to the Hamburg constitution, the legal procedure towards a referendum involves three stages. On the first stage, a citizens’ initiative must carry out a public initiative, which includes the collection of 10,000 signatures of eligible voters within six months. In case of success, the State Parliament is obliged to confer and decide on the matter within four months, including a hearing of the initiators. The second stage consists of a petition for a referendum, in case the State Parliament has rejected the public initiative at the first stage. A petition for a referendum requires 5% of all eligible voters in Hamburg (approx. 60,000 people) to sign the petition within three weeks. A successful collection of the 60,000

5 Original in German: „Senat und Bürgerschaft unternehmen fristgerecht alle notwendigen und zulässigen Schritte, um die Hamburger Strom-, Fernwärme- und Gasleitungsnetze 2015 wieder vollständig in die Öffentliche Hand zu übernehmen. Verbindliches Ziel ist eine sozial gerechte, klimaverträgliche und demokratisch kontrollierte Energieversorgung aus erneuerbaren Energien.“ Wageningen University - 45 - MSc. Thesis Environmental Policy Group signatories follows another four months for parliamentary consultation and second hearing of the initiative. Third, if the request is again rejected, the initiators can officially register a referendum, which requires a majority voting in favour of the initiative while, at the same time, clearing an approval quorum which depends on whether the referendum takes place parallel to another election.

At first, Our Hamburg – Our Grid received little attention, as the governing coalition between the conservative party (CDU) and the Green Party was struggling after the resignation of the First Mayor of Hamburg Ole von Beust (CDU) from his office in July 2010. The coalition did not recover from this setback and hundred days later in November 2010, the black-green coalition broke apart and new elections were scheduled for February 2011. With 48.4% the social democrats (SPD) won the election, achieving the absolute majority of seats in the Hamburg State Parliament. In its electoral programme, the SPD emphasised the importance of strategic influence over the gas, electricity and district heating distribution grids as a measure to implement the energy transition by “regaining scope for action in the energy policy […]”6 (SPD Hamburg 2011: p. 16). Directly after the elections, the new First Mayor Olaf Scholz started to negotiate with E.ON and Vattenfall over a 25.1% partial remunicipalisation of the grids.

During the ongoing negotiations, Our Hamburg – Our Grid cleared the second stage of the referendum process by collecting more than 116.000 signatures in a petition for a referendum within three weeks in June 2011, almost double the required amount. Despite this success of the citizens’ initiative, Olaf Scholz and the city government continued to merely negotiate for a partial remunicipalisation of 25.1%. In November 2011, the Hamburg State Parliament formally rejected the demand to remunicipalise 100% of the local energy distribution grids on the second stage of the referendum process. Instead, after months of negotiations, the city government announced to repurchase 25.1% of the shares of the electricity, gas and district heating grids for 543.5 million Euros by signing cooperation agreements with Vattenfall and E.ON. Both agreements carry the title “Energy Concept for Hamburg” and were presented as corner stones for the city to “regain scope for action in the energy policy to implement the urgently needed energy transition, consequently and emphatically” (Bürgerschaft Hamburg

6 Original in German: “Handlungsspielräume in der Energiepolitik zurückzugewinnen […].“ Wageningen University - 46 - MSc. Thesis Environmental Policy Group

(2011: p. 1)7. In December 2011, a meeting between the First Mayor Olaf Scholz and representatives of Our Hamburg – Our Grid did not lead to an agreement. Defending the decision of the 25.1% agreement Olaf Scholz stated that it would “ensure the city sufficient influence on all decisions [vis-à-vis Vattenfall and E.ON]“ and urged the initiative Our Hamburg – Our Grid to carry out their referendum soon to be able to “start with the energy transition now” (TAZ 2011).

In January 2012, Our Hamburg – Our Grid sought for a final decision by formally requesting a referendum, which was scheduled for the next major election day, the federal elections in September 2013. Within the one year and nine months long run-up to the referendum, the political discussion in Hamburg on the question of ownership over the energy distribution grids intensified, causing a polarisation in the city into two opposing campaigns. A massive opposition was forming up against the citizens’ initiative, including the social democratic (SPD), the conservative (CDU) and the liberal (FDP) parties, as well as numerous and powerful industry and trade organisations, such as the Chamber of Commerce, and the energy companies Vattenfall and E.ON themselves. From the political parties represented in the Hamburg State Parliament only the green (Bündnis 90/ Die Grünen) and the left (Die Linke) party supported Our Hamburg – Our Grid. In general, the No-campaign was superior in terms of political influence, power and resources. Yet, in February 2013, a representative survey among the Hamburg citizens on behalf of the local newspaper Hamburger Abendblatt revealed 64% of the Hamburg citizens in favour of a 100% remunicipalisation, and merely 20% opposing the initiative and 14% of the respondents remaining undecided (Hamburger Abendblatt 2013).

Until September 2013, the public approval of a full remunicipalisation dwindled. A few weeks before the referendum, the result remained entirely uncertain. The governing SPD and especially Vattenfall did their outmost to convince the Hamburg citizens to vote ‘No’. With the electricity and district heating grid at stake, Vattenfall was massively campaigning against the referendum, including a broad presence in the media and advertisement, such as special supplements in local newspapers praising Vattenfall and the partnership with the City of Hamburg through the 25.1% agreement. One of these supplements was published in the

7 Original in German: „[…] Handlungsspielräume in der Energiepolitik zurückzugewinnen und damit die dringend notwendige Energiewende in Hamburg konsequent und mit Nachdruck voranzutreiben.“ Wageningen University - 47 - MSc. Thesis Environmental Policy Group tabloid BILD in August 2013 and consisted of 16 pages, while smaller versions of eight pages were published in the newspapers WELT and the Hamburger Abendblatt.

The No-campaign focused on and advertised two messages. First, a full remunicipalisation of the grids would be too expensive for the city and a burden for the taxpayer. Second, energy distribution grids were just cables and pipes, consequently their ownership would not be decisive for implementing the energy transition. This resulted into slogans such as “Day-cares instead of Cables”8 (Klimaretter.info 2013) and “Two billion for the energy distribution grids? Not with my money”9 (Die Welt 2013), which the No-campaign used to marginalise the remunicipalisation in comparison to other, in their view, more pressing topics on the political agenda.

On the opposite, Our Hamburg – Our Grid continued to argue that public ownership over the energy distribution grids was not only a key matter of concern in terms of basic public services, but also a prerequisite for the implementation of the energy transition and a proactive climate policy in Hamburg. Public ownership over the grids was seen as a wise investment in the future, ensuring democratic control over grid operation and management. In this line of thinking, the common good and climate action were prioritised over economic interests. On 22 September 2013, 50.9% of the Hamburg citizens voted with ‘Yes’ and adopted the referendum text with immediate and binding effect.

4.3.2 Phase II (September 2013 – December 2016) On the night of the election, the SPD-led Hamburg city government accepted the defeat and presented a plan to implement the referendum decision, consisting of a double strategy that the State Parliament adopted two days later (Bürgerschaft Hamburg 2013). The State Parliament commissioned the Senate to start negotiations with Vattenfall and E.ON to determine whether an additional acquisition of the remaining 74.9% of the shares is possible. In case the negotiations would fail, the city government simultaneously prepared a second pathway, including the unravelling of the 25.1% agreement and further prerequisites in order to participate in the upcoming new allocation of the concessions for all three grids with its own municipal company. Although the concession agreements for gas and electricity would not expire until the end of 2014, the new concession procedure for electricity began on 15

8 Original in German: „Kitas statt Kabel.“ 9 Original in German: „2 Milliarden für den Netzkauf? Nicht mit meinem Geld“ Wageningen University - 48 - MSc. Thesis Environmental Policy Group

January 2014. Consequently, the city government had about three-and-a-half months to negotiate an agreement that had to be in accordance with the referendum decision. Due to this narrow time frame, the city government prioritised negotiations with Vattenfall on the remunicipalisation of the district heating and electricity distribution grids, while it postponed the gas grid negotiations with E.ON.

On 16 January 2014, the Hamburg Senate and Vattenfall announced an agreement on implementing the referendum decision for the electricity and district heating grid. This included the purchase of 74.9% of the remaining shares of the electricity distribution grid. The price of 550 million Euros is equivalent to four times the amount paid in 2011 for 25.1%. With the ownership over the grid, the City of Hamburg also successfully acquired the electricity concession agreement in June 2014 for a period of 20 years from 1 January 2015.

In terms of district heating, the city government negotiated a call option to purchase the remaining shares of the grid in 2019. Until then, the 25.1% participation of the city in the district heating distribution grids would remain in place (Bürgerschaft Hamburg 2014a). The contract also outlined two different scenarios for the purchase of the remaining 74.9% shares in 2019. Scenario 1, the so-called “GuD-Scenario” (ibid. pp. 10-11), included the building of a gas and steam power plant to replace the outdated coal-fired power plant in Wedel in Hamburg’s west. The city planned to come to an agreement on the necessary investments in collaboration with Vattenfall until the end of 2015 in order to build the new power plant until August 2018. In this scenario, the purchase price for the remaining shares and operational facilities, including the gas and steam plant was determined by estimating a minimum corporate value of 1.15 billion Euros at the due date of the city’s call option on 1 January 2019. Scenario 2, the so-called “Alternative Scenario” (Bürgerschaft Hamburg 2014a: p. 11) included the possibility of no agreement with Vattenfall on replacing the coal power plant in Wedel, which then would become public ownership in 2019. This led to a lower estimation of the total corporate value to a minimum price of 950 million Euros.

In December 2014, the city government and E.ON negotiated another call-option to purchase the remaining 74.9% shares of the gas distribution grid on 1 January 2018. The 25.1% participation in the gas grid continues until these shares are acquired. The price for the remaining shares amounts to 275 million Euros, while the total price, including all necessary operational facilities, accounts for 355.4 million Euros (Bürgerschaft Hamburg 2014b). Wageningen University - 49 - MSc. Thesis Environmental Policy Group

In December 2015, scenario 1 of building the gas and steam power plant to substitute the coal-fired power plant in Wedel was excluded putting the focus on the Alternative Scenario 2. This scenario would require a longer runtime of the Wedel coal plant until alternative sources could be established that provide the annual 1,100 to 1,400 GWh of heat covering the demand of 180,000 households. Since the power plant from the 1960s does not meet the stringent emission limits coming into effect in 2019, Vattenfall announced the investment of 83.5 million Euros in February 2016 in order to upgrade the coal plant and extend its runtime to at least 2021.

The question for alternative heat sources triggered an intensive discussion on the substitution of heat coming from Wedel among the State Parliament members, the Senate and former Our Hamburg – Our Grid activists. As a result, the Hamburg Authority for Environment and Energy commissioned feasibility studies to explore potential heat sources form (renewable) energies. (Renewable) alternatives included the use of industrial waste heat, heat from waste incineration plants and waste wood, as well as gas-powered engines that are supposed to become hydrogen-fuelled engines in 2030-2035 (Ederhof et al. 2016). So far, a decision on district heating is still pending and the substitution of the outdated coal-fired power plant in Wedel remains the main controversy among the former opponents and proponents of the remunicipalisation. The various discussed scenarios determine the future share of renewable energy in district heating, simultaneously becoming a landmark decision for Hamburg meeting its climate mitigation targets. These include a total CO2 emission reduction of 50% until 2030 and 80% by 2050 as compared to 1990 levels (Bürgerschaft Hamburg 2015).

In terms of implementing the second part of the referendum text referring to democratic control [“The mandatory target is a socially just, climate-friendly and democratically controlled energy supply from renewable energies.” (Our Hamburg – Our Grid 2010)], the Senate formally established an Energy Grid Advisory Council in March 2016 (Bürgerschaft Hamburg 2016). The council is integrated in the Hamburg Authority for Environment and Energy and consists of 20 members representing society and civil organisations, science, business, industry and the local grid companies Vattenfall and E.ON. The last two remain main shareholders of the district heating and gas distribution grid until the respective call options are exercised. Regular meetings are scheduled twice a year, which are open to the public. This enables citizens to directly participate by bringing forward questions or written proposals. In 2016, public meetings were held in April, June, September and November, as well as internal meetings, for instance in July. The additional amount of meetings was Wageningen University - 50 - MSc. Thesis Environmental Policy Group necessary to clarify the role the Energy Grid Advisory Council should have. Before the discussion on the substitution of the coal power plant Wedel began to dominate the meetings of the council, a major dispute referred to the actual influence the council should have on grid-related decision-making. For some, an advisory function was not compatible with the referendum decision, as the latter stipulates “democratic control” (Our Hamburg – Our Grid 2010), leading to controversial debates during the meetings of the Energy Grid Advisory Council (e.g. BUE 2016). A compromise had to be established on a continuum between the council becoming a toothless tiger and being too powerful, slowing down the remunicipalisation process and limiting the operative actions of grid management.

In December 2016, the referendum decision was implemented in terms of the electricity grid. The repurchase of gas and district heating has been scheduled for 2018 and 2019 by the negotiated call options. With regard to the second and more long-term target of the referendum text, an Energy Grid Advisory Council has been established, while the aspects of a socially just and climate friendly energy supply are still to be tackled in Phase III.

4.3.3 Phase III (from December 2016) Phase II already sketched out the full public ownership of the grids in 2019, when gas and district heating are repurchased. Subsequently, the city government is supposed to implement the long-term targets of the referendum decision, including the full substitution of fossil fuels with renewable energies. Such a fundamental transformation in the energy sector could require up to 20 or 30 years. However, the shift to renewable energy is decisive for Hamburg to meet its climate targets in 2030 and 2050. In terms of the referendum’s stipulation of a socially just energy supply, it must be ensured that energy is no longer a subject to business and corporate interests. Instead, it is supposed to become a public service dedicated to the common good with appropriate energy prices.

Wageningen University - 51 - MSc. Thesis Environmental Policy Group

5 The notion of uncertainty in a process of political practice

The remunicipalisation decision and its implementation process in Hamburg exemplify a fundamental transformation of the energy sector in the contexts of climate change, sustainable development and the wish for control in face of an uncertain future. This case demonstrates the challenges that are connected to stepping onto unknown territory in face of an uncertain future. So which are the reasons that led to the coming into being of the process and the decision to remunicipalise the energy sector? In the first section of this chapter, uncertainty is hypothesised as the major challenge and causal mechanism in the remunicipalisation and demarcated against other plausible explanations (5.1). As a result of the iterative empirical analysis to test the hypothesised causal mechanism, key findings on the notion and role of uncertainty in the remunicipalisation process are outlined (5.2) within a detailed narrative explanation for each of the three phases. Identified uncertainties within these phases are thoroughly explained, revealing the main findings, which are underlined with central quotations from the interview data. The quotes were translated from German into English, while the original is included as a footnote. The quotes are referenced in accordance to the line count of each interview transcript, including the name of the interviewee and the number of lines of the quote, e.g. (Seifert, 14-17). The synthesis of results (5.3) summarises uncertainty as a causal mechanism in one scheme, providing an overview of how uncertainty functions in the remunicipalisation process throughout all three phases.

5.1 Hypothesising the causal-mechanism of uncertainty The remunicipalisation unfolds as the concrete outcome Y on the three phases until December 2016 and the near, partly already sketched out future. Plausible explanations for the coming into being of Y, the remunicipalisation, are explicitly provided in the long-term goals of the referendum text. The citizens wanted to achieve a sustainable and nuclear-free future, which requires renewable solutions for the production of energy and an energy sector that is no longer a mean for profit maximisation. Perceiving the latter as a barrier to future sustainable development, the citizens of Hamburg did not trust that this transformation could be implemented with the major energy companies remaining in charge of the grid system. Word associations or combinations like “local power” (Klein 2014: p. 96), ”citizen participation” (Fei & Rinehart 2014: p. VII), opportunities for steering influence in terms of “strong local political influence” (Wagner & Berlo 2015: p. 563) and a general ability to act in favour of the energy transition (ibid.) as well as the lack of “access” (Haggett & Aitken 2015: p. 100) to the energy distribution grids frequently appear in the remunicipalisation context and Wageningen University - 52 - MSc. Thesis Environmental Policy Group already indicate a possible empirical narrative: the desire within civil society to regain control over the energy sector by remunicipalising the energy distribution grids.

This led to the causal force triggering the process towards the remunicipalisation in Hamburg as the starting point to a much bigger transformation, which seems most adequately described as uncertainty about the future. It is not surprising that the pathway towards a future formulated in the referendum text is blurred by uncertainties such a transformation naturally entails. The repurchase of the energy distribution grids constitutes a first and concrete paving stone on this transformative pathway. The future stipulated by the referendum text requires coping and diminishing uncertainty to make the goal of a “socially just, climate-friendly and democratically controlled energy supply from renewable energies” (Our Hamburg – Our Grid 2010) achievable.

However, rival explanations can be identified in terms of the reasons that triggered the civic engagement towards the positive outcome of the remunicipalisation referendum. For instance, the intention to end nuclear power had an influence on the individual vote in the referendum. The power of the German anti-nuclear movement in shaping the public perception on the remunicipalisation question must not be underestimated. The nuclear accident in Fukushima, Japan, caused the German energy policy to refrain from the extension of operating times of nuclear power plants. A nuclear-free future has been one driver for the remunicipalisation decision, but cannot serve as a sufficient explanation for the coming into being of the remunicipalisation (Y).

Instead, it seems more likely that people perceive the remunicipalisation as a prerequisite for the implementation of the energy transition and climate mitigation. The previous protests against the coal power plant Moorburg and the majority of Germans being in favour of the energy transition demonstrate awareness for climate change and the resulting necessity for climate mitigation by shifting towards renewable energy sources. The remunicipalisation can function as starting point of the transformation towards a climate friendly and nonnuclear future, since ownership over the energy distribution grids means to regain political steering capacities and security through political monitoring in the energy sector.

Uncertainty can serve as an explanation for the desire to control the energy sector as a result of distrust towards the private grid operating companies Vattenfall and E.ON. It also comprises the unsettling feeling towards nuclear energy and the complex, intangible problem of climate change. Yet, it can also explain the decision of the Hamburg city government to Wageningen University - 53 - MSc. Thesis Environmental Policy Group repurchase only 25.1% of the shares of the energy distribution grids. This partial remunicipalisation in not only contrasting the target set out by a large part of civil society. It also neglected the expert opinion that a blocking minority is insufficient to achieve substantial political influence in the energy distribution grids to achieve more control and act in favour of the energy transition (Göken et al. 2009). In addition, it ignored the window of opportunity provided by the expiring concession agreements, even though a wide political realisation existed that the privatisation of the grids have given away political control and steering capabilities in Hamburg’s energy policy. At the state party congress in February 2010, the social democratic party (SPD) adopted the resolution “With Energy into the future”10 (SPD Hamburg 2010) that stipulated clear energy policy goals in the context of climate change. Acknowledging the necessity of climate mitigation, the resolution emphasised “to substitute all fossil fuels in electricity and heating supply”11 (p. 2) and advocated for the expansion of renewable energies. In terms of ownership over the energy distribution grids, the resolution “expressly supports the autonomy of city and municipal utilities and the remunicipalisation of the local energy distribution grids”12 (p. 4). However, after being elected with an absolute majority in 2011, the SPD negotiated the 25.1% agreement, which appears as a rather different – not to say contradictory – interpretation of its previous policy goals on the remunicipalisation question.

It seems that other reasons must have played a role for the 25.1% partnership between the private grid operators Vattenfall and E.ON and the Hamburg city government. A possible explanation underlies economic and employee interests, since keeping the financially strong energy companies in the city would safeguard local employment and financial benefits from corporate taxes. It seems reasonable from the perspective of the city government not to put these at risk that the transformation of a private into a municipal company could entail. In this light, the 25.1% agreement can be understood as a political compromise and the result of a double strategy, since the partial remunicipalisation was presented as a success. The cooperation agreements were promoted as energy concepts that would ensure the implementation of the energy transition in Hamburg. Both agreements included extra clauses

10 Original in German: „Mit Energie in die Zukunft“ 11 Original in German: „Wir streben eine Substitution aller fossilen Brennstoffe in der Strom- und Wärme-versorgung an.“ 12 Original in German: „Wir unterstützen ausdrücklich die Eigenständigkeit der Stadt- und Gemeindewerke und eine Rekommunalisierung der kommunalen Versorgungsnetze.“

Wageningen University - 54 - MSc. Thesis Environmental Policy Group that required Vattenfall and E.ON to become active in making the energy distribution grids fit for the future feed-in of renewable energies (Bürgerschaft Hamburg 2011). This also included an agreement on concrete measures that would support the city’s climate and energy policy, for instance by reducing CO2 emissions from district heating and making necessary investments in decentralised and more flexible grids. If the public could have been convinced that the 25.1% agreement was an acceptable solution in terms of sufficient steering influence on the local energy sector, the city government would have reached two goals at once. It would have closed the matter of the remunicipalisation question that polarised the city and avoided a complex and lengthy process inherent to a full remunicipalisation of the energy distribution grids. At the same time, the city government could have maintained its partnership with the private grid operating companies Vattenfall and E.ON, securing employment and regular revenues from the network charges. From the perspective of the city government, the costs and risks of the 25.1% were calculable, while a full remunicipalisation must have appeared as a process full of uncertainties. After more than ten years in the opposition, the SPD celebrated the electoral success of the absolute majority and it seems likely that the new city government had different policy priorities than taking this risk.

As a result, uncertainty can be assumed as an underlying force within the political process of the remunicipalisation. Civil society (organisations) merged to a citizen’s initiative to regain control over the energy distribution grids in response to an uncertain future, while the city government sought to avoid the uncertainty of a 100% remunicipalisation. Instead, the city government’s rejection of the initiative Our Hamburg – Our Grid on the first two stages of the referendum process intensified and polarised the public on the matter, which is likely to have contributed to the successful outcome for the remunicipalisation proponents in the referendum. Hypothesising uncertainty as the causal mechanism between X – the desired transformation of the referendum text to regain certainty and control – and Y, the remunicipalisation, translates to the following formula (Fig. 13):

Figure 13: The hypothesised causal mechanism of the energy grid remunicipalisation in Hamburg Wageningen University - 55 - MSc. Thesis Environmental Policy Group

Under the condition that X causes Y and not vice versa, it is the desire for local power, control and steering influence (X) that caused the remunicipalisation (Y) in the face of an uncertain future in terms of climate change, the implementation of the energy transition and a non-nuclear future. Y is perceived as a first, concrete and tangible step on the pathway stipulated in the referendum text (X), while uncertainty is presumed to function as the causal mechanism in the intervening process between X and Y.

Recalling the detailed description on the empirical testing of the hypothesised causal mechanism (see 3.4), the inductive research pathway of explaining-outcome process tracing is updated (Fig. 14, step 2). During the subsequent step 3 of the inductive research pathway the causal mechanism is tested in four iterations, leading to the establishment of a minimally sufficient explanation for the outcome.

Figure 14: Inductive research pathway in explaining -outcome process-tracing (adapted from Beach & Pedersen 2013: p. 20)

Wageningen University - 56 - MSc. Thesis Environmental Policy Group

5.2 Findings on uncertainty in the remunicipalisation process In the following, the findings on uncertainty are structured according to the three phases of the remunicipalisation process. The final code system comprises 16 codes and 4 sub-codes (Fig. 15, Table 3). They were in total assigned 720 times to 12 interview transcriptions.

Figure 15: Overview of all assigned codings on uncertainty in the interview data Wageningen University - 57 - MSc. Thesis Environmental Policy Group

Example

Phase I Phase II Phase II Code Explanation [Comprises long-term uncertainty inherent to [Comprises uncertainty before the referendum [Comprises uncertainty after the referendum decision. Starts: 2010, Ends: 22.09.2016] decision and during the implementation of the the referendum decision and comprises remunicipalisation process. Starts: 22.09.2016, anything that is referred to after 2019.] Ends: 01.01.2019]

Comprises those uncertainties characterised by randomness and The legislation in Hamburg certainly creates a specific chance emerging from dynamics legal framework and then we have decided to plan for […] the electricity market collapsed and no one knew *ontic in time, space or (natural) the next scheduled city council election – later they how to proceed […]. (Schaal, 386-387) variability, thus being inherently were brought forward, but we could not know that at unpredictable that time. (Siegler, 49-52)

Unfortunately it [the coal power plant in Wedel] is And then there is the creative assignment regarding being upgraded again for three more years, […]. The the question: How does the remunicipalised area look Senate, the Authority [for Environment and Energy] like someday X within this city? This includes district had no information about the condition of the district Epistemic uncertainty emerges Yes of course this was a discussion in the state heating and gas. So how does then – the parent heating distribution grid in Hamburg. At the same from the incompleteness or executive committee [of the SPD] and we did not company that is ‘Hamburg Energienetze GmbH‘, time, it [the Authority] was supposed to present plans imperfection of knowledge due know yet how expensive a grid purchase [would HEW – how does this look like later and how does the on how the power plant in Wedel can be substituted. *epistemic to limited, inaccurate or become], how the condition of the grids [is like] and house [means: the organisational structure] then really Without the provision of the information from insufficient data material, the that were all, so to speak, unknowns, because this look like? Because now they are making all the Vattenfall, it is not really possible to make a valid inability to reduce and capture information naturally doesn’t lie on the street. (Schaal, cornerstones for it, the electricity grid is already there planning and you rely on what Vattenfall is presenting. complexity. 107-110) and someday there will be gas and then perhaps the And at the moment it very much looks like that the district heating [included]. […] it is out task […] to things Vattenfall has said over all these years, were on see what kind of construct is forming up there later. the whole at least incomplete, if not false. (Jersch, (Morgenroth, 515-523) 181-188)

Because the major concern we had was, when this is a […] where the real sophisticated expert reports that 100% public company in the future, then it is When in 2019 the [district heating] grid will be were able to have insight into the documents of the controlled by a committee of the parliament, which is transferred, then we receive all the data and epistemic uncertainty due to lack companies. That was the problem that also the mayor meeting every six months and on top of that behind *closed doors information from Vattenfall. Today these are lying in a of transparency could not [get access] to the filing cabinet of Mr closed doors. This means that we would have the same secret data room […], but that is not the way how you Wasmuth [Vattenfall CEO]… laughs (Schaal, 336- level of opacity as at times with Vattenfall and E.ON. can plan for the future. (Ederhof, 464- 468) 337) And that was something we did not want, right? (Ederhof, 28-32) *ambiguity Ambiguity uncertainty originates No, I believe that the other side was significantly And the fact is, that here the companies are becoming Simply because the understanding of the energy Wageningen University - 58 - MSc. Thesis Environmental Policy Group

from a variety of possible characterized by the industry and people, who deal strongly involved. This being against each other, here transition – short break – and also the regulated interpretations of a situation and with the economy and economic business. They knew the economy, there politics or some freaks, who have electricity sector indeed is a rather special comprises normative uncertain- very well that the city could run that [the distribution renewables and the energy transition in their minds is understanding, with a high uptake, what sometimes ties arising from the plurality of grids]. We had them – that was like “Resist the no longer the case. Instead all have actually claimed does not exist on management level, I would have or frames that are attached to beginnings” politics. They said: “Oh god, when the the goal to implement the energy transition for them could imagine that it would have been more difficult decision-making, when various people are now beginning to demand that the energy and that is I believe a very good thing. This has also to carry out these investments, as they are foreseeable actors are involved. distribution grids are transferred to the public hand, been accelerated by the referendum. And it is also the today. […] based on my experiences, I believe that for what will be next? Shall then all residential buildings case for the city that we have more people interested Vattenfall it would have been more difficult to somehow become public?” […] Well that was the fear for the issue energy transition than perhaps somewhere implement this development just as quickly. from the – short break – remunicipalisation-wave also else. (Schaal, 626-632) (Heieis, 1055-1062) in all other areas and not only in the, the energy distribution grids. […] these are money printing machines, grids are money printing machines. […] They [Vattenfall and E.ON] wanted to keep them of course. (Hansen, 551-562) Uncertainty levels unfold on a continuum between determinism And because Vattenfall wants to leave Germany and and indeterminacy. These levels And then, a giant uncertainty, actually the biggest was: this constitutes a much bigger uncertainty than *level have been further specified how does the city deal with the [referendum] decision? changing the owner [of the grid] once. (Hansen, 571- constituting five intermediate (Hansen, 336-37) 73) stages between complete certainty and total ignorance. Above all, the second challenge was then, ultimately, during the petition for a referendum – the second stage With regard to district heating there are and were Uncertainty emerging form legal – to achieve the necessary number of signatories *polity substantial legal uncertainties and problems […] or procedural questions. within three weeks. In my view this hurdle is really (Ederhof, 22-23) high. You only have these three weeks time […] to collect around 65.000 signatures. (Braasch, 131-135) Uncertainty emerging from political opposition, power, But to date the call-option merely remains a so-called And then, a giant uncertainty, actually the biggest was: discourse etc. Makes it difficult unilateral option. That means that the City of Hamburg how does the city deal with the [referendum] decision? to predict the outcome of a can exert it [the option] […] or not, then it would If we win, the city can delay and work sloppy […] to *politics political conflict, negotiations or expire. And in the worst case we have then a new not implement the referendum decision. They would consensus building processes due Senate […] but […] provided that the social democrats probably pretend to do so […] but with a quality that it to competition between interest and the Green Party remain in power […] the Senate is clear that this cannot work. (Hansen, 336-341) groups or individuals for power will draw this call-option. (Ederhof, 420-425) and leadership. Uncertainty emerging from […] in the meantime the terrible accident of Well, the biggest uncertainty is at the moment, *external interests or power relations one Fukushima happened and the whole city of Hamburg whether we will be able to establish a mutual cannot control or influence was shaken and stirred from energy-political questions agreement with Vattenfall beforehand […] there it is Wageningen University - 59 - MSc. Thesis Environmental Policy Group

and the energy transition. (Ederhof, 211-212) about the fact that we are relying on the cooperation with Vattenfall from now until 2019 […] if we want to initiate developments before that time frame that are necessary from our perspective of climate policy. (Kerstan, 83-87) […] how does the future distribution grid look like if the energy transition ultimately [is implemented]? What has to be done? What must be invested? Well, a grid as it is in Hamburg, is planned and structured from the past. There have been large power stations Uncertainty emerging from the It of course depends on what kind of solution we are and these large power stations delivered their And one of the main tasks was at that time [to explain] possible spectrum of the policy able to implement? Is it realistic, is it affordable […]. electricity into the high-consumption hot spots. Today the interrelations – how does electricity work, how pathway in form of insufficient The goal is that we know until the end of the year we have a development that includes many, small, *policy pathway functions district heating – to the decision-makers knowledge or information, as where we are heading so to say. There […] will be a decentral feed-in points […] how does the distribution involved, who have started then to think about how a well as choices and options model which will be examined for economic grid of the future look like? And at this point it already remunicipalisation could look like. (Heieis, 135-138) during concrete policy-making efficiency, general feasibility and affordability. appears today that this requires enormous investments (Schaal, 602-607) to make a public distribution grid […] compatible with the issue of the energy transition and the renewables. This will be a complete reconstruction. […] Therefore, the energy transition will cost us a lot of money. (Heieis, 528-546) Well, Plan B is nonsense. There would have been a decision for or against the citizens’ initiative. And in We had sketched out two pathways in the contracts. uncertainty is indirectly expres- case the initiative would achieve a majority, which The first pathway has been basically missed, because sed by possessing over they narrowly did, the party [the SPD] had prepared a it appeared […] as not possible for demonstrable *flexibility alternative policy pathways or plan how the decision or the will of the people could reasons and not wise to make the decision over a options --> if Plan A does not be implemented […]. And in this respect, already succession plan for the coal power plant in Wedel until work immediate shift to Plan B during the election night […] a proposal was presented the end of last year. (Schaal, 379-382) […]. (Schaal, 260-264) […] we ultimately have major problems in the actual And then, a giant uncertainty, actually the biggest was: implementation of the investments […],not only how does the city deal with the [referendum] decision? electricity and gas build in the city, everyone builds If I am honest, we have not included all necessary If we win, the city can delay and work sloppy […] to something in the city and the city must then still Uncertainty emerging during measures in our climate plan for 2030 which can *implementation not implement the referendum decision. They would function somehow. […] at the same time, an policy implementation. ensure that we will safely reach this target. (Kerstan, probably pretend to do so and say: “Yes, we are doing electricity grid must for sure function any time of the 119-121) it.”, but with a quality that it is obvious that this cannot day, 24 hours, 7 days. […] we are working here on work. (Hansen, 336-341) running engines. We change the piston while the engine is running. (Heieis, 603-609) *path Path dependency creates uncer- […] it is extremely sluggish to work against such a Well, a grid as it is in Hamburg, is planned and dependency tainty, since past actions are system and this also includes the authority [for structured from the past. There have been large power Wageningen University - 60 - MSc. Thesis Environmental Policy Group

determining the future and environment and energy] […]. The legal department, stations and these large power stations delivered their change is bound to the context- which is taking a formal position on issues [in the electricity into the high-consumption hot spots. Today specific conditions and structures context of the remunicipalisation] is the same legal we have a development that includes many, small, that are already there. department as five years ago. (Siegler, 711-714) decentral feed-in points […] how does the distribution grid of the future look like? (Heieis, 530-537) It of course depends on what kind of solution we are Well, Olaf Scholz has this principle: it must be able to implement? Is it realistic, is it affordable […]. affordable, also including the district heating […] and there has been an enormous concern, because The goal is that we know until the end of the year consumers. It cannot be the case that great investments also our financial experts said: “This is too expensive *financial where we are heading so to say. There […] will be a are made, which then negatively affect the prices and and the risk is too big and we don’t know what we are model which will be examined for economic then it says: “Now that the city owns the district buying.” (Schaal, 70-71) efficiency, general feasibility and affordability. heating grid, it cannot pay anymore.” (Schaal, 530- (Schaal, 602-607) 534)

He [the newly elected First Mayor of Hamburg Olaf […] we are already in an intensive dialogue with the Scholz] has found so many things to be done and tried district heating operator Vattenfall on how to to bring things in order everywhere. The Elbe substitute an old coal power plant in Wedel even Philharmonic Hall […], the school reform […] before the acquisition of the company […] so that we Uncertainty that emerges due to thousand things. And in the terms of the energy policy are not starting to plan when we receive the ownership *complexity the complexity of the matter. he probably preferred to speak to two companies and over the company and we can substitute this coal two CEOs instead of broad diversity of actors and power plant in a significantly shorter timeframe with opinions. This could have been an understandable environmental and climate friendly alternatives. This reason from a genuine humanly perspective […]. is a complex and not easy process. But I am rather (Ederhof, 267-272) optimistic that we can be successful in this regard. (Kerstan, 61-68) Obviously this is a difficult question, because it is kind of speculative. But I could imagine that […] if Vattenfall would have remained shareholder [of the grid operating company] it would have been more Because the major concern we had was, when this is a difficult [...] to implement certain investments. Simply […] to explain to the people about what it means to 100% public company in the future, then it is because the understanding of the energy transition – Uncertainty emerging from have the energy distribution grids in the hands of controlled by a committee of the parliament, which is short break – and also the regulated electricity sector private companies, which are purely profit-oriented, meeting every six months and on top of that behind indeed is a rather special understanding, with a high *trust weariness or concrete distrust against organisations, political and not having steering opportunities in the city, closed doors. This means that we would have the same uptake, what sometimes does not exist on management actors especially with regard to the energy transition. (Jersch, level of opacity as at times with Vattenfall and E.ON. level, I would have or could imagine that it would 65-67) And that was something we did not want, right? have been more difficult to carry out these (Ederhof, 28-32) investments, as they are foreseeable today. […] based on my experiences, I believe that for Vattenfall it would have been more difficult to implement this development just as quickly. (Heieis, 1053-1062) Wageningen University - 61 - MSc. Thesis Environmental Policy Group

[…] I have already been involved in activities on Uncertainty about the future climate protection and against nuclear power, as well […] the employees became restless and did not know including narratives of environ- Yes, it might well be completely different in ten, as for the massive expansion of renewable energies, what is going to happen to them and then they mental protection, inter- fifteen, twenty years, for example when exorbitant *future / change generational justice climate because […] it simply is my sincere wish that we received the commitment regarding wage agreements amounts must be invested or if any other things mitigation and generally human beings treat our planet in such a way that even and all other agreements regarding the future. happen. (Glawe, 254-256) protecting the planet through after us – well, for instance my son can still live here (Morgenroth, 51-53) concrete actions in a good way. (Hansen, 61-64) […] the liberalisation of the energy market did not have the desired effect and on the contrary, politics even lost considerable control. And there has been the need on the local level that policy-making is more on behalf of the citizens again, to shape the energy supply together with the citizens in combination with a stronger inclusion of the public interest, where climate protection, regional value creation and renewable When in 2019 the [district heating] grid will be Uncertainty expressed through energies would play a more prominent role. This can The city has direct instruments at hand to shape and transferred, then we receive all the data and the wish for control over the be to some extent achieved with the grids. With the design the energy transition. It [the city] has much *control future, e.g. in terms of information from Vattenfall. Today these are lying in a different grids this is differently well manageable. For more know-how about the energy transition than implementing the energy secret data room […], but that is not the way how you us it was paramount that particularly district heating – before […]. (Hansen, 435-437) transition, climate mitigation etc. can plan for the future. (Ederhof, 464- 468) a non-regulated area, which would also include the production capacities and thus also become able to determine over the utilised fuel. Ultimately, the idea behind it was based on the goal that we can shift district heating away from coal towards renewable energies, including industrial waste heat and decentral solutions to achieve our climate mitigation goals. (Kerstan, 23-36)

Table 3: This table depicts a general summary of the findings on the role of uncertainty in the remunicipalisation process , including codes, code descriptions and examples. The quotes are referenced in accordance to the line count of each interview transcript, including the name of the interviewee and the number of lines of the quote, e.g. (Seifert, 14 -17).

Wageningen University - 62 - MSc. Thesis Environmental Policy Group

5.2.1 Uncertainty in Phase I

Figure 16: Code relations in Phase I: number of coded statements on uncertainty within Phase I extracted from the interview material. During Phase I, the implementation of the energy transition was fairly uncertain due to concerns about climate change and the dangers of nuclear power (*future/change) and the general feeling to have lost control (*control) and trust (*trust) due to a lack in access and influence on the energy sector (Fig. 16). At the same time the initiated transformation needed a political decision to become effective as a chosen policy pathway, while the political struggle during the run up to the referendum decision contained a broad spectrum of uncertainties in particular in terms of the process of the political referendum procedure (*politics).

One of the core elements of the hypothesised causal mechanism of uncertainty has been determined as the citizens’ desire for local power to regain control over the developments of the future. This motivation underlies a deep notion of uncertainty about how the future will unfold in the face of climate change and an appropriate energy policy in this context (*control & *future/change). The two objectives formulated in the referendum text exemplify the desire for control and for direct access to shape the developments of the future and regain certainty. The citizens’ initiative Our Hamburg – Our Grid sought “to have access to the energy Wageningen University - 63 - MSc. Thesis Environmental Policy Group

distribution grids so that they are utilised for the energy transition” (Hansen, 84).13 A full remunicipalisation of the energy distribution grids was perceived as a prerequisite for the second, more long-term objective: an energy sector that is democratically controlled instead of being an object to corporate interests. Detaching the energy sector from the latter would constitute the basis for a climate-friendly energy production from renewable sources that should redefine energy provision and the management of energy distribution grids as a public service dedicated to the common good. Manfred Braasch, one of the leading lights of Our Hamburg – Our Grid describes the hopes and expectations of the remunicipalisation initiative, confirming the significance of the energy distribution grids for regaining control and certainty over the implementation of the energy transition. The latter pervades Phase I and goes along with the desire for a proactive climate policy by remunicipalising the grids:

The BUND [Friends of the Earth] joined the initiative as environmental association, because we are clearly convinced that the energy distribution grids, so electricity, gas and district heating, constitute a central control instrument for the energy transition and the expansion of renewable energies. Especially with the district heating grid in Hamburg, which also includes the [heat] generation facilities, the transformation can be brought forward and in this [the transformation] we have significantly more trusted in the city with elected representatives than a commercially-oriented company. (Braasch, 494-499) 14

The distrust (*trust) against the private energy companies assuming them being rather interested in profits than investing into the energy distribution grids to make them fit for the energy transition created a direct causal force affecting the outcome of the referendum. The citizens chose certainty of steering opportunities and controlling the energy sector over the potential uncertainties the transformation of remunicipalising grids might have entailed. This consideration constitutes a conscious decision against neoliberalism and the privatisation of public services. The remunicipalisation became a deliberate political decision, where the technicalities of how and to what costs and risks the energy distribution grids can be repurchased receded into the background. Theo Christiansen, another leading figure of Our Hamburg – Our Grid, describes this as an explanation for the success of the citizens’ initiative

13 „Zugriff auf die Netze zu haben, dass die im Sinne der Energiewende eingesetzt werden.“ (Hansen, 84) 14 „Der BUND bei dieser Initiative mitgemacht, weil wir der klaren Überzeugung sind, dass die Energienetze, also Strom, Gas und Fernwärme, ein zentrales Steuerungsinstrument für die Energiewende und für den Ausbau der erneuerbaren Energien ist. Man kann gerade mit dem Fernwärmenetz in Hamburg, wo ja auch die Erzeugungsanlagen dann dabei sind, die Umgestaltung voran bringen und das haben wir der Stadt mit gewählten Vertretern sehr viel stärker zugetraut als einem, ja privatwirtschaftlich ausgerichteten Unternehmen.“ (Braasch, 494-499) Wageningen University - 64 - MSc. Thesis Environmental Policy Group

in the referendum. The choice of whether the energy distribution grids should be remunicipalised became a political gut decision rather than carefully weighing up the arguments of the Yes- and No-campaign against each other:

[…] a majority of the people probably did not know in detail, whether our arguments were the right ones or not. But the political affect towards the trend of making a business of everything, [for instance] the hospitals [refers to the privatisation of hospitals few years earlier], […] and the energy supply, in other cities water, that is something much more symbolic than electricity or gas. […] this has caused at least an impulse to the political debate that was rather beneficial for us. (Christiansen, 299- 306)15

The public scepticism (*trust) of the idea that the energy transition can be achieved in cooperation with energy companies also explains why the City of Hamburg failed with its plan of a partial remunicipalisation of 25.1% of the grid infrastructure. The negotiation of this blocking minority was rather perceived as a wagging finger than a fundamental change to the neoliberal idea of making a business of everything. In fact, the 25.1% agreement would have preserved the status quo of the energy companies Vattenfall and E.ON remaining in charge of the energy grid operation, while the city government would remain in the passenger seat rather than making a sincere attempt to regain the steering wheel in the energy sector.

The political conviction that the energy sector should be a public service and not a business unfolded a great political power. This was intensified by the citizens’ initiative drawing an image of the energy distribution grids as a direct lever for the implementation of the energy transition and a proactive approach in terms of climate mitigation. From the perspective of Our Hamburg – Our Grid, the maxim of profit maximisation ruled out the social and environmental dimension they believed should be inherent to grid management and energy supply, which could only be utilised under public ownership:

[…] our basic principle was in fact: energy supply belongs into the public hand. […] that was actually always our basic principle, not only the grids, but also the energy supply does not belong into the hands of private companies so that they can make as much profits as possible there, but instead into public hands in order to – well, as the

15 „[…] ein Großteil der Menschen werden nicht im Detail gewusst haben, ob unsere Argumente die richtigen sind oder nicht, aber der politische Affekt diesem, diese, diesem Trend ne, alles zum Geschäft zu machen, die Krankenhäuser und […] die Energieversorgung, in anderen Städten ist das Wasser ne, das ist ja noch viel symbolhaltiger als der Strom und das Gas. […] das hat, das hat zumindest einen Impuls, in die politische Debatte hier gebracht, der uns ganz gut getan hat.“ (Christiansen, 299-306) Wageningen University - 65 - MSc. Thesis Environmental Policy Group

referendum stipulates: to guarantee a socially-just and climate friendly energy supply. (Siegler, 613-619)16

In this context, uncertainty emerges from a general feeling of not being in control (*control) over landmark decisions of the future, such as the implementation of the energy transition and a deliberate strategy of tackling climate change (*future/change).

Phase I also depicts the notion of uncertainty that originates from the realisation that the privatisation of the energy distribution grids gave away political steering influence and economic interests dominate the energy sector (*control & *trust). Distrust towards the energy companies Vattenfall and E.ON, as well as the desire to regain control became a major driver and source of political power for the citizens’ initiative Our Hamburg – Our Grid. The initiative sought to restore certainty about developing a sustainable future by regaining control over the energy sector:

[…] Our Hamburg – Our Grid was a civil society initiative that wanted put the initiative in politics by direct democracy that the city [government] takes back the former privatisation – namely to restore public ownership in the realm of energy distribution grids, so that the city can simply appear once again as actor in important questions of energy policy and also basically as owner of the grids […]. (Kerstan, 11-15)17

After the liberalisation of the energy market “politics […] lost considerable control” (Kerstan, 25)18 in the energy sector. With regard to the unregulated market of district heating the power of being able to politically act in favour of the energy transition and climate mitigation becomes apparent. As the remunicipalisation of the district heating sectors includes the heat generation facilities, district heating can be “shifted […] away from coal towards renewable energies, including industrial waste heat and decentral solutions to achieve our climate mitigation goals (Kerstan, 34-36).19

16 „[…] unser Grundansatz war eigentlich: Energieversorgung gehört in öffentliche Hand. […] das war eigentlich immer so, so der Grundansatz, nicht nur die Netze, sondern eigentlich gehört die Energieversorgung nicht in die Hand von Konzernen, damit die da möglichst viele Profite machen, sondern in öffentliche Hand, damit die eine – ja wie der Volksentscheid es sagt: eine sozial-gerechte und klimaverträgliche Energieversorgung garantiert.“ (Siegler, 613-619) 17 „[…], Unser Hamburg – Unser Netz war ja eine zivilgesellschaftliche Initiative, die eben den Anstoß in die Politik tragen wollte, durch die direkte Demokratie, dass die Stadt einen Teil der ehemaligen Privatisierung wieder zurück, nimmt, nämlich im Bereich der Netze wieder einen kommunalen Besitz herzustellen, damit die Stadt in wichtigen energiepolitischen Fragestellungen eben auch wieder als Akteur und, und auch als Eigentümer im Grunde genommen […].“ (Kerstan, 11-15) 18 „[…] Politik doch sehr stark an Kontrolle verloren hat.“ (Kerstan, 25) 19 „das Ziel, dass wir im Bereich der Wärmeversorgung weg von […] Kohle kommen müssen, hin zu erneuerbaren Energien, auch industrielle Abwärme, mehr dezentrale Lösungen, um unsere Klimaziele zu erreichen.“ (Kerstan, 34-36) Wageningen University - 66 - MSc. Thesis Environmental Policy Group

Another key driver for the citizens’ initiative’s success constitutes the roots in the anti-nuclear movement. The prospect of a nonnuclear future played a key role in the coming into being of the remunicipalisation process. Uncertainty about the dangers of nuclear power not only led to the massive sign of protest with the 120km long human chain between the nuclear power plants Brunsbüttel and Krümmel through Hamburg in 2010. It also served as a fertile ground for civil society organisation that led to the formation and manifestation of Our Hamburg – Our Grid. With the nuclear accident in Fukushima in March 2011, the remunicipalisation movement experienced another boost during the second stage of the referendum process:

[…] the catastrophe in Fukushima happened and after that we had the petition for a referendum, at that point the whole population was maximally upset about the dangers of nuclear power and the urgency to push forward renewable energies. […] to take actions against [nuclear power] was for many a possibility to make a difference in the field of energy policy, […] where it is not easy to see what will happen in the next twenty to thirty years. And I believe this is also for many a feeling of “Ok, if the grids are in public hands, then there will be something in the entire structure where I will have more access to and where, if necessary, someone is in charge […] who […] will say: ‘Here the grids are not being used to their full capacity for the energy transition’ […]. (Hansen, 237-250)20

In combination with the feeling of not being in control and distrust (*control & *trust) the energy companies being in charge of the energy sector, the concerns about the dangers of nuclear power contributed to a deep uncertainty about the future (*future/change). The public reputation of Vattenfall and E.ON already suffered major damage from the political struggle on ending nuclear power, making them an epitome of neoliberal business practices. For many citizens especially Vattenfall is wearing “a mask […], which smiles, while […] behind it is hard business […] (Seifert, 287-288).21 In this context, the remunicipalisation became a starting point for a transformation to develop a liveable future following the principle of intergenerational justice:

20 „[…] die Katastrophe Fukushima und danach hatte wir das Volksbegehren, da war ja die, da war die ganze Bevölkerung radikal aufgebracht über die Gefahren der Atomkraft, über die Dringlichkeit erneuerbaren Energien nach vorne zu bringen. […] dagegen vorzugehen […] war für viele eine Möglichkeit was zu bewegen in diesem Feld der Energiepolitik, […] wo auch nicht gleich zu durchschauen ist was passiert eigentlich in den nächsten zwanzig, dreißig Jahren. Und ich glaube für viele ist das auch so ein Gefühl: „Ok, wenn die Netze in öffentlicher Hand sind, dann ist da irgendwas in diesem ganzen Gefüge, wo ich mehr Zugriff drauf hab und wo, wenn es sein muss, dann wird da jemand sein […] der sagen wird: ‘Hier, da werden die Netze nicht optimal eingesetzt für die Energiewende‘ […].“ (Hansen, 237-250) 21 „[…] dieses Unternehmen hat eine Maske […], die lächelt, […] dahinter ist hartes Business […].“ (Seifer, 287-288) Wageningen University - 67 - MSc. Thesis Environmental Policy Group

For my part, I have already been involved in activities on climate protection and against nuclear power, as well as for the massive expansion of renewable energies, because I simply believe, it is my sincere wish that we human beings treat our planet in such a way that even after us – well, for instance my son can still live here in a good way. (Hansen, 61-64)22

Nevertheless, despite the broad support in the public for the ambitions of the citizens’ initiative, winning the referendum was not certain. The success of Our Hamburg – Our Grid in turn mobilised the No-campaign, consisting of industry, commerce and businesses that saw themselves at a crossroad. Ultimately, the referendum in the remunicipalisation would directly affect the existence of a private sector in the energy context, explaining why the No-campaign formed up to such a massive extent. It is this ideological ambiguity that functions as a source of uncertainty, polarising the city. On the one hand, the citizens’ initiative had a realistic chance of dissolving neoliberal structures in the energy sector, which has been sought to be prevented through massive counteractions that created politics uncertainty (*politics). On the other hand, the energy companies Vattenfall and E.ON were defending their interests in maintaining grid operation as a business, seeking to preserve their power as owner of the energy distribution grids and the status quo of a neoliberal reality:

No, I believe that the other side was significantly characterised by the industry and people, who deal with the economy and economic business. They knew very well that the city could run that [the distribution grids]. […] that was like ‘resist the beginnings’ politics. They said: “Oh dear, when the people are now beginning to demand that the energy distribution grids […] are transferred to the public hand, what will be next? […] that was, from the – short break – ‘remunicipalisation-wave’ also in all other areas and not only in the, the energy distribution grids. […] these are money printing machines, grids are money printing machines. […] They [Vattenfall and E.ON] wanted to keep them of course. (Hansen 551-562)23

The intensity of the political struggle between opponents and proponents of the remunicipalisation during the run-up to the referendum made its outcome unpredictable. The

22 „Also ich persönlich hab mich davor auch schon lange für Klimaschutz eingesetzt, gegen Atomkraft und dafür das Erneuerbare eben massiv ausgebaut werden, weil ich einfach finde dass, also es ist mir eine Herzensangelegenheit, dass wir Menschen den Planeten so behandeln, dass es auch nach uns und – also mein Sohn jetzt zum Beispiel hier noch gut leben kann.“ Hansen (61-64) „ 23 Nein, also ich glaube die Gegenseite war ja ganz stark geprägt von [der] Industrie und Leuten, die sich viel mit Wirtschaft und Wirtschaftsbetrieb auseinandersetzen, denen war völlig klar, dass die Stadt das betreiben kann. Die hatten wir – das war so ‘Wehret den Anfängen‘-Politik. Die haben gesagt: „Oh Gott, wenn jetzt das Volk anfängt zu fordern, dass die Energienetze […] in die öffentliche Hand kommen, was ist dann das nächste? […] das war die Angst vor der – kurze Pause – ‘Rekommunalisierungswelle‘ auch eben in anderen Bereichen als, als die, die Energienetze. […] das ist eine Gelddruckmaschine, Netze sind Gelddruckmaschinen. […] Das wollen sie natürlich behalten.“ Hansen (551-562) Wageningen University - 68 - MSc. Thesis Environmental Policy Group

No-campaign was supported by the powerful alliance of political parties, organisations of industry and commerce and the unions, creating a considerable source of uncertainty for the citizens’ initiative Our Hamburg – Our Grid. To win the referendum against this concentration of political power, influence and resources, certainly was a great challenge. In terms of resources, the citizens’ initiative estimated a “factor of 1:100” (Braasch, 141)24 in terms of available resources during the referendum process. This becomes particularly apparent with regard to the used campaign materials and “the summer 2013 was entirely dominated by an incredible advertising campaign […] against the referendum […]” (Ederhof, 55-56).25

While the massive No-campaigning contributed to a close election result, the politics uncertainty emerging from the unequal distribution of power and resources was boon and bane at the same time. On the one hand, the massive campaigning of the No-campaign weakened the broad approval of 64% in favour of a 100% remunicipalisation in February (Hamburger Abendblatt 2013) until September 2013. In particular the support of the unions and the city government contributed to the No-campaign gaining votes in the run-up to the referendum. The fears of the employees at Vattenfall and E.ON unfolded a moral power that was also noted on the side of the remunicipalisation proponents. Instead of a full repurchase of the energy distribution grids “[…] the employees and their unions would have actually preferred to continue this and not to move onto unknown territory” (Rabenstein, 308-310).26 This constituted a major ontic uncertainty (*ontic) and the citizens’ initiative Our Hamburg – Our Grid could not argue against the fact that the change of ownership during the remunicipalisation would put employment at risk, since “[…] you do not know how this affects the employees […] you just don’t know” (Hansen, 562-564).27 In addition, the media presence and the support by the city government for the No-campaign had a crucial impact on the voters:

That was a big challenge, they had a lot of money, they had a considerable media power, they had the First Mayor and a word of the First Mayor goes through all media

24 „Faktor 1:100“ (Braasch, 141) 25 „[…] der Sommer 2013 war völlig dominiert von einer unglaublichen Werbekampagne […] gegen den Volksentscheid […].“ (Ederhof, 55-56) 26 „[…] die Beschäftigten und ihre Gewerkschaften hätten eigentlich das gerne weitergeführt und sich nicht […] auf einen Um-, auf einen unbekanntes Terrain begeben.“ (Rabenstein, 308-310) 27 „[…] weiß man nicht, wie wirkt sich das auf die Mitarbeiter aus. […] Das weiß man nicht.“ (Hansen,562-564) Wageningen University - 69 - MSc. Thesis Environmental Policy Group

and is in the newspapers and when we announce something, then this is not immediately in the newspaper the next day. (Hansen, 133-143)28

On the other hand, the No-campaign’s massive presence in the media caused suspicions among the voters. Vattenfall was drowning the city in campaign material, such as the 16 and eight pages supplement published in local tabloids and newspapers in August 2013 (see 4.4.1). This led to a shift in the public perception, since “[…] this Vattenfall advertisement everywhere was then too much for the people” (Hansen, 275-276).29 Especially since Vattenfall kept arguing that the energy distribution grids are worthless cables and pipes, the people realised that “if they invests so much money into advertisement to keep the grid […] they must make a lot of money with it […]” (Hansen, 276-278).30

Eventually, the 50.9% voting in favour of the remunicipalisation depicts this general indecisiveness in the city and both campaigns kept fighting for the voting majority until the very last day of Phase I. The situation of the citizens’ initiative was somewhat reminiscent to the story of David and Goliath. Representatives of Our Hamburg – Our Grid could not be sure that the city government would accept a positive referendum decision and would start to implement it. Despite the legal certainty provided through a polity framework stipulating a referendum decision equal to the constitutional level, the citizens’ initiative was concerned that the government would find some way around the remunicipalisation decision (*politics & *trust):

[…] a giant uncertainty, actually the biggest was: how does the city deal with the [referendum] decision? If we win, the city can delay and work sloppy […] to not implement the referendum decision. They would probably pretend to do so […] but with a quality that it is clear that this cannot work. (Hansen, 336-341)31

28 „Das war eine starke Herausforderung, die hatten sehr viel Geld, die hatten eine große Medienmacht, die hatten den Bürgermeister und ein Bürgermeister-Wort läuft über alle Medien und steht in der Zeitung und wenn wir was verlautbaren, dann steht das nicht am nächsten Tag sofort in der Zeitung.“ (Hansen, 133-143)

29 „[…] diese Vattenfall-Werbung überall und so, das war den Leuten dann doch wieder zu viel.“ (Hansen, 275-276) 30 „[…] wenn jemand so, so viel Geld in Werbung steckt, dafür dass sie das Netz behalten, […] müssen die da richtig Kohle mit machen […].“ (Hansen, 276-278) 31 „Und dann, eine riesen Unsicherheit war ja eigentlich die größte: Wie geht die Stadt mit dem Entscheid um? Wenn wir gewinnen, dann kann die Stadt durch Verzögerungen und unsauberes Arbeiten und und – kurze Pause – ja einfach das sie nicht die Möglichkeiten nutzt, die sie hat – ja faktisch den Volksentscheid nicht umsetzen. Zwar so tun als ob und darstellen: „Ja, wir machen ja.“, aber im, mit einer Qualität, die, wo das klar ist, dass das nicht klappen kann.“ (Hansen, 336-341) Wageningen University - 70 - MSc. Thesis Environmental Policy Group

5.2.2 Uncertainty in Phase II Phase II is mostly about the decisions on how the referendum decision can be implemented (Fig. 17). In this regard, uncertainty about the choice of the right policy pathway (*policy pathway), as well as the concrete policy implementation (*policy implementation) emerges constituting considerable challenges. The uncertainty attached to these codes also overlaps with epistemic (*epistemic), financial (*financial) and ambiguity (*ambiguity) uncertainty. Aside from this policy uncertainty, the control (*control) occurs 21 times depicting a notion of certainty, compared to Phase I, where the code has been mainly attached to statements that underlie a deep notion of uncertainty.

Figure 17: Code relations in Phase II: number of coded statements on uncertainty within Phase II extracted from the interview material. Winning the referendum certainly restored a general feeling of “[…] strong empowerment by the citizens” (Hansen, 453).32 At the same time, the remunicipalisation is just the starting point and necessary basis of a fundamental and long-term transformation in the energy sector that still needs to be implemented:

32 „[…] starke Selbstermächtigung statt auf Seiten der Bürgerinnen und Bürger.“ (Hansen, 453) Wageningen University - 71 - MSc. Thesis Environmental Policy Group

We want to have access to the energy transition, we want to do something here in Hamburg, and we want to make our contribution and not to delegate it to somewhere else, but to make it on our own […]. (Hansen, 73-75)33

The feeling of having restored local power in terms of regained control over the energy sector indicates the shift from uncertainty towards certainty between Phase I and Phase II. It also revived the hopes to achieve the climate targets for 2030, after the city government had admitted that it was “[…] behind schedule [to achieve] the necessary targets for 2020” (Kerstan, 116-117).34 The replacement of the coal power plant in Wedel determines an important lever in terms of climate mitigation by reducing Hamburg’s CO2 emissions.

We would make a great leap forward regarding CO2 emissions and with that we could even come into an area, where the Senate could again achieve its promised [climate] targets […]. (Seifert, 504-506)35

Even from the politicians’ perspectives of Monika Schaal and Jens Kerstan the remunicipalisation has increased the steering capabilities in the energy sector, since “[…] it is important to have influence on the [energy grid] infrastructure to implement the ambitious energy policy goals and climate policy goals” (Kerstan, 111-112)36. Direct access (*control) to the energy grid infrastructure enables the State Parliament to “[…] say, what they think how the [electricity grid operation] should be carried out” (Schaal, 444-445)37.

Nevertheless, the choice of the right policy pathway (*policy pathway) to implement the referendum decision constituted a major source of uncertainty, especially with regard to the district heating sector. Since district heating is an unregulated natural monopoly that is not subject to the principle of unbundling (see 4.1), the remunicipalisation not only includes the repurchase of grid infrastructure, but also the energy generation facilities. A large part of Vattenfall’s heat supply has been gained from the cogeneration of heat and electricity in coal- fired power plants. With the referendum decision, the city government faced the task to replace these fossil fuel-fired power and heat generation facilities with renewable alternatives,

33 “Wir wollen Zugriff haben auf die Energiewende, wir wollen hier in Hamburg was tun, wir wollen unsern Beitrag leisten, den nicht irgendwo anders hin delegieren, sondern den selber leisten […].“ ( Hansen, 73-75) 34 “[…] in Verzug gekommen, [damit] die eigentlich notwendigen Ziele bis 2020 [erreicht werden].” (Kerstan, 116-117). 35 “Wir würden einen mächtigen Sprung in den CO2-Emissionen machen und damit möglicherweise in den Bereich kommen, dass der Senat seine versprochenen Ziele [...] wieder [erreichen kann].” (Seifert, 504-506) 36 „[…] es [ist] wichtig auf die Infrastruktur Einfluss zu haben, um doch ehrgeizige energiepolitische Ziele und klimapolitische Ziele umsetzen zu können.“ (Kerstan, 111-112) 37 „Gleichwohl kann die Bürgerschaft über die Mehrheitsfraktionen schon sagen wir, was man so sich vorstellt, wie die Arbeit [Management der Energienetze] laufen sollte.“ (Schaal, 444-445) Wageningen University - 72 - MSc. Thesis Environmental Policy Group

aside from negotiating a repurchase of the district heating distribution grid (see 4.3.2). The conversion of the district heating sector towards a supply from renewable energy sources constitutes a fundamental transformation that is particularly affected by epistemic and financial uncertainty about choosing the right policy pathway (*epistemic, *financial & *policy pathway). Especially with regard to the replacement of the old coal power plant in Wedel, the city government developed two scenarios (see 4.3.2), which both required preparation in terms of planning, expert assessments and feasibility analysis.

[…] We have also sketched out two pathways in the contracts. The first pathway has been missed basically […] for reasonable grounds it was not possible nor useful to make the decision over the succession plan of the coal power plant in Wedel until the end of last year [2015]. It was not clear how things will continue with the subsidies for the cogeneration of heat and electricity […] no one knows how this continues […]. These have been uncertainties and that is why another pathway has been chosen, which of course is more inconvenient, because the city is then obliged to repurchase the power plant in Wedel within the Alternative Scenario [Scenario 2, see above 3.4.2]. Since we are not that far yet, we have agreed with Vattenfall that they are […] carrying out respective upgrades […] so that the plant keeps on running until there is an alternative available and this alternative is currently being developed. The Authority [for Environment and Energy] has commissioned a number of expert opinions, which are still in progress […] but must be assessed from the Authority first. Mister Kerstan [the Senator for Environment and Energy] has also recently said that we want and can forego [the power plan in] Wedel. (Schaal, 379-397)38

In the first scenario, the so-called “GuD-scenario” (Bürgerschaft Hamburg 2014a: pp. 10-11) the city government sought to avoid the financial uncertainty attached to building the gas and steam power plant as a replacement for the old coal-fired plant in Wedel. The risks and uncertainties inherent to large-scale projects are “[…] quite certainly the reason why they said: ‘We want that Vattenfall should build the substitute power plant and not the City of Hamburg’” (Ederhof, 401-403).39 In 2013, this uncertainty assessment led the city

38 „[…] Wir haben nun ja auch zwei Wege vorgezeichnet in den, in den Verträgen. Der erste Pfad ist im Grunde genommen verpasst worden aus nachvollziehbaren Gründen nicht möglich und sinnvoll war bis Ende letzten Jahres die Entscheidung über eine Nachfolgeregelung in, über das Kohlekraftwerk Wedel zu treffen. Das war nicht klar wie es mit der KWK- Förderung weitergeht […] es weiß kein Mensch wie es weiter geht […]. Das sind alles Unwägbarkeiten gewesen und deswegen wird jetzt ein anderer Weg beschritten, der ist natürlich unbequemer, weil auch die Stadt verpflichtet ist in diesem Alternativszenario das Kraftwerk Wedels zu erwerben. Da wir jetzt noch nicht so weit sind, ist auch vereinbart mit Vattenfall, dass die jetzt sozusagen entsprechend […] nachrüsten […] damit das Kraftwerk weiter laufen kann, so lange bis eine Alternative da ist und an dieser Alternative wird zurzeit gearbeitet. Die Behörde hat da eine Reihe von Gutachten vergeben, die noch in Arbeit sind bzw. vielleicht auch schon vorliegen, aber auch von der Behörde erst mal bewertet werden müssen. Herr Kerstan selber hat ja, vor kurzem gerade, gesagt, dass wir auf Wedel verzichten wollen, können.“ (Schaal, 379-397) 39 „[…] ziemlich sicher der Grund, dass man gesagt hat: ‘Wir wollen gerne, dass das Ersatzkraftwerk in Wedel, Wageningen University - 73 - MSc. Thesis Environmental Policy Group

government to the decision to gain time and postpone the repurchase of the district heating sector by negotiating a call-option for 2019. In this context, uncertainty is directly altering the remunicipalisation process by stretching it towards the future.

Ultimately, scenario 1 was ruled out after financial uncertainty emerged about the question whether subsidies for the cogeneration of heat and electricity would still be available in a profitable amount – a central aspect for the financing of the gas and steam power plant. This change of pathways required a modernisation of the coal power plant in Wedel to extent its running time. This gave the city government time to develop the so-called Alternative Scenario, scenario 2, consisting of renewable alternatives for the district heating capacity so far provided by the plant in Wedel.

However, even after the city government decided for an alternative policy pathway to implement the referendum decision, fundamental epistemic uncertainties persisted. With the city still holding the 25.1% minority interest and Vattenfall the remaining major shares of 74.9%, the Authority for Environment and Energy struggled with the planning of replacing the coal power plant in Wedel. The Authority “had no information about the condition of the district heating distribution grid in Hamburg […]” and “[…] without the provision of information from Vattenfall, it is not really possible to make a valid planning […]” (Jersch, 182-185).40 This uncertainty with regard to planning the implementation of the referendum decision (*policy implementation & *epistemic) proofs the city government’s previous arguments wrong. Before the referendum the city insisted that owning 25.1% in the grid infrastructure would provide sufficient access and codetermination in strategic and operational decisions in the energy sector.

Uncertainty over choosing the right policy pathway to remunicipalise the district heating grid and its heat generation facilities is closely related to uncertainty about policy implementation (*policy pathway & *policy implementation). Even after making a pathway decision, its implementation can become a major source for uncertainty. For instance, although the electricity sector has already been remunicipalised the second part of the referendum text, stipulating a socially just, climate-friendly and democratically controlled energy supply,

soll noch Vattenfall als Bauherr baut und nicht die Stadt Hamburg.’“ (Ederhof, 401-403) 40 „[…] die Behörde hat keine Informationen darüber gehabt, wie überhaupt das Fernwärmenetz in Hamburg aussieht […]. Ohne dass diese Informationen von Vattenfall geliefert werden, ist es nicht wirklich möglich eine valide Planung zu machen […].“ (Jersch, 182-185) Wageningen University - 74 - MSc. Thesis Environmental Policy Group

remains as a major challenge. Implementing these long-term goals set by the referendum decision is particularly susceptible for uncertainties, since the electricity infrastructure is being transformed during ongoing operation (*policy implementation):

[…] we ultimately have major problems in the actual implementation of the investments […],not only electricity and gas build in the city, everyone builds something in the city and the city must then still function somehow. […] at the same time, an electricity grid must for sure function any time of the day, 24 hours, 7 days. […] we are working here on running engines. We change the piston while the engine is running. (Heieis, 603-609)41

At the same time, the transformation of the energy sector as stipulated by the goals of the referendum decision constitutes a major source for financial uncertainty that also affects the policy implementation. Even if necessary investments are available, “[…] you cannot simply invest 100 million without being certain that the heat and the electricity can be sold” (Ederhof, 482-483).42

Above all, in terms of the question how the repurchase of the district heating grid infrastructure can be financed in 2018 and 2019, polity regulations jeopardise the implementation of the referendum decision. Political opponents of the remunicipalisation keep trying to undermine the referendum decision by referring to the budgetary regulation, which the city of Hamburg is obliged to comply. According to item 1 in paragraph 65 (1) of the budgetary regulation, the city government is required to only consider a municipal participation in a private company “[…] if it is of important state interest and provided that the intended purpose cannot be achieved in a better and more efficient way […]” (LHO 2013).43 Together with the call-option the city government has negotiated a minimum purchase price of 950 million Euros to buy back the district heating grid infrastructure and the heat generating facilities in 2014. The opponents argue that if the value of the district heating sector drops under the minimum purchase price in 2019, the budgetary regulation would not

41 „[…] wir haben letztlich in der faktischen Umsetzung der Investitionen große Probleme […], es baut ja nicht nur Strom oder Gas in der Stadt, es baut ja jeder in der Stadt und die Stadt muss dann auch irgendwie noch funktionieren. […] gleichzeitig muss noch ein Stromnetz natürlich jederzeit am Tag, 24 Stunden, sieben Tage, muss natürlich funktionieren. […] wir arbeiten hier am laufenden Motor. Also wir machen einen Kolbenwechsel und der Motor läuft.“ (Heieis, 603-609) 42 „[…] Sie können ja nicht 100 Millionen investieren ohne sicher zu sein, ob Sie die Wärme und den Strom auch loswerden.“ (Ederhof, 482-483) 43 „[…] wenn ein wichtiges staatliches Interesse vorliegt und sich der angestrebte Zweck nicht besser und wirtschaftlicher auf andere Weise erreichen lässt […].“ (LHO, §65, Abs. 1, Ziffer 1).

Wageningen University - 75 - MSc. Thesis Environmental Policy Group

allow a repurchase, as it prevents the city government to waste financial means. With the state budgetary regulation kicking in, the consequences for the implementation of the referendum decision in terms of district heating are deeply uncertain (*policy implementation). Ambiguity persists over the question whether the state budgetary regulations would overrule Article 50(4a) of the Hamburg constitution, stipulating the binding effect of a referendum decision by granting it constitutional level (*ambiguity).

We have always said that the Constitution of Hamburg is of a higher ranking order than the state budgetary regulation, but of course you can see it differently. (Siegler, 666-668)44

In this regard a major weakness constitutes the referendum text itself as it stipulates that the Hamburg Senate and State Parliament must undertake “[…] all necessary and legitimate steps […]” (Our Hamburg – Our Grid 2010) to implement the remunicipalisation. The terms provide room for interpretation and it remains an open question, whether the budgetary regulation will outweigh the referendum decision. Until then, former Our Hamburg – Our Grid members “[…] have also uncertainties, whether in the end, the Senate will eventually continue to stick to its clear message: ‘The people have decided’” (Seifert, 361-363).45

44 „Wir haben immer gesagt die Hamburgische Verfassung ist da höherrangig als die Landeshaushaltsordnung, aber das kann man natürlich unterschiedlich sehen.“ (Siegler, 666-668) 45 „[…] da haben wir auch Unsicherheiten, ob am Ende tatsächlich der Senat weiter zu dieser klaren Ansage „Das Volk hat entschieden“, am Ende stehen wird.“ (Seifert, 361-363) Wageningen University - 76 - MSc. Thesis Environmental Policy Group

5.2.3 Uncertainty in Phase III

Figure 18: Code relations in Phase III: number of coded statements on uncertainty within Phase III extracted from the interview material. Phase III of the process comprises the long-term goals of the referendum text, stipulating the mandatory target of a “socially just, climate-friendly and democratically controlled energy supply from renewable energies” (Our Hamburg – Our Grid). In this phase, codes on uncertainty about the right policy pathway (*policy pathway) and the policy implementation (*policy implementation) overlap with financial unknowns and a general uncertainty about the future (*financial, *future/change) (Fig. 17). The aspect of control remains a main characterisation for the remunicipalisation process. Similar to Phase II, the notion attached to control (*control) in Phase III remains to be closer associated with certainty than uncertainty. In particular with regard to the implementation of the energy transition, the general feeling of regained steering capability persists. The proponents of the remunicipalisation perceive the repurchase of the energy distribution grids as necessary “[…] investment in the people concerning energy supply as well as climate protection, for the future, the next generations” (Siegler, 622-623).46

Under public ownership profits of the electricity grid management will be directly re-invested in the grid infrastructure to ensure technical adjustments and decentralisation, which are

46 „[…] als Investition in die Menschen: was Energieversorgung angeht und auch, wenn man jetzt das Stichwort Klimaschutz nimmt, für die Zukunft, für die nächsten Generationen.“ (Siegler, 622-623) Wageningen University - 77 - MSc. Thesis Environmental Policy Group

necessary for the energy transition. While the city receives a great opportunity in terms of steering capability and control to implement the energy transition, the same investments would not have necessarily been carried out under the private ownership of Vattenfall, as Alexander Heieis, a former Vattenfall employee indicates:

[…] I believe that with the change of ownership of the electricity grid into public ownership that it will be easier to implement the goals, because I just would say that the access [to the grid] is different compared to if it is an entirely external company, which also pursues different company objectives. And within the municipal area, […] I think the implementation of goals that the energy transition ultimately entails, but also making the grid infrastructure of Hamburg fit for the energy transition and the understanding that this will for sure also cost money […] and I believe that the conditions for this are now of course more beneficial. (Heieis, 1017-1025)47

While the electricity distribution grid is back in public ownership, the uncertainty persists regarding the remunicipalisation of the gas and the district heating sector. Assuming that district heating and gas grids will be repurchased, epistemic uncertainty exists regarding the overall structure of the future energy infrastructure in Hamburg (*epistemic). It remains unclear how the gas and district heating distribution grids will be integrated in the current structure and “how will […] the remunicipalised area look like someday X within this city?” (Morgenroth, 515-516).48 One main reason for this persisting epistemic uncertainty remains the insufficient access to the relevant data that would enable the city government to plan for the future, especially with regard to district heating. Without this information the city government remains in an uncertain position to plan the future conversion of the district heating grid in accordance with the referendum decision. It seems possible that the city has no other option than to wait until the repurchase of the district heating sector in 2019, since Vattenfall considers the information a business secret and “today [the information] lie[s] in a secret data room […] and you cannot after all plan for the future this way” (Ederhof, 465- 468).49 Regardless of the choices available in terms of the right policy pathway, the overall priority for policy-making remains the functioning of the grid. Learning by doing is not an

47 „[…] ich glaube dass durch den Wechsel des Stromnetz in städtische Eigentümerschaft, dass es einfacher sein wird die Ziele umzusetzen, weil eben auch sag ich mal der Zugriff ein anderer ist als wenn das ein komplett fremdes Unternehmen ist, das natürlich auch andere Unternehmensziele verfolgt. Und im städtischen Bereich ist […] denke ich die Umsetzung für Ziele, die die Energiewende letztlich mit sich bringt, aber auch das Hamburger Netz muss ja auch Energiewende-tauglich gemacht werden und das Verständnis, dass das natürlich auch Geld kostet, […] und ich glaube dass die Voraussetzungen dafür jetzt natürlich günstiger sind.“ (Heieis, 1017-1025) 48 „Wie sieht nachher eigentlich irgendwann zu einem Tag X, mal in, innerhalb dieser Stadt der ganze rekommunalisierte Bereich aus?“ (Morgenroth, 515-516) 49 „Heute liegen die in einem geheimen Datenraum. […], aber so kann man doch keine Zukunft planen.“ (Ederhof, 465-468) Wageningen University - 78 - MSc. Thesis Environmental Policy Group

adequate option here, since “[…] you cannot [develop] these highly innovative things by trial and error […] (Schaal, 535-537).50 At the same time, policy-makers seek to ensure financial affordability. In this regard, financial uncertainty could become a decisive criterion for the decision-making over policy pathways for the implementation of the energy transition (*financial). Especially in terms of the fundamental transformation in the district heating sector, the First Mayor, Olaf Scholz, sticks to the principle that “[…] it must be affordable, also including the district heating consumers” (Schaal, 530-531).51

Despite the remunicipalisation decision in the referendum, the implementation of the energy transformation in Hamburg remains uncertain. Epistemic and financial uncertainty, but also path dependencies complicate the process of implementing long-term goals of the referendum decision. This makes the transformation of the energy distribution grids susceptible to many open questions, crystallising in the overarching question of how energy distribution grids of the future should be developed:

[…] how does the future distribution grid look like, if the energy transition ultimately [is implemented]? What has to be done? What must be invested? A grid as it is in Hamburg, is planned and structured from the past. There have been large power stations and these large power stations delivered their electricity into the high- consumption hot spots. Today, we have a development that includes many, small, decentral feed-in points […] how does the distribution grid of the future look like? (Heieis, 529-537)52

The fewer findings on uncertainty in Phase III also reflect this general ambiguity regarding these questions. The vague notions about the future indicate that the involved stakeholders are still in the process of developing concrete ideas about how the energy transition in Hamburg can and should be implemented. In this process, time is specifying uncertainties that initially remained blurred in the general ambiguity of the future and the stakeholders cannot be aware of. This also explains the prevailing uncertainty with regard to climate mitigation and the reaching of the climate targets for 2030, as this is too far in the future:

50 […] man kann nicht irgendwelche hochinnovativen Sachen mal eben hier ausprobieren […] (Schaal, 535-537) 51 [...] es muss bezahlbar sein und zwar auch von den Fernwärmekunden. (Schaal, 530-531) 52 […] wie sieht das künftige Verteilnetz aus, wenn die Energiewende letztlich und wie sieht das aus? Was muss getan werden? Was muss investiert werden? Also ein Netz, wie es in Hamburg ist, ist aus der Vergangenheit heraus geplant und strukturiert. Da gab es Großkraftwerke und die Großkraftwerke lieferten ihren Strom in die Verbrauchsstarken Zentren. Heute haben wir eine Entwicklung mit vielen kleinen, dezentralen Einspeisern […] wie sieht ein Verteilnetz der Zukunft aus? (Heieis, 529-537) Wageningen University - 79 - MSc. Thesis Environmental Policy Group

If I am honest, in our Climate Plan we have not yet integrated all necessary measures, which can ensure that we will safely can reach the [2030] target. (Kerstan, 119-121)53

In this context, uncertainty could become a main driver for increasing the climate mitigation efforts to ensure the reaching of the 2030 climate targets, despite the rather pessimistic expectations of the presence.

5.3 Synthesis of results Uncertainty is the causal mechanism influencing the political process of the remunicipalisation in Hamburg through the transmission of causal forces from X to Y. Unpacking this black box that functions in the intervening process of the desired transformation (X) – as outlined in the referendum text – and the outcome of the remunicipalisation (Y) reveals the various forms in which uncertainty occur (Fig. 19). While each arrow is visualising the transmission of causal forces from X to Y, the intervening process consists of uncertainty as the causal mechanism with different entities nn→ constituted by the three analytical Phases.

Figure 19: Synthesis of uncertainty as causal mechanism

53 Wenn ich ehrlich bin haben wir [...] in unserem Klimaplan noch nicht alle notwendigen Maßnahmen hinterlegt, die auch sicherstellen können, dass wir das Ziel [2030] sicher erreichen können. Kerstan (119-121) Wageningen University - 80 - MSc. Thesis Environmental Policy Group

Within these Phases, uncertainty occurs in various forms and influences the remunicipalisation process in a many ways. In Phase I, the citizens started the process by forming up a movement that was mainly driven by the motivation to regain control over the future in terms of implementing the energy transition, ensuring a nonnuclear future and a proactive climate policy, including significant climate mitigation action. A general feeling of powerlessness triggered a deep notion of uncertainty in face of future challenges, such as climate change or the implementation of the energy transition. From the citizens’ perspective, the private energy companies Vattenfall and E.ON owning the grid have been primarily interested in maximising profits from grid operation rather than reinvesting into the energy distribution grid infrastructure to make it fit for the energy transition. Distrust was another important source for uncertainty in this context. Combined with the feeling of having lost control, the citizens’ initiative received decisive power and support, making uncertainty a driving mode of change during the run up to the referendum. Incidents in the local nuclear power plant Krümmel and the nuclear accident in Fukushima intensified the unease against the private grid companies Vattenfall and E.ON and the political struggle over winning the remunicipalisation referendum. During the run up to the referendum the citizens’ initiative faced an alliance of powerful opponents, which created considerable political uncertainty and made the outcome of the referendum unpredictable. Moreover, the strong participation of the city government in the No-campaign constituted a major uncertainty of whether the government would accept and implement a positive referendum result for the remunicipalisation.

While Phase I was affected to a large extent by uncertainty in the politics dimension, Phase II is mainly characterised by uncertainties about policy pathways and implementation. The referendum decision for the remunicipalisation has restored certainty and created a general feeling of empowerment among the citizens after a three year long political struggle. This also shifted uncertainties from if towards how a remunicipalisation can be implemented. In this light, the referendum decision to remunicipalise the energy distribution grids provides a starting point for the desired transformation outlined in the referendum text, despite prevailing uncertainties. The ongoing implementation process has been and still is particularly affected by epistemic and financial uncertainty that both affect the choice of policy pathways. In this context, the district heating sector reflects the challenge and complexity the transformation in the energy infrastructure entails. At the same time, these uncertainties led towards the consideration of new policy pathways and innovative approaches through the conduction of Wageningen University - 81 - MSc. Thesis Environmental Policy Group

feasibility analysis, making uncertainty again a mode for change. Without the participation of the citizens, new approaches, such as the gas-powered engines that are supposed to become hydrogen-fuelled engines in 2030-2035 would not have been taken into account in the decision-making process.

Phase III refers to the long-term transformation the referendum stipulates in terms of implementing the energy transition, expanding renewable energies and establishing a climate- friendly energy supply. Similar to Phase II, city government and citizens perceive themselves as being in control and in fact able to plan for this desired future transformation. At the same time, the pathway towards it remains to a large extent unclear, despite the predefined goals. In this context, time appears as an important factor to specify uncertainties that initially remained blurred in the general ambiguity and deep uncertainty of the future. In other words, while the future is by definition uncertain, uncertainties seem to materialise with time as they diversify on a selected policy pathway, confronting decision-makers during policy implementation.

Wageningen University - 82 - MSc. Thesis Environmental Policy Group

6 Discussion

In this thesis, the process-tracing method was applied in a single-outcome study, the remunicipalisation of the energy distribution grids in the City of Hamburg. As a process of political practice, the remunicipalisation provided the empiric framework to examine the role of uncertainty in a real world context. With the method of explaining-outcome process- tracing, the functioning of uncertainty as a causal mechanism in the remunicipalisation process could be revealed. The following discussion begins with reflections on the methodological approach of process-tracing. This part focuses on the application of the abductive variant of explaining-outcome process-tracing and the challenge in terms of establishing causal inference by hypothesising the causal mechanism and conducting the empirical tests. The conceptual reflections discuss possible links between the empirical findings on uncertainty and the conceptual framework, despite the case-centric research approach.

6.1 Methodological reflections Process-tracing is challenging to apply and “too often this tool is neither well understood nor rigorously applied” (Collier 2011: p. 823). In this regard, Beach & Pedersen (2013) provide guidance for the research process and clarity in terms of the research purpose, distinguishing between three different types of process-tracing. Nevertheless, the meticulous research pathway process-tracing sets out with regard to hypothesising the causal mechanism or the empirical tests as a mean to filter out the most plausible explanation against alternative, rival hypotheses, does not make process-tracing a panacea for establishing causal inferences.

For instance, hypothesising uncertainty as the causal mechanism constituted the most crucial point in the research process, as it predetermines the direction of the empiric analysis of the gathered interview data. Although a thorough knowledge of the case can capture the empirical narrative and case-specific facts, the problem of spuriousness cannot be eliminated (Bennett 2010). This makes the research process inherently uncertain about the accuracy and comprehensiveness of the hypothesised causal mechanism. During the analysis and the empirical testing of the hypothesis against the interview data, it remained a constant question whether uncertainty as the hypothesised causal mechanism in the remunicipalisation process in fact mirrors the underlying narrative of the case. The previous step of building a hypothesis about the case-specific causal inference could misguide the analysis of the causal inference, despite the identified findings on uncertainty. As this step narrows down the possible Wageningen University - 83 - MSc. Thesis Environmental Policy Group

spectrum of results, alternative explanations for the causal inference of X producing Y must remain a possibility throughout the research process, requiring awareness and continuous reflection.

For instance, alternative explanations to uncertainty for the coming into being of the remunicipalisation included the case-specific narratives of ‘not being in control’, ‘lacking steering capability’, ‘insufficient energy security’, ‘distrust’, ‘fearing climate change’ or ‘fearing the dangers of nuclear power’. To all of these possible alternative explanations uncertainty underlies as a general sentiment, combining these narratives under one common denominator. As a result of the iterative research approach, explaining-outcome process- tracing could establish uncertainty as the minimally sufficient explanation for the coming into being of the remunicipalisation decision. The positive ‘smoking gun’ and ‘hoop’ tests provided the necessary evidence for confirming the hypothesis on uncertainty as the causal mechanism in the remunicipalisation process. Combinations of both eventually confirm the hypothesis, eliminating all rival explanations. During the testing of the hypothesised causal mechanism of uncertainty, openness and transparency about the merging and discarding of codes makes the research procedure comprehensible. All iterations of the coding procedure are separately visible in different MAXQDA-files, providing additional transparency, since the researcher’s line of thinking has been captured throughout all four empirical iterations.

Despite the potential limitations constituted in the methodological stage of hypothesising the causal mechanism, the bottom-up and iterative analysis of this hypothesis ensured to maintain a broader spectrum of results. While this manifests in the overall number of 16 codes and 4 sub-codes identified from the qualitative interview data, a top-down established coding scheme from the academic literature would have narrowed down the possible codes to those that characterise the academic notion of uncertainty. Consequently, a theory-informed bottom-up coding procedure seemed as the best option to enable sufficient openness to identifying uncertainty in the primary data material and preventing a theoretical bias.

Nevertheless, establishing causal inference still remains a hard nut to crack in qualitative research. Keeping in mind that the ambition of explaining-outcome process-tracing is to establish a minimally sufficient explanation that appears as most plausible for the coming into being of a certain outcome, the method can be a powerful mean to discriminate among rival explanations. At the same time, the generally positivistic nature of process-tracing remains the very reason why it is crucial to critically reflect on the results. Wageningen University - 84 - MSc. Thesis Environmental Policy Group

The fact that most of the interviewees are proponents of the remunicipalisation and related to Our Hamburg – Our Grid could potentially create a bias in the research results. The reason for the opponents’ underrepresentation lies in the low response rate on interview requests to potential representatives of the No-campaign. This determines a central limitation of the research results, as the causal mechanism of uncertainty could be primarily established from the perspective of remunicipalisation proponents, including citizens, civil society organisations and politicians.

6.2 Conceptual reflections The identified results confirm the hypothesis of uncertainty as the causal mechanism in the remunicipalisation context and various uncertainties have been identified that directly affected the remunicipalisation process. A minimally sufficient explanation for the emergence of the energy distribution grid remunicipalisation could be established throughout all three analytical phases of the process. This subdivision of the process in three main phases as analytical units allowed a structured research procedure and cross-phase comparison of uncertainty during the synthesis of results.

Despite these findings on uncertainty, a challenge remains regarding the mirroring of results to the conceptual level. Compared to the theory-building and theory-testing process-tracing variant, explaining-outcome process-tracing as a single-outcome study remains case-centric and does not foresee theoretical implications. The case-specific findings are consequently not generalizable nor can they be transferred or compared to other cases. Nevertheless, with the following uncertainty check-list (Fig. 18) a case-specific conceptual reflection is carried out. The uncertainty check-list depicts all conceptual dimensions determining the academic notion of uncertainty and ticks off those uncertainties that could be identified in the single-outcome study on the remunicipalisation. Ticking off those links between empirical uncertainties of a real world process and the theoretical conceptualisation of uncertainty in the academic literature, enables a case-specific discussion of the findings on uncertainty in this research. Wageningen University - 85 - MSc. Thesis Environmental Policy Group

Figure 20: Uncertainty check-list guiding the conceptual reflection

The case-specific findings on uncertainty the remunicipalisation process can be assigned to the conceptual dimensions of nature, level and risk, as well as the approach of ‘embracing uncertainty’. In terms of quantifiable uncertainty, the interviewees did not refer to model uncertainty and merely mentioned risk. It seems likely that the interviewees were unaware of the conceptual relation or difference between risk and uncertainty. To avoid over interpretation of the interviewees statements on uncertainty and risk, the findings on the latter are not further discussed.

Instead findings on numerous qualitative uncertainties support the argued limitation of quantifiable uncertainty. The notion of uncertainty as a confounding variable that particularly requires attention in modelling or scenario approaches, for instance within future climate change projections, inevitably needs qualitative uncertainty as the necessary complement to depict the whole uncertainty spectrum. This becomes particularly apparent with regard to the nature of uncertainty, consisting of epistemic, ontic and ambiguity uncertainty. These conceptual dimensions of qualitative uncertainties have been numerously found in the remunicipalisation process. Epistemic uncertainty challenged decision-making regarding the selection of potential policy pathways to remunicipalise and transform the district heating sector in accordance with the referendum decision. Ontic uncertainty occurred in terms of sudden and in general unforeseeable future developments, such as the failing of a government coalition and early elections. Ambiguity about the question of how the energy sector and its infrastructure should be organised, intensified the political struggle by polarising Hamburg into a Yes- and a No-campaign during the run up to the referendum. While the Yes-campaign Wageningen University - 86 - MSc. Thesis Environmental Policy Group

attacked neoliberal beliefs at their core by attempting to end privatisation in the energy infrastructure, the No-campaign feared a remunicipalisation wave that – once started – would continue remunicipalising what has been their former business.

Furthermore, level uncertainty could be detected in the real world example of the remunicipalisation in Hamburg. The fact that interviewees also mentioned different attributes to describe the level of uncertainty in the remunicipalisation process, demonstrates awareness that uncertainty differs in its degree. Simultaneously, comparing the findings on Phase II to Phase III shows that uncertainty materialises over time and stakeholders cannot specify or are not aware of uncertainties that are too far in the future.

Another category that has been established on the basis of the academic literature is the approach of ‘embracing uncertainty’ (2.4). While it seems difficult to provide concrete manifestations of this approach, the overall narrative of the remunicipalisation process in terms of ‘not being in control’ or ‘lacking steering capability’ may provide the connection. The citizens’ initiative’s attempt to remunicipalise the energy distribution grids against a far superior opposition in terms of power, resources and political influence can be seen as a rather bold plan after all. Instead of regarding the considerable uncertainties during the run-up to the referendum as a barrier, the citizens accepted uncertainty as a challenge and relentlessly pursued their goals as specified in the referendum text. Ultimately, the attitude of carrying on regardless of considerable uncertainty and remaining constantly prepared to adapt in response to unforeseeable developments corresponds to the idea of ‘embracing uncertainty’. In this line of thought, uncertainty becomes the mode for change that is characterised by flexibility, resilience and the wish for self-governance.

The citizens entered new and unknown territory and inevitably had to proactively cope with upcoming uncertainties. This flexible and adaptable approach appears as a catalyst that enables to start with taking actions to tackle a complex problem. On the contrary, the remunicipalisation process revealed that policy-makers seem to prefer rather linear planning approaches. To proceed with an incremental learning by doing approach has been emphatically rejected with regard to planning the transformation of the district heating grid infrastructure. In this context, political decision-making seems far more focused on maintaining certainty in terms of predictability. Policy-makers involved in the remunicipalisation case seem to associate a flexible and adaptable approach as some kind of uncontrollable muddling-through that diametrically opposes the responsibility political office Wageningen University - 87 - MSc. Thesis Environmental Policy Group

entails in terms of ensuring the stable functioning of public services. In context of the started transformation of the energy distribution grid remunicipalisation, decision-making becomes a double-edged sword. It requires a balance between political responsibilities, guaranteeing social stability, while simultaneously remaining in charge of making the transformative decisions of implementing the remunicipalisation in accordance with the referendum text.

The conceptual basis the academic notion of uncertainty provides, contributed to a better understanding of the remunicipalisation process, as the findings on uncertainty in the remunicipalisation process could be assigned to the existing conceptualisations of uncertainty from the academic literature. With the practical application of the academic notion of uncertainty within the single-outcome study of the energy grid remunicipalisation in Hamburg, this thesis examined uncertainty beyond the conceptual level. Nevertheless, the link between the remunicipalisation process in Hamburg and the conceptual dimensions of the academic literature remains case-specific. In order to determine the conceptual accuracy of the academic notion on uncertainty in terms of generalizable theoretical implications, a case by case analysis and comparison of results would be required. In this regard, the theory- building variant of process-tracing might contribute to determine the conceptual accuracy of the exiting uncertainty dimensions, simultaneously allowing the possibility of detecting new uncertainty categories.

Wageningen University - 88 - MSc. Thesis Environmental Policy Group

7 Conclusion

In this thesis, the question of what role uncertainty plays in the remunicipalisation process of the energy distribution grids in Hamburg has been addressed. By applying process-tracing as a methodological framework, the presence of various uncertainties could be revealed. The combination of the iterative, qualitative research design of explaining-outcome process- tracing enabled a better understanding of the causal role uncertainty can play in a process of political practice, such as the remunicipalisation in Hamburg. In fact, during the empirical analysis it was possible to establish a minimally sufficient explanation for how uncertainty affected the outcome of the process.

As a preparatory step for the empirical testing, uncertainty had to be hypothesised as a causal mechanism in the remunicipalisation process of Hamburg. This was achieved by establishing uncertainty as the underlying common denominator to the identified case-specific narratives. The identified results confirm the hypothesis of uncertainty as the causal mechanism in the remunicipalisation context and various uncertainties have been identified that directly affected the remunicipalisation process. A minimally sufficient explanation for the emergence of the energy distribution grid remunicipalisation could be established throughout all three analytical phases of the process. This subdivision of the process in three main phases as analytical units also allowed a structured research procedure and cross-phase comparison of case-specific uncertainties during the synthesis of results.

The empirical analysis of the remunicipalisation of the energy distribution grids in Hamburg was based on the conceptualisation of uncertainty in the academic literature. By conducting a literature review, uncertainty could be distinguished into quantifiable and qualitative uncertainties. Quantifiable uncertainty further divides into risk and model uncertainty, while unquantifiable or qualitative uncertainty determines three conceptual dimensions, namely location, level and nature of uncertainty. Building on this conceptual basis and examining how uncertainty affects climate science and climate policy decision-making, ‘embracing uncertainty’ was established as a flexible and resilient approach to cope with uncertainties in transformative processes.

By establishing this theoretical anchor point, the reflection of the empirical findings provided insights on the notion of uncertainty within a process of political practice. In fact, the transformative character of the remunicipalisation process, as a fundamental reorganisation of Wageningen University - 89 - MSc. Thesis Environmental Policy Group

the energy grid infrastructure, offered an ideal scope for examining the role of uncertainty, affecting political decision-making when stepping onto unknown territory. This may include epistemic, ontic, ambiguity or level uncertainty, as well as uncertainty regarding the choice of policy pathways and policy implementation. Particularly in view of the latter, decision- making seems to get trapped in the ingenuity gap, preventing policy solutions towards the desired transformation of a “socially just, climate-friendly and democratically controlled energy supply from renewable energies” (Our Hamburg – Our Grid 2010). While uncertainty appears in this context as a decisive factor that alters the remunicipalisation process, the role of uncertainty also explains the coming into being of the remunicipalisation as a political decision. In this regard, the citizens’ desire for being in control of a future transformation towards climate protection and renewable energies constituted the catalyst that left the city government no other option than to embrace these uncertainties and start implementing the referendum decision – a source of uncertainty which the political decision-makers probably would have preferred to avoid.

The feeling of not being in control about the necessary measures to tackle climate change effectively, for instance by implementing the energy transition, unfolded an enormous transformative power, broadly mobilising citizens in their attempt to regain steering capability in climate and energy policy. From this point of view, citizens of Hamburg have overcome the cognitive dissonance that paralyses decision-making of international climate policy and started to take the necessary and perhaps even bold actions to tackle climate change effectively. In this context, the remunicipalisation constitutes a renaissance towards the regional perspective. The international climate agreement achieve in Paris 2015 certainly remains a corner stone of international climate policy, providing the common ground and necessary framework as guidance and point of reference. However, the transformation towards a climate friendly and renewable future probably consists of many small transformations on the local level and particularly in the energy sector.

‘Embracing uncertainty’ may in this context provide the principle that enables the coming into being of these transformative actions. For instance, the still pending remunicipalisation process of the district heating grid in Hamburg revealed the necessary flexibility and adaptability in terms of possible changes to a selected policy pathway during policy implementation. Wageningen University - 90 - MSc. Thesis Environmental Policy Group

7.1 Recommendations ‘Embracing uncertainty’ not only provides an effective coping strategy within these deeply uncertain situations. In these situations, decisions need to be taken to prevent uncertainty from paralysing decision-making. In this line of thought, uncertainty should not merely be regarded as a confounding variable that needs to be reduced. In fact, states of uncertainty should constitute a mode for change, encouraging the taking of actions, instead of being perceived as an enemy to decision-making or climate science.

Beyond revealing uncertainty as the causal mechanism in the remunicipalisation process in Hamburg, the empirical narrative of regaining control and steering capability in the energy distribution grid also puts privatisation, as a core concept of the neoliberal paradigm into question. In times, in which decisive and fundamental transformations are needed, neoliberalism and capitalistic market principles cannot provide adequate responses in terms climate protection or the ending of extensive resource exhaustion, nor could these principles become a pioneering role within the transformation in the energy sector towards renewable sources. Instead, it has been the citizens that appear to make a faster progress in this regard by a do-it-yourself philosophy on the local level. The citizens not only set a starting point for their desired transformation of a climate friendly and renewable future, but also accepted responsibility by proactively getting involved into the implementation of the energy transition in Hamburg. Profit maximisation and the privatisation of public goods and services is not the way to go and stands diametrically opposed to the global agreement on tackling climate change established at the COP 21 in Paris in 2015. With this in mind, the tendency towards the remunicipalisation of energy distribution grids for a rapid transformation in the energy sector towards renewable sources, should become a core measure and starting point to effective and proactive climate mitigation action.

Wageningen University - 91 - MSc. Thesis Environmental Policy Group

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Wageningen University - 101 - MSc. Thesis Environmental Policy Group

Annex – semi-structured interview guideline

Interview Leitfaden

Name: Organisation: Datum:

Einleitung:

- Zunächst nochmal vielen Dank, dass Sie sich zu einem Interview bereit erklärt haben - Wie bereits im Vorfeld erwähnt werden diese Interviews primär dazu durchgeführt den Prozess der Rekommunalisierung der Energienetze in Hamburg zu dokumentieren. Außerdem werde ich die Inhalte der Interviews in meiner Masterarbeit verwenden, in welcher ich Aspekte von Politikprozessen der Klima- und Energiepolitik untersuche. Erklären Sie sich dazu bereit, dass die Ton- und Bildaufzeichnungen für diese Zwecke genutzt werden können?

Teil 1 – Einstieg:

Absicht: Kurzportrait des Akteurs

1. Bitte erzählen Sie kurz von Ihrer Arbeit. Was sind Ihre Aufgaben in der Stadt Hamburg bzw. welche (politische) Funktion erfüllen Sie?

Teil 2 – Überleitung finden zum Thema der Rekommunalisierung

Absicht: Rolle des Akteurs im Kontext der Rekommunalisierung/Energie- & Klimapolitik feststellen

1. Wie haben Sie den Prozess zum Rückkauf der Netze wahrgenommen? (Positionierung)

2. In welcher Weise waren Sie in diesem Prozess aktiv? (Engagement)

Wageningen University - 102 - MSc. Thesis Environmental Policy Group

Teil 3 – Persönliche und funktionsspezifische Motive

Absicht: Abfragen des individual narratives über die Rekommunalisierung, sowie energie- & klimapolitische Positionen

1. Was hat Sie bewogen sich persönlich bzw. im Namen von XY (Organisation) für/gegen die Rekommunalisierung auszusprechen?

2. a) Für Befürworter: Was waren möglicherweise die größten Herausforderungen auf dem Weg zum Volksentscheid und dem Erreichen der vollständigen Rekommunalisierung? b) Für Gegner: Welche Herausforderungen musste die „Nein“-Kampagne bewältigen?

3. Was waren denn große Unsicherheiten a) im Prozess der Nein-Kampagne, b) auf dem Weg zur Volksabstimmung und anschließender Rekommunalisierung der Netze für Sie oder Ihre Organisation? Option: Gab es beispielsweise rechtliche oder politische Unsicherheiten, oder unsichere inhaltliche Fragen hinsichtlich der letztendlichen Umsetzung einer 100%gen Rekommunalisierung der Netze?

4. Inwiefern hat sich diese Unsicherheit bestätigt / bewahrheitet?

Teil 4 – Übergeordnete Bedeutung der Rekommunalisierung für die Stadt Hamburg

Absicht: persönliche/funktionsspezifische Sicht auf die kommunalen Netze heute bzw. subjektiver Stellenwert der Eigentümerschaft für die Zukunft der Stadt Hamburg

1. Inwiefern wirkt sich die Rekommunalisierung nun auf die Stadt Hamburg aus? // Welche Bedeutung und Auswirkungen hat die Rekommunalisierung der Netze Ihrer Ansicht nach nun für die Stadt Hamburg?

2. Wie stehen Sie bzw. Ihre Organisation heute zur Rekommunalisierung der Netze?

Wageningen University - 103 - MSc. Thesis Environmental Policy Group

Teil 5 –Bezüge zu Klima-Energie Nexus

Absicht: Abschluss-Statements im Hinblick auf die Hamburger Energie- und Klimapolitik

1. Welche Bedeutung hat die Rekommunalisierung Ihrer Ansicht nach für die Energiewende?

2. Welche Bedeutung hat die Rekommunalisierung Ihrer Ansicht nach für die Klimapolitik Hamburgs?

Abschluss.

Habe Sie noch Fragen oder möchten Sie noch etwas hinzufügen?

Dann bedanke ich mich für das Interview. Interview beenden.

Klären, ob anonymisiert oder nicht  Datenschutzerklärung.

Tonband aus.

Kann ich bei eventuellen Rückfragen nochmal auf Sie zukommen?