This article examines the roles of international policy diffusion and domestic politics in shaping the design of an emissions trading system (ETS) in Kazakhstan. We find that although the overall framework for the Kazakh ETS and many of its design elements are based on the EU ETS, domestic political factors were central mediating variables in the diffusion process. The system was initiated at the highest levels within the government, but the fast-tracked nature of the implementation process did not provide sufficient notification to the donor community to mobilize much-needed technical support until the pilot phase had been completed. Implementation of a fully operational system was postponed until 2018 due to industry mobilization against the system and unresolved legal and technical issues. The findings indicate that the longer-term outcome of a diffusion process can be policy divergence, not convergence, as domestic interest groups influence policy and as governments learn from their own implementation experiences.

The EU’s emissions trading system (ETS) covers almost half of its greenhouse gas emissions and has been hailed as the cornerstone and flagship of EU climate policy. In spring 2013, however, the ETS was in severe crisis, with a huge surplus of allowances and a sagging carbon price. Even a formally simple measure to change the timing of auctioning was initially rejected by the European Parliament. Two years later, a much more important, quantity-focused “market thermostat” (the market stability reserve) was adopted, and proposals for a complete ETS overhaul were put on the table. This article examines how it was possible to turn the flagship around so quickly, providing insights into the mechanisms for gradually rendering emissions trading systems more effective. Crucial changes at the EU and national levels are identified, chief among them changes in Germany and in the European Parliament. Furthermore, the quantity-based tightening mechanism discussed could be of relevance for carbon markets outside Europe.

Is rescuing the EU's emissions trading system impossible? Despite the substantial reform in 2008, subsequent problems of allowance surplus and a low carbon price have spurred new efforts to reform the system for the 2013–2020 phase. But these efforts have met resistance both among member states and in the European parliament, and the EU is struggling in its efforts to improve the ETS. This article draws on four central EU and political science theory approaches to more systematically explore why. The financial crisis and slow international policy progress have narrowed the window of opportunity that was open in 2008. Factors that could open that window again include an economic upswing, a new European commission and parliament, and new global negotiations in 2015. But even without short-term reform, the linear reduction factor will gradually tighten the system and lead to a higher carbon price.

This article examines the recent changes of three central EU climate and energy policies: the revised Emissions Trading Directive (ETS); the Renewables Directive (RES); and internal energy market (IEM) policy. An increasing transference of competence to EU level institutions, and hence “vertical integration,” has taken place, most clearly in the case of the ETS. The main reasons for the differing increase in vertical integration are, first, that more member states were dissatisfied with the pre-existing system in the case of the ETS than in the two other cases. Second, the European Commission and Parliament were comparatively more united in pushing for changes in the case of the ETS. And, third, although RES and IEM policies were influenced by regional energy security concerns, they were less structurally linked to and influenced by the global climate regime than the ETS.

This article explains why the significant changes in the EU Emissions Trading System (EU ETS) for the 2013–2020 phase were adopted in 2008. The combination of a more stringent EU-wide cap, allocation of emission allowances for payment, and limits on imports of credits from third countries have strengthened the system for the post-2012 period. This will promote reduction in greenhouse gases compared to the old system. The main reasons for these changes are, first, changes in the positions of the member states due to unsatisfactory experience with performance of the EU ETS so far. Second, a “package approach” where the EU ETS reform was integrated into wider energy and climate policy facilitated agreement on the changes. Third, changes in the position of nonstate actors and a desire to affect the international climate negotiations contributed to the reform.

The EU Emissions Trading System (EU ETS) is the cornerstone of EU climate policy, a grand policy experiment, as the first and largest international emissions trading system in the world. In this article, we seek to provide a broad overview of the initiation, decision-making and implementation of the EU ETS so far. We explore why the EU changed from a laggard to a leader in emissions trading, how it managed to establish the system rapidly, and the consequences to date, leading up to the 2008 proposal for a revised ET Directive for the post-2012 period. We apply three explanatory approaches, focusing on the roles of the EU member states, the EU institutions and the international climate regime, and conclude that all three approaches are needed to understand what happened, how and why. This also reveals that what happened in the early days of developing the system had significant consequences for the problems experienced in practice and the prospects ahead.

The article compares the interplay between soft law institutions and those based on hard law in international efforts to protect the North Sea, reduce transboundary air pollution, and discipline fisheries subsidies. Our cases confirm that ambitious norms are more easily achieved in soft law institutions than in legally binding ones, but not primarily because they bypass domestic ratification or fail to raise concerns for compliance costs. More important is the greater flexibility offered by soft law instruments with respect to participation and sectoral emphasis. Second, ambitious soft law regimes put political pressure on laggards in negotiations over binding rules, but this effect is contingent on factors such as political saliency and reasonably consensual risk and option assessment. Third, hard-law instruments are subject to more thorough negotiation and preparation which, unless substantive targets have been watered down, makes behavioral change and problem solving more likely. Finally, although most of the evidence presented here confirms the implementation edge conventionally ascribed to hard law institutions, the structures for intrusive verification and review that provide part of the explanation can also be created within soft law institutions.

The EU emissions trading scheme has been characterized as one of the most farreaching and radical environmental policies for many years, and “the new grand policy experiment.” Given the EU's earlier resistance to this market-based instrument with no international track record and with US origins, the EU decision-making process, which took less than two years, can be characterized as a puzzlingly ultra-quick political “pregnancy.” In order to understand this, it is necessary to take three explanatory perspectives—and the interaction between them—into account. First, the emissions trading issue was more mature within the EU system than immediately apparent, given that emissions projections were worrying and no effective common climate policies had been adopted. Second, the Commission acted as a strong and clever policy entrepreneur, dealing with other basically positive EU bodies. Third, when the US pulled out of the Kyoto process in March 2001, it provided a window of opportunity for the EU to take the reins of global policy leadership.