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Understanding the Fascinating Development of the EU ETS

EU emissions trading scheme(13.03.2008) A new FNI book digs deep to find out why the EU changed its position from leading skeptic to leading proponent of greenhouse gas emissions trading, how it managed so rapidly to establish the world's first international emissions trading scheme (ETS), and what its consequences so far are.

"This book is also an important tool to understand the background for the Commission's January 2008 proposal for a revised ETS post-2012, and to reason soundly about the determinants for the decision-making process ahead," says co-author Jørgen Wettestad.

The EU Emissions Trading Scheme has been characterized as one of the most far-reaching and radical environmental policies for many years. Given the EU's earlier resistance to this market-based and US-flavoured programme, the development and implementation of the EU ETS has been rapid. This novel approach to environmental regulation has the potential to affect not only greenhouse gas emissions in the EU, but also international strategies for climate change protection.

In their new book 'EU Emissions Trading: Initiation, Decision-making and Implementation', Senior Research Fellows Jon Birger Skjærseth and Jørgen Wettestad of the Fridtjof Nansen Institute (FNI) make a thorough analysis of the political processes behind the creation and implementation of the EU ETS.

Jon Birger Skjærseth "We first of all found that the EU changed its position due to the Kyoto Protocol and more importantly because of the truly entrepreneurial leadership exercised by the European Commission," says Jon Birger Skjærseth. "The Commission initiated the EU ETS, built independent knowledge and crafted support for the system among stakeholders. Without the Commission's role in this phase, there would probably not have been an EU ETS," he concludes.

The book then goes on to analyse how the system could be introduced so rapidly and explains this most importantly by the member states' success in securing a decentralized system with significant national autonomy in setting reduction targets. The US exit from the Kyoto Protocol also contributed to galvanize European support for the ETS.

The authors, however, find that the compromises that were made in the rapid process have had their costs.

Jørgen Wettestad"The main implementation problem so far has been the far too lenient emission targets for the installations covered by the system, which have led to a collapse in the carbon price," explains Jørgen Wettestad. "This problem can largely be traced back to the decentralized nature of the system providing each member state with incentives to protect their own industries. The Commission is now addressing this, by centralizing the system and pushing the member-states towards more ambitious targets," he ends.


Skjærseth & Wettestad (2008): EU Emissions Trading: Initiation, Decision-making and ImplementationAbout the book

Citation: Skjærseth, Jon Birger and Jørgen Wettestad, EU Emissions Trading: Initiation, Decision-making and Implementation. Aldershot, Ashgate, 2008, 216 p. ISBN 978-0-7546-4871-0

> For more information and orders, contact Ashgate


Peter Vis, European Commission, Belgium:
'EU emissions trading was always – and remains – an ambitious project. Few, if any, of those involved would have expected the scheme to have been put in place by the European Union so quickly. Here is a meticulously researched account of how and why it happened. On the basis of original documentation and first-hand accounts, this important work re-constitutes the various stages of the process, from conception to implementation…will fascinate political scientists and policy-makers, as well as those interested in European integration and environmental protection.'

Sebastian Oberthür, Vrije Universiteit Brussels, Belgium:
'Solidly built on political science concepts, this book convinces with its systematic and comprehensive exploration of the emergence, development and effectiveness of the EU Emissions Trading system – an asset for any bookcase on EU and global environmental governance.'

Christian Egenhofer, Centre for European Policy Studies (CEPS), Brussels and University of Dundee, UK:
'The authors tell the real story of the politics behind the EU ETS. By resolving the mystery as to why it was the EU that implemented the first international CO2 trading scheme, this book fills a crucial research gap for those working on EU and international environmental policy. At the same time, the book is a fine case study of how the EU works in practice, making interesting reading for scholars of European integration.'

Malcolm Hill, Loughborough University, UK:
Download review in Journal of Contemporary European Studies

Matthew Paterson, University of Ottawa, Canada:
Download review in Environmental Politics

Related information:
   Presentation of FNI's research on European energy and environmental politics
   FNI project 'The EU Emissions Trading Scheme: Key Conditions and Prospects for Effectiveness'
   The Commission’s Proposal for a Revised ETS – Looking Backwards and Forwards. Presentation, mainly based on the book, by Jørgen Wettestad at an Environmental Policy Forum on the EU ETS in Brussels 28.02.2008.
 The Fridtjof Nansen Institute (FNI) is an independent foundation engaged in research on international environmental, energy, and resource management politics.
The Institute maintains a multi-disciplinary approach, with main emphasis on political science, economics, and international law.

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