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Designing Effective Emissions Trading: The Contribution of International Diffusion (ETS-DIFFUSION)

ETS-DIFFUSION focuses on emissions trading, a key instrument for reducing greenhouse gas (GHG) emissions that has gained increasing attention and weight in recent years.

In theory, emissions trading provides cost-effective stimuli for reducing emissions by putting a price on GHG emissions. However, its effectiveness is heavily conditioned by design factors, not least the stringency of the emissions cap.

This project investigates the factors influencing the design and international diffusion of emissions trading in some major emitting jurisdictions: the EU, China, California and Australia. These systems develop at different speeds, with some frontrunners and others as recent adopters. This makes it important to clarify inter-system lessons-learning and other types of interaction. Hence, we link up to a rich debate on policy diffusion, and how design processes are adapted to the specific circumstances of countries and regions. Improved knowledge about designs and main shaping factors is also important for assessing the possibilities for greater transnational linkage of systems as a potential ‘bottom–up’ alternative global climate regulatory response.

We will improve knowledge by detailed document analysis, semi-structured interviews with central stakeholders, and by drawing upon the expertise of some of the world’s leading experts on climate politics and carbon markets. ETS-DIFFUSION has clear relevance for the negotiations under the global climate regime on ‘market and non-market mechanisms’.

Norway was among the initiators of the International Carbon Action Partnership (ICAP) and has over time emphasized the development of market mechanisms. ETS-DIFFUSION also has practical implications for Norwegian governmental and industrial actors involved in bilateral and multilateral coordination processes, particularly vis-à-vis emerging systems as in China. Furthermore, Norway is linked to the EU ETS through the European Economic Area agreement.

Project leader: Jørgen Wettestad

Project period: 2014-2017



Wettestad, Jørgen and Torbjørg Jevnaker, Rescuing EU Emissions Trading: The Climate Policy Flagship. Basingstoke (UK), Palgrave, 2016, 119 p.

Peer-reviewed articles and book chapters

Andresen, Steinar, Jon Birger Skjærseth, Torbjørg Jevnaker and Jørgen Wettestad. 'The Paris Agreement: Consequences for the EU and carbon markets?' Politics and Governance, Vol 4, No 3, 2016, pp. 188-196.

Bailey, Ian and Tor Håkon Jackson Inderberg, 'New Zealand and climate change. What are the stakes and what can New Zealand do?'. Policy Quarterly, Vol 12, No 2, 2016, pp. 3-12.

Jevnaker, Torbjørg and Jørgen Wettestad. 'Linked Carbon Markets: Silver Bullet or Castle in the Air?' Climate Law, Vol 5, Nos 1-2, 2016, pp. 109-117.

Wettestad, Jørgen, 'EU Emissions Trading'. In Karin Bäckstrand and Eva Løvbrand (eds), Research Handbook on Climate Governance. Cheltenham, Edward Elgar, 2015, pp. 345-356.

Wettestad, Jørgen, 'The EU Emissions Trading System: Frontrunner in Trouble'. In Geert Van Calster, Wim Vandenberghe, Leonie Reins (eds), Research Handbook on Climate Change Mitigation Law. Cheltenham (UK), Edward Elgar, 2015, pp. 451-476.

Boasson, Elin Lerum Boasson and Wettestad, Jørgen, 'The Interaction of EU Climate Policies: Mechanisms and Lessons'. In Tony Fitzpatrick (ed), International Handbook on Social Policy and the Environment. Cheltenham (UK), Edward Elgar, 2014, pp. 329-349-17.

Wettestad, Jørgen, 'Rescuing EU Emissions Trading: Mission Impossible?' Global Environmental Politics, Vol 14, No 2, 2014, pp. 64-81.


Wettestad, Jørgen and Lars H.Gulbrandsen, The Evolution of Carbon Trading Systems: Waves, Design and Diffusion. FNI Report 9/2015. Lysaker, FNI, 2015, 40 p.

Underdal, Arild, David G.Victor and Jørgen Wettestad, Studying the Global Diffusion oif Emissions Trading: Key Building Blocks in the ETS DIFFUSION Project Research Design, FNI Report 2/2015. Lysaker, FNI, 2015, 15 p.


Stensdal, Iselin, 'Kina: Fra bremsekloss til klimapådriver?' ('China and climate: From laggard to front-runner?'). Norsk Klimastiftelse Rapport, No 4 2016, pp. 9-12. In Norwegian.

Heggelund, Gørild, 'Etablering av verdens største karbonmarked' ('The establishment of the world's largest carbon market'). Norsk Klimastiftelse Rapport, No 4 2016, pp. 53-57. In Norwegian.

Heggelund, Goerild, 'Aspects that are important to consider in the design phase of the national ETS'. Environomist China Carbon Market Research Report 2016. Beijing, Environomist, 2016, pp. 23-27,

Wettestad, Jørgen and Torbjørg Jevnaker, 'Klimakvoter i medvind' ('Greenhouse gas emission quotas gaining popularity'), Klima, 27.05.2015. In Norwegian.

Wettestad, Jørgen and Torbjørg jevnaker, 'Mot kvassere klimakvoter i EU' ('Towards stricter emission quotas in the EU'), Energi og Klima, 13.05.2015. In Norwegian.

Wettestad, Jørgen and Torbjørg Jevnaker, 'Some much needed momentum is finally building behind the EU’s emissions trading system', EUROPP Blog, 24.04.2015.

Wettestad, Jørgen, 'Rask innstramming av EUs kvotesystem?' ('Rapid Tightening of the EU Emissions Trading System?'), Energi & Klima, 04.11.2014. In Norwegian.

Wettestad, Jørgen, 'Mot global karbonprising' ('Towards Global Carbon Pricing'), Klima, 30.10.2014. In Norwegian.
 Related focal points of research:

   Climate change
   Chinese energy and environmental politics
   European energy and environmental politics

Project funding:

   Research Council of Norway (KLIMAFORSK Programme)

 Related documents:

   Project presentation brochure (PDF)

 External cooperation partners:

   Plymouth University
   CICERO - Center for International Climate and Environmental Research - Oslo
   Norwegian University of Life Sciences (NMBU)
   Tsinghua University
   University of California

 Media coverage

'EU-landene strides om minstepris på CO2' ('EU countries fight over CO2 minimum price'),, 22.05.2016. In Norwegian.

'Momentum finally building for EU ETS -researchers', Carbon Pulse, 24.04.205.

'China's carbon plans: secrecy and oversupply darken outlook', Reuters, 18.08.2014.

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