Implementing EU Emissions Trading: Institutional Misfit?

FNI Report 10/2005. Lysaker, FNI, 2005, 24 p.

This article discusses the first round of implementation of the EU emissions trading scheme (ETS) in the form of the drawing up of National Allocation Plans (NAPs). Three key EU greenhouse gas emitters are focused upon: Germany, Spain and the UK. As these countries have a varying pre-existing climate policy mix and hence a seemingly varying institutional fit with the instrument of emissions trading, can such differences shed light upon differing NAP implementation and performance among these three countries? To some extent, but a main finding is that the real issue is much more one of ‘varying degrees of misfit’ than one of fit versus misfit.  For instance, German industry’s favouring of voluntary agreements, the UK’s differently designed domestic ETS, and the lack of pre-existing Spanish climate policy undoubtedly complicated the processes in these countries and reduced the time and ability to consult with other Member States. This may indicate the need for a slowdown of the tempo in EU ETS policy-making in order to improve institutional fit and transnational communication and learning.