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Restricting the import of ‘emission credits’ in the EU: a power struggle between states and institutions

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Abstract

This article examines the development of a cap on the use of so-called ‘project credits’ in the EU emissions trading scheme. It investigates how the issue of such a limit was addressed in the negotiations of the Linking Directive, and how it has been dealt with in the later implementation of this directive. The article applies two explanatory approaches: one based on intergovernmentalist theory, assuming that the cap reflected the preferences of the EU Member States; and one based on the multi-level governance model, assuming that the cap expressed the preferences of EU institutions rather than Member States. What is found is a two-stage development: during the negotiations of the Linking Directive, Member States managed to secure a no-cap solution allowing extensive use of the project credits. In the later implementation phase, however, when the emissions trading scheme was up and running and a certain legitimacy for the system had been established, the Commission managed to ‘regain control’ by bringing back a cap. Thus, the project credit cap—and by that, the very nature of the EU emissions trading scheme—has been the subject of a continuing power struggle within the EU—and different theoretical perspectives explain different stages of this process.

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Notes

  1. Among these issues were the question of when to link, the conversion of credits, the avoidance of double counting of credits, the potential linking to other trading schemes, the inclusion of so-called national projects, and the inclusion of various qualitative provisions (so-called sinks, nuclear projects and large hydro power) (see European Commission 2003; Directive 2004/101/EC 2004; Lefevere 2006). Due to the scope of this article, we cannot take all these issues into account. Instead, we will focus on the cap—one of the most debated issues of the Linking Directive process.

  2. Such a perspective is included as a separate explanatory approach in the analysis of the Linking Directive in Flåm (2007).

  3. I will, throughout this article, use the short terms ‘Commission’ and ‘Parliament’ when respectively referring to the European Commission and the European Parliament. I will also use the short term ‘Council’, referring to the Council of ministers.

  4. The intricate details of the correspondence of these numbers can be found in the Commission’s proposal, which claims that the 6% limit represents about a quarter of the total emission reductions the EU has to achieve under the Kyoto Protocol, whereas the final limit at 8% corresponds to one third of the EU’s target under the Protocol (European Commission 2003, p. 8).

Abbreviations

CDM:

Clean development mechanism

CEEC:

Central and East European Country

DG:

Directorate general

ET:

Emissions trading

ETS:

Emissions trading scheme

EU:

European union

JI:

Joint implementation

MEP:

Member of the European parliament

NAP:

National allocation plan

NGO:

Non-governmental organization

UNFCCC:

The united nations framework convention on climate change

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Acknowledgements

The author would like to thank Gunnar Fermann at the Norwegian University of Science and Technology (NTNU) and Jørgen Wettestad at the Fridtjof Nansen Institute (FNI). They have both given thorough guidance on the article. Many thanks also to Jon Birger Skjærseth and other colleagues at FNI. Finally, thanks to all the respondents who took the time and effort to share their insights on the Linking Directive process.

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  1. The Fridtjof Nansen Institute, Box 326, 1326, Lysaker, Norway

    Karoline Hægstad Flåm

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  1. Karoline Hægstad Flåm
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Correspondence to Karoline Hægstad Flåm.

Appendix: the interviewees

Appendix: the interviewees

Alexander De Roo: Dutch Parliamentarian, MEP and rapporteur on the Linking Directive at the time in question.

Christian Egenhofer: Senior fellow at the Centre for European Policy Studies (CEPS).

Trygve Hallingstad: Norwegian environment council to the EU during the Linking Directive process.

Sanjeev Kumar: Lobbyist and Emissions Trading Scheme Coordinator for the WWF European Policy Office.

Jürgen Lefevere: Commissioner in the DG Environment during the Linking Directive process.

Stig Schjølseth: Analyst at Point Carbon, Oslo.

Michael Wriglesworth: Consultant/lobbyist for the International Emissions Trading Association (IETA) during the Linking Directive process. Now senior advisor at the Centre for European Policy Studies (CEPS).

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Flåm, K.H. Restricting the import of ‘emission credits’ in the EU: a power struggle between states and institutions. Int Environ Agreements 9, 23–38 (2009). https://doi.org/10.1007/s10784-008-9081-7

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