ﬂexiblemechanisms were to be supplemental to domestic action, which should constitute asigniﬁcant element of the reduction effort. Rules were also agreed on compliance,‘sinks’ and funding.160 From an environmental integrity perspective, the agreementreached at the inclusion of sinks has been deemed a major setback (Yamin 2005b,8).161 The rulebook was agreed at CoP-7 in Marrakech in October 2001.The agreement in Bonn and Marrakech strengthened the Commission’sdetermination to adopt the proposal for an ET directive by the end of 2001. As theEU ETS was depicted as the key measure for implementing the Kyoto Protocol,ensuring the survival of the Protocol itself became crucial to the rapid proposal andadoption of the ET Directive. The rules for international emissions trading agreed inBonn and Marrakech did not, however, signiﬁcantly affect the design of the EU ETS,as the proposed ET directive was directed towards companies, nor governments,and the main structure of the proposal was ready before these conferences. TheCommission worked to ensure compatibility between the international emissionstrading system and the EU trading system. In practice, the Commission has hadan important say in the development of EU positions in the international climatenegotiations even though the Council formally adopts its position prior to or duringthe CoPs (Slingenberg 2006, 23). The EU is represented in negotiations by a troika:the country currently holding the Presidency, the country next in line, and the
158 Council (7 June 2001), 9116/01, 2355th Council Meeting Environment. Presse 201,2001. Brussels, 11.159 ENDS Daily (16 July 2001), ‘Global Climate Talks Reopen in Bonn’, Issue 1031.160 Earth Negotiations Bulletin (176, 2001), Summary of the Resumed Sixth Session ofthe Conference of the Parties to the UN Framework Convention on Climate Change: 16-27July, 2001’, 12:176; ENDS Daily (23 July 2001), ‘Kyoto Protocol Rulebook in Summary,Issue 1036.161 The availability of sinks is important for the degree to which each country has toreduce GHG emissions.
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Commission. Since the CoPs take place every year, the Commission is the stablefactor in the EU’s participation in international negotiations (ibid.).Jos Delbeke and the BEST team served as the chief negotiator for the EuropeanCommission at the UNFCCC Conference of the Parties. The climate change unit inDG Environment participated in all Conferences of the Parties to the UN FrameworkConvention on Climate Change and guarded the EU emission trading plans. TheCommission would have opposed any proposals for amendments in the internationalsystem that did not ﬁt with the plans for the EU system.162 In conclusion, then,we may say that the US rejection caused the EU to make signiﬁcant sacriﬁces toreach agreement in Bonn and Marrakech. The agreement that was reached servedto strengthen the EU’s determination to adopt the proposed ET directive in 2001.However, these international events did not signiﬁcantly affect the design of theproposed ET directive.Other External US InﬂuenceAs noted earlier, a broad range of EU internal stakeholders actually lobbied theEuropean Parliament to accept the common position in the Council of Ministers.Concurrently, external lobby groups representing the traditional interests of the fossilfuel lobby did what they could to sink the Kyoto Protocol and the EU ETS.Whereas Washington honoured its commitment not to interfere with thenegotiation in Bonn, private US interests lobbied intensively against ratiﬁcation ofthe Kyoto Protocol and the emerging EU ETS. Shortly after the ET directive wasproposed, the American Council for Capital Formation (ACCF) published studiespredicting adverse consequences for the European economy and employmentthat would accrue if Kyoto Protocol targets were to be met by emissions trading.Founded in 1973, the ACCF is a US based think-tank and lobby organization withan afﬁliate in Brussels, the International Council for Capital Formation (ICCF) ledby Managing Director Margo Thorning. The climate policy of ACCF/ICCF appearsas a blueprint of the climate policy of the Bush administration: ‘The ACCF makesthe case that, given the need to maintain strong U.S. economic growth and energysecurity, policy-makers should develop a ﬂexible long term approach … based ontechnological innovation … and bilateral cooperation with developing countries’.163In its climate policy studies, ACCF stresses the high costs and ineffectiveness ofemissions trading and mandatory carbon-emission reduction targets.The ACCF is funded by corporations, associations and foundations and allocatesabout 25 per cent of its expenditures to inﬂuencing legislation.164 Representatives ofmajor US industry federations like the American Petroleum Institute (API) sit on theBoard of Directors. The lobby campaign in Brussels was undertaken primarily onbehalf of US-based multinational companies with signiﬁcant operations in Europe162 Interviews in Brussels, 15 May 2006.163 American Council for Capital Formation, ‘ACCF Climate Change Studies andReports’ [website] <http://www.accf.org/climate/cc-papers.html>, accessed 15 June 2007.164 American Council for Capital Formation, ‘About ACCF, ACCF Mission’ [website]<http://www.accf.org/about/index.html>, accessed 15 June 2007.
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that would be affected by the EU ETS.165 API and particularly ExxonMobil – thebiggest private oil company in the world – lobbied intensively against any mandatoryclimate policy, the Kyoto Protocol in particular (Skjærseth and Skodvin 2003). Fromthe 2000 Green Paper on emissions trading, reﬁning was included as one of thesectors to be included in the EU ETS. ExxonMobil is the second-largest crude oilreﬁner in Europe, with interests in 11 major reﬁneries.166ACCF reports on the adverse consequences of the climate policy of the EUwere taken seriously at the top level in the Commission. The ACCF argued thatthe allowance prices needed to reach the Kyoto target would lead to 3.8–5.2 percent lower GDP in 2010 in Germany, Spain, the UK and the Netherlands. In turn,Environment Commissioner Wallström defended the ET proposal by referring tothe Commission’s own work showing that the costs could be as low as 0.06 per centof expected GDP in 2010, adding that the ACCF studies were ‘far off conventionalwisdom’.167 According to the Commission, the IPCC had forecast a range of 0.1to 2 per cent of GDP.168 The ACCF organized meetings with European industrialfederations, the European Parliament, EU member-states and the Commission toinﬂuence the fate of the Kyoto Protocol and the EU ETS. The lobby campaign wasmainly perceived as ‘aggressive’, ‘crude’ and ‘counterproductive’.169 The premisesfor the arguments produced by the ACCF were successfully attacked by theCommission and not picked up by major European industry federations like UNICE.The effect of ACCF’s lobby campaign against the Kyoto Protocol and the proposedET directive was thus limited. Still, it added to the numerous stumbling blocks thathad to be overcome by the EU.Ratiﬁcation of the Kyoto ProtocolThere was a real risk that the Kyoto Protocol could collapse from the time of theﬁrst ET directive proposal to the adoption of the ﬁnal ET Directive. In March 2002,the Environment Council reached an agreement to ratify the Kyoto Protocol.170This agreement was formalized as a Council Decision in April and, together withratiﬁcation from member-states, aimed at enabling the Kyoto Protocol to enter into165 ENDS Daily (13 September 2002), ‘Transatlantic Climate Cost Dispute RumblesOn’, Issue 1286.166 Six reﬁneries are fully owned and operated and three more are operated byExxonMobil as majority shareholder. ExxonMobil, ‘Our Business in Europe’ [website]<http://www.exxonmobil.com/Europe-English/About/Eu_AC_Business.asp>, accessed 15June 2007.167 ENDS Daily (12 July 2002), ‘EU Climate Change Cost Estimates Disputed’, Issue1256.168 The ACCF was criticized by the Commission for looking only at carbon dioxide andnot the other Kyoto gases, and for using a model normally employed for assessing only shortterm economic consequences. ENDS Daily (13 September 2002), ‘Transatlantic Climate CostDispute Rumbles On’, Issue 1286.169 Interviews in Brussels, 15–16 May 2006.170 Council (4 March 2002), 6592/02, 2413th Council Meeting Environment. Presse 47,2002. Brussels.
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force before the Johannesburg World Summit in September 2002 – which, however,it did not. The Decision also included the 1998 Burden-sharing Agreement betweenthe member-states aimed at joint reduction of 8 per cent of GHG emissions171 –to apply irrespective of whether or not the Kyoto Protocol entered into force. Inlegal terms, this means that the member-states’ obligations in the Burden-sharingAgreement were not conditional upon the entry into force of the Kyoto Protocol.Nevertheless, continuing uncertainty about ratiﬁcation of the Kyoto Protocol after2001 affected the EU ETS decision-making process. It meant that the Commissionwas initially extremely careful not to link the EU ETS inextricably to the KyotoProtocol. In the Commission’s original Articles on the ET directive proposal, therewas only one reference to the Kyoto Protocol – in Article 19 on registries (Vis 2006b,200). Throughout the negotiations, the Commission was careful to avoid making theEU ETS conditional on the entry into force of the Protocol (ibid.). Nevertheless,Annex III to the ET Directive stipulated that National Allocation Plans should ‘be ona path towards meeting Kyoto targets’ in the ﬁrst period (2005–07) and ‘consistentwith the Kyoto targets’ in the second period (2008–12). Moreover, the link betweenthe EU ETS and the Kyoto Protocol’s ﬂexible mechanisms (CDM and JI) would notmake much sense unless these mechanisms were part of the Protocol (see below).For the Protocol to enter into force it would, as noted, have to be ratiﬁed by 55contracting Parties accounting for 55 per cent of total carbon dioxide emissions as of1990. Since most other states took steps to ratify the Protocol in 2002 – nearly 100countries, including Japan and Canada – the US exit from the Kyoto Protocol leftRussia in a key role for determining the fate of the Kyoto Protocol. In April 2002,statements by Russian Prime Minister Kasyanov were interpreted by the EU as apromise of ratiﬁcation (Moe, forthcoming 2007). This interpretation was based onthe opinion that Russia stood to gain from the Kyoto Protocol, even without the USAas a major buyer. Russia could sell its ‘hot air’ (unused assigned amounts) to partiesfacing problems with meeting their targets. Russian ‘hot air’ was, as previouslynoted, caused by the economic slowdown and restructuring which led to rapidlyfalling CO2 emissions until the late 1990s. The EU conviction that Russia wouldratify was important for keeping the ﬁnal stage of the EU ETS decision-makingprocess on track as the central element for complying with the Kyoto Protocol.Things did not go as smoothly as expected, however, and doubts about Russianratiﬁcation increased in 2003. In September, Vladimir Putin was expected to decideon ratiﬁcation, but he failed to give a clear signal, saying only that the governmentwould take a decision in conformity with Russian national interests after studyingthe economic and social impact of Kyoto.172 In December, the Protocol was againproclaimed ‘dead’, following statements by an economic advisor to Putin.173European Commission President Romano Prodi stated ‘We are conﬁdent that Russiawill ratify the Protocol so it can enter into force’, but this perception was not shared171 Ibid.172 ENDS Daily (29 September 2003), ‘Worries over Kyoto Mount as Russia Wavers’,Issue 1519.173 ENDS Daily (3 December 2003), ‘New Russian Scare for Kyoto Protocol’, Issue1566.
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by all member-states.174 Spain’s initial problems with implementing its NationalAllocation Plan have been directly related to uncertainty about Russian ratiﬁcation.According to Vis (2006b, 210), the Aznar government did not appear to take theKyoto commitments seriously enough, ‘perhaps in the belief that Russia wouldnever ratify the Kyoto Protocol’. Russian ratiﬁcation was in fact not as obvious asmany in the EU appeared to think.According to Moe (forthcoming 2007), Russia hesitated for three main reasons.First, there was lack of scientiﬁc consensus on the climate issue within Russia.Second, there was disagreement on economic effects, particularly whether the KyotoProtocol might stiﬂe economic growth in the long term. Third, there was rivalrybetween state agencies for control over implementation of Russian climate policy,as well as competition between potential sellers of emission quotas and betweenrecipients of investments in joint implementation projects. Finally, however, inSeptember 2004 the Russian government proposed ratiﬁcation to the Duma, andthe assembly ratiﬁed the Protocol in October. Russia’s ratiﬁcation can be explainedby issue linkages: EU support for future Russian membership in the World TradeOrganization had become linked to Russian ratiﬁcation of the Kyoto Protocol(Slingenberg 2006, 21; Moe forthcoming 2007).175 The Kyoto Protocol entered intoforce on 16 February 2005, giving more weight to the ET Directive and the NationalAllocation Plans ‘on a path towards meeting Kyoto targets’.The Linking DirectiveNegotiations on the EU Linking Directive were also related to ratiﬁcation of theKyoto Protocol. One day before the launch of the linking proposal, EnvironmentCommissioner Margot Wallström commented that she thought the proposal wouldbe beneﬁcial to ‘other countries, for example Russia’.176 This mention was far from arandom remark, as Russia had the casting vote in determining whether the Protocolwould be implemented. It was now up to the EU to convince Russia to ratify.177The Linking Directive was clearly part of these attempts: As one EU commissionercommented, ‘the EU wants the Kyoto to enter into force, and this [linking] proposalgives an even bigger incentive for countries to ratify it’.178 Like the EU ETS, theLinking Directive also became a tool for getting the Kyoto Protocol ratiﬁed.
174 ENDS Daily (17 December 2003), ‘Prodi Tries to Hold the Line on Kyoto Protocol’,Issue 1576.175 Although the EU has ofﬁcially rejected the link between trade and climate, the twoissues were discussed in parallel at an EU-Russia summit in May 2004 (Moe, forthcoming2007).176 ENDS Daily (24 July 2003), ‘EU Injects Kyoto Flex-mex into Climate Trading’,Issue 1488.177 See for instance: ENDS Daily, ibid.; Point Carbon (23 July 2003), ‘Draft EU ETSAmendment on JI and CDM Published (European Commission)’; Reuters/Planetark (28 May2003), ‘EU to Link Emissions Trading to the Rest of the World’.178 Point Carbon (8 August 2003), ‘Linking Proposal Aims to Provide Companies withMore Options’.
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Does this mean that Russia inﬂuenced the ﬁnal content and the design of theLinking Directive? It could be argued that the Russians got their way in connectionwith the cap issue. At a roundtable discussion on air quality and climate change inRome in March 2004, Russian participants had voiced their concern that the EUwould cap the number of credits allowed into the EU ETS – and they had equallymade it clear that without an expanded market for emission credits, Russia would notratify the Kyoto Protocol.179 As we know, the ﬁnal directive contained no commoncap on JI and CDM credits. However, there are also reasons not to exaggerate theRussian inﬂuence. In the course of the directive process, reference to the entry intoforce of the Kyoto Protocol was speciﬁcally deleted,180 making the directive – atleast formally – independent of Russia and the fate of the Protocol. As EP rapporteurAlexander de Roo commented, ‘this gives the message: We are not waiting for you,President Putin. We are going ahead with or without you’.181Direct inﬂuence or not, the two processes were apparently interrelated. Only amonth after agreement was reached on the Linking Directive (April 2004), Putinpromised he would speed up work ‘towards ratiﬁcation’.182 Similarly, one monthafter the Linking Directive entered into force, Russia ratiﬁed the Protocol.ConclusionTo what extent, how and why did the relevant actors and institutions affect the ﬁnaloutcome of EU ETS? In this chapter, we have examined the inﬂuence of the EUmember-states and institutions, as well as developments within the climate regime,on the EU ETS decision-making process.Our ﬁrst proposition stated that the EU ETS came to reﬂect the positions of themember-states as a result of interstate bargaining. In Chapter 3, we saw that theEU ETS underwent relatively little change from the ET directive proposal in 2001to its ﬁnal adoption in 2003. This suggests that the positions of the member-stateschanged, that their interests had already been taken into account in the proposal fromthe Commission, or that they were simply unable to affect the proposal signiﬁcantlyduring the decision-making process. First, the member-states did express diversiﬁedpositions in response to the 2000 Green Paper. As noted in Chapter 4, initial responsesindicated that nine member-states were positive to a European emissions tradingsystem. This meant 47 votes for emissions trading – far from the 62 needed to createa qualiﬁed majority.
179 International Environment Reporter (10 March 2004), ‘Russia Insists It Will OnlyRatify Kyoto Pact with Expanded Market for Emission Credits’, 27:5, 177.180 Council (31 March 2004), Working Document 7931/04 regarding: Proposal for aDirective of the European Parliament and of the Council Amending the Directive Establishinga Scheme for Greenhouse Gas Emission Allowance Trading within the Community, in Respectof the Kyoto Protocol’s Project Mechanisms (Brussels: Council of the European Union,General Secretariat).181 Point Carbon (20 April 2004), ‘Euro Parliament Adopts Linking Directive’.182 ENDS Daily (24 May 2004), ‘Russia “Will Ratify the Kyoto Protocol”’.
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Against this backdrop, the Commission organized a new consultation meetingwith the member-states in autumn 2001. This meeting revealed a signiﬁcant changein positions, towards broad support for an EU ETS based on a common method forallocation, common sectors and activities, adequate compliance and enforcement.Allocation of allowances should, however, be done by the member-states withinthe constraints of the Burden-sharing Agreement. What caused this change? Acombination of factors including better knowledge and the US exit from the KyotoProtocol were important. Particularly the US exit helped to unify the EU in supportfor emissions trading (see below). This means that there was a development towardsconvergence in the positions of the EU member-states, but they neverthelesspreferred a decentralized system for allocation of allowances that would maximizetheir national autonomy.Second, the Commission’s proposal was roughly in line with these positions,as were the common position and the ﬁnal ET Directive. Decentralization ofallocation of allowances provided the member-states with signiﬁcant discretionand autonomy with regard to allocation within each country. Adding freedom withregard to veriﬁcation, it has been argued that the ET Directive in reality means theestablishment of 25 domestic emissions trading schemes (Lefevere 2006, 118). Keyelements of the proposed ET directive thus reﬂected the diversity of the positionsof the member-states. This helps us to understand why the proposed ET directiveremained relatively unaltered throughout the decision-making process. With theLinking Directive, however, the situation was somewhat different. Here a majorityof the member-states managed to change key elements of the Commission proposalrelated to a cap on linking, as well as the year from when linking was to take place.The linking directive proposal nevertheless adds support to the proposition based onthe intergovernmental approach.Third, the design of the EU ETS did deviate signiﬁcantly from the positions oftwo large and important member-states, Germany and the UK, who both preferred avoluntary scheme from the outset. Such a voluntary scheme would make participationoptional, thus undermining the fundamental logic of the proposed emissions tradingdirective. Despite the signiﬁcant political and economic importance of these two states,they had to yield and support a mandatory EU ETS in the pilot phase. The concessionsgiven to Germany and the UK in the ﬁnal directive were relatively insigniﬁcant andhave proved to be of little importance in practice. The main observation from thisis not that the EU ETS differed from the ‘lowest common denominator’ (which iscommon in the EU), but rather that it differed from the interests and preferences oftwo of the largest and most powerful EU states. In relation to this speciﬁc issuearea, the UK and Germany are the two most important contributors to the emissionstrading scheme, with together, 34 per cent of the total allowances in the ﬁrst tradingperiod. This means that the EU governments do not necessarily have control overcollective decision-making even if they represent the largest EU states, both in termsof votes and related to the issue-area in question here.The main reason why Germany and the UK had to yield was that the directivewas proposed on the basis of Article 175 (1) of the EC Treaty, which provides forqualiﬁed majority voting in Council. There is, however, a norm in the Council ofMinisters whereby consensus-seeking and unanimous support is always preferable.
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This norm was particularly applicable in this case since the EU ETS represented anew policy instrument that affected the core of modern economies: the energy sector.And the directive was actually adopted unanimously by the 15 member-states inthe Council of Ministers in 2003. Even though formal voting did not take place, thepossibility of voting nevertheless put pressure to bear on the UK and Germany tomake concessions.Since a qualiﬁed majority supported the binding nature of the scheme, therewas a real (although not very likely) risk that the UK and Germany could havebeen outvoted. It was real, since a blocking minority would require 26 votes – morethan the UK and Germany combined, also if we count Finland with its three votes.Still, it was not very likely, since the UK and Germany were expected to accountfor a signiﬁcant share of the allowance market, as later proved to be the case. Inaddition to qualiﬁed majority, the skill of the Danish EU Presidency in craftingthe compromise, as well as internal rivalry within Germany, which weakened itsnegotiation position, help to explain the outcome. All in all, the EU ETS decisionmaking process appears to be largely, but not fully, in line with our propositionderived from the intergovernmental approach.The next proposition stated that the EU ETS reﬂects the harmonization ambitionof the EU institutions, rather than the positions of the member-states. This propositiongot only limited support. Both the European Commission (at least initially) and theEuropean Parliament preferred a more centralized system, particularly with regardto the allocation of allowances. The EU ETS ended up as a basically decentralizedsystem in this respect. Finally, the EU ETS deviated signiﬁcantly from the positionof the EP, but to a lesser degree from that of the Commission. However, both theEuropean Commission and the Parliament inﬂuenced the EU ETS by providingindependent input to the decision-making process, thus qualifying as organizationalactors.The inﬂuence of the Commission was evident in that it was able to counterbalancemany changes made to the proposed directive – on the basis of its formal powersaccording to the co-decision procedure, combined with several requirements andthe right of approval in the subsequent implementation phase. For example, theCommission has a right to approve National Allocation Plans, as well as opt-in andopt-out provisions, and reject them if they do not comply with the requirementsset out in the directive. The Commission was also very active behind the scenes inCouncil negotiations. This active role was facilitated by the asymmetrical distributionof knowledge between the Commission and most member-states: the Commissionhad more than a two-year lead in building up expertise on emissions trading. TheEuropean Parliament had the power to veto the proposed ET directive, but itsactual inﬂuence on the directive was only moderate, compared its own ambitions.The Parliament aimed at making signiﬁcant changes to the decentralized nature ofthe scheme, its coverage and method of allocation through two ‘readings’. Mostthe amendments aimed at strengthening the environmental integrity of the system.The ﬁnal result included some modiﬁcations in that direction (see Table 5.4). Forexample, the EP proposed a mandatory cap on the allocation within each memberstate, to ensure that allocations were sufﬁciently ambitious to lead to signiﬁcantreductions in emissions. The Parliament did not manage to get a mandatory cap, but
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ended up with a more ﬂexible requirement: the total amount of allowances was to beconsistent with a path towards the Kyoto targets.We have discussed various reasons for the limited impact of the EP. For onething, on many issues the Parliament found itself confronted with a powerfulalliance between the Commission and a majority of the member-states and industry.Second, the time factor became important. In the ﬁnal negotiations, the Parliamentwas very reluctant to end up as the one who delayed the start-up of the scheme. If thescheme had gone into conciliation between the Council and Parliament, the KyotoProtocol deadline of showing demonstrable progress ‘by 2005’ would probably beout of reach. Third, it seems that the Parliament proposed too many amendments(some 80 in the ﬁrst reading). If the Parliament had focused on a more limited set ofamendments, its impact might have been more signiﬁcant.Non-state actors inﬂuenced the design of the EU ETS only to a very limitedextent – hardly a surprising observation when decision-making is based on qualiﬁedmajority. Qualiﬁed majority voting makes it difﬁcult for industry and ENGOs toaffect collective outcomes, as it requires lobby activities to be coordinated acrossmember-states. Under unanimity rules, German industry would most likely havebeen able to exercise its inﬂuence by blocking the adoption of the directive. Germanindustry did exercise some inﬂuence on the ﬁnal directive in the form of the newArticle on ‘pooling’ in the ET Directive. However, this derogation was of limitedpractical importance, and so German industry had scant inﬂuence on the design ofthe EU ETS through the national channel.At EU level, however, both industry and ENGOs expressed overwhelmingsupport for the EU Emissions Trading Scheme, even though differences in opinionpersisted on speciﬁc design elements. That being said, this case also provides us withexamples of different types of relationships between the EU institutions and non-stateactors. First, the Commission was initially able to withstand pressure from powerfulindustries to include ‘opt-out’ in the proposed directive. A necessary condition forthis was that DG Environment could ally with the DGs for competition and theinternal market. Faced with this constellation, the industry-friendly DG Enterprisehad to give in. Second, neither the European Commission nor the Parliament wasable to withstand the opposition expressed by the chemical industry, represented bythe European industrial federation CEFIC. The chemical industry had been includedin the Green Paper, but it was excluded from the proposal for the ET directive,and managed to stay outside despite the efforts of the Parliament to get it back in.In addition to its international orientation and importance to the EU economy, thechemical industry was probably left out of the ETS because its cooperation wasneeded in the upcoming process on the REACH directive, and because excluding thechemical industry would help to weaken German opposition to emissions trading.Moreover, the chemical industry would have complicated the system becauseit covers many installations. Third, ENGOs did apparently have some inﬂuence,through the Parliament’s efforts to open up for some auctioning.According to our ﬁnal proposition, the EU Emissions Trading Scheme reﬂectsdevelopments within international climate regime and its provision for internationalemissions trading. The main impact of the international climate regime on the EUETS in the decision-making phase was caused by the US withdrawal from the Kyoto
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Protocol. This led to a crisis in the regime that penetrated the internal EU decisionmaking process. The US exit ﬁrst served to unify the positions within and among theEU actors and institutions in climate policy. This meant that it helped to unify theCommission, the positions of the EU member-states, the Parliament and non-stateactors in support for the EU ETS.Convergence in positions among key stakeholders was also stimulated by theheightened likelihood that the Kyoto Protocol would enter into force, followingthe Bonn and Marrakech agreements in the summer and autumn of 2001. The EUETS came into the spotlight as the instrument that would give the EU credibility insaving the Kyoto Protocol. The Linking Directive became increasingly important asuncertainty about Russian ratiﬁcation of the Kyoto Protocol persisted much longerthan expected. These effects were mutually reinforcing – the EU ETS represented themain instrument for implementing and increasingly for saving the Kyoto Protocol.If the US exit from the Kyoto Protocol had led to a collapse in the climate regime(as foreseen by the Bush Administration), perhaps the EU ETS would not have beenadopted – at least not at the same time and in the same form as it did.The Kyoto Protocol continued to affect the speed of the EU ETS decision-makingprocess, through its ‘demonstrable progress by 2005’ time limit and the 2008–12commitment period. These time limits placed pressure on EU actors and institutions,particularly the European Parliament, to avoid conciliation. All in all, the KyotoProtocol and developments within the climate regime emerge as probably the mostimportant factor in explaining why the EU ETS was adopted at all.Even though the EU was convinced that the Kyoto Protocol would enter intoforce, the international climate regime had limited impact on the speciﬁc designof the EU ETS, mainly because the rules for international emissions trading weredeveloped later and they were more general. The EU ETS was signiﬁcantly morecomplex, as it focused on industrial action, not governmental action.Despite their varying explanatory power, all the three explanatory perspectivesoffered here prove to have something to contribute, even related to the same designfeature. For example, the intergovernmental member-state perspective helps us