national environmental problemsthere is an international environmental regime interacting with EU environmentalpolicy (Skjærseth and Wettestad 2002). In the area of marine pollution, for example,the international regime covering the North Sea and the wider North-east Atlantichas had signiﬁcant impact on relevant EU policy, and vice-versa (Skjærseth 2006).The third explanatory approach thus looks at factors external to the EU itself (Wealeet al. 2000). Our point of departure is the impact of international institutions orregimes. The classic deﬁnition of international regimes sees them as ‘sets of implicitor explicit principles, norms, rules and decision-making procedures around whichactors’ expectations converge in a given area of international relations’ (Krasner1983, 2). This approach directs the focus to the international institutional level andexplains EU policy-making as the implementation of, or harmonization to, broaderinternational commitments. An underlying assumption here is that internationalinstitutions and commitments actually matter (see Miles et al. 2002). The relevantprinciples, norms and rules in this speciﬁc context are those laid down in the 1992UN Framework Convention on Climate Change and its 1997 Kyoto Protocol.The international regime approach is compatible with both multi-level governanceand intergovernmentalism. Intergovernmentalism does not exclude change inmember-state preferences as a result of external events. During international13 This is further substantiated by the fact that the purpose of this book is to analyse onespeciﬁc policy-making process. As pointed out by Weale et al. (2000, 22), general theoriesof European integration may not be well suited to understanding how policies are made andimplemented in particular cases of problem-solving.14 According to Fairbrass and Jordan (2004, 164), ‘Analysts now need to test multi-levelgovernance in areas of both ‘high’ and ‘low’ politics’.
Analytical Framework
19
negotiations, participants can learn more about each other and cooperative solutions,as long as international agreements are located within the range of nationallyacceptable solutions (Weale et al. 2000, 17). Even though state preferences reﬂect theobjectives of domestic groups which inﬂuence the state apparatus, preferences arenot necessarily stable (Moravscik 1998, 24). Multi-level governance also goes wellwith the concept of international institutional inﬂuence. International institutions canaffect the strategies of non-state actors, member-states and EU institutions throughthe same pathways.As noted, the explanatory power of various approaches may vary between policyphases.15 In the following, we apply the three explanatory approaches as heuristictools for developing empirically testable propositions from the initiation to theimplementation of the EU ETS, based on the positions of the member-states, the roleand strategies of EU institutions and non-state actors, and the international climateregime.The Positions of Member-statesThe EU member-states were sceptical or even hostile to emissions trading during the1997 Kyoto negotiations (see Grubb et al. 1999, 94). The ﬁrst possible explanation forthe development of the EU ETS is thus simply that the member-states changed theirpreferences. This explanation is compatible with both intergovernmentalist and multilevel governance approaches to EU policy-making. Among intergovernmentalists,however, member-state interests and preferences stand as the key variable. Thoseworking within the tradition of multi-level governance see member-state preferencesas one explanatory factor working in a complex relationship with other factors atvarious levels of decision-making.To explore the validity of this explanation, we need to know which stateschanged their preferences, and how such changes became channelled through theEU system. The leader–laggard dynamics between the EU member-states has beenidentiﬁed as one important driving force behind the expansion of EU environmentalpolicy (see Andersen and Liefferink 1997). Its core mechanism is that environmentalfrontrunners, or pushers, and regulatory competition drive EU environmental policyforward (Homeyer 2001).16 With the EU ETS, we may distinguish between memberstates that support, oppose or are indifferent to emissions trading. To understand15 The possibility that the explanatory power of different approaches may vary betweendifferent issue-areas can obviously not be checked in this study.16 The Netherlands, Sweden, Denmark, Finland, Germany and Austria tend to be placedin the leader category, whereas Greece, Spain, Portugal and Ireland are frequently placed inthe laggard group. In-between, we ﬁnd Belgium, Italy, Luxemburg and France, whose supportvaries on a case-by-case basis. The UK represents a special case inasmuch as it left the laggardgroup in the late 1980s and edged towards the leader group (see Wettestad 2002). The greenproﬁles of some of the leaders have faded quite considerably. This is particularly the case inDenmark, which has cut its environmental bureaucracy dramatically and adjusted its onceambitious external environmental positions considerably. Also the Netherlands has reducedenvironmental policy spending considerably in the recent years.
20
EU Emissions Trading
national positions on emissions trading, and drawing upon Underdal (1998), wefocus on the energy-economic situation, governmental supply of environmentalpolicy instruments and societal demand for such policies.How the preferences of the member-states have been channelled through the EUsystem varies with different policy-making phases. In the policy initiation phase, it isthe European Commission that has the formal and exclusive right to initiate and draftlegislation. At least two channels can be utilized by member-states in this phase.First, the EU Presidency chairing the Council of Ministers rotates every six months,passing to a new member-state. The state occupying the presidency is responsible forchairing the meetings and dealing with unresolved problems through negotiations.Even though the agenda is inherited from the former presidency, countries can takenew initiatives or complete earlier ones (Grant et al. 2000). Second, and related tothe ﬁrst point, the Council of Ministers may request legislative proposals from theCommission. Member-states can also inﬂuence the early stages of policy-makingthrough advisory committees, hearings organized by the Commission, and informalconsultations with the Commission.We propose that change in the positions of the member-states led to the initiationof EU ETS. The Commission acted on a request from member-states and anticipatedbroad-based support. According to this proposition, we expect to ﬁnd: (1) a memberstate occupying the presidency took the initiative to the EU ETS; (2) the Council ofMinisters requested the Commission to initiate the EU ETS; (3) there was broadbased support among member-states for an EU ETS and this pushed the Commissionon this issue.17The EU’s main legislative body is the Council of Ministers, composed ofrepresentatives of national governments. In the decision-making phase, the Councilof Ministers is thus the most important institutional arena for member-states.18The Council of Environmental Ministers meets four times a year to negotiateenvironmental legislation, serving as the most important forum for expressingnational preferences. The member-state occupying the presidency is responsiblefor chairing the meetings, and it can play an important role as mediator. If theCommission does not get the necessary backing for a proposal from the Council, theproposal will fail in its intended form. How likely it is that the Commission will getthe necessary backing depends on the decision rules applied. Unanimity gives eachmember-state more control, but increases the probabilities of deadlock.The co-decision procedure, which applies to environmental policy-makingand the emissions trading directive, requires a qualiﬁed majority in the Council ofMinisters. It also gives the Parliament the right to propose amendments or veto theproposal if it perceives that its amendments have not been taken sufﬁciently into17 The ways in which the member states can inﬂuence proposals can work concurrently,and our conﬁdence in this explanatory perspective will increase relative to the number of themthat can be detected.18 The Council is assisted by the Committee of Permanent Representatives (Coreper)and working groups. Coreper does the ground work and prepares the meeting of the Council,but it does not act as a central problem-solver in the ﬁeld of the environment (Grant et al.2000, 29).
Analytical Framework
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account. Qualiﬁed majority is a weighted voting system based on the principle thatlarger states should have more votes than smaller ones. In the period between the tworecent EU enlargements (1995–2004), the UK, France, Germany and Italy had tenvotes each; Spain had eight votes; Portugal, the Netherlands, Greece and Belgiumhad ﬁve; Sweden and Austria had four votes; Denmark, Finland and Ireland hadthree votes; and Luxemburg had two votes.The distribution of votes in the Council of Ministers is important for understandinghow alliances are established concerning environmental legislation. First of all, weshould note that it is quite difﬁcult to establish winning coalitions. In the EU-15,a winning coalition would need 62 votes out of 87. Conversely, it is quite easy toestablish a blocking minority of 26 votes, although opposition by two larger statesis insufﬁcient. Numbers are important, but in practice the Council has overruled oneor more national governments on only approximately one-quarter of all decisions(Hooghe and Marks 2001, 19). The remaining three-quarters indicate the existenceof a norm in the Council of Ministers that consensus-seeking and unanimity arepreferable. In fact, this norm has been documented (see Wallace and Wallace 2000,19). Even if formal voting does not take place, the possibility to do so still createspressure to make concessions – a phenomenon described as the ‘shadow of the vote’(Weiler 1991).In the decision-making phase, we would expect to ﬁnd that the adoption ofthe ET Directive was a result of intergovernmental bargaining. More speciﬁcally,we would expect that the member-states signiﬁcantly affected the ET Directive,particularly if they took the initiative to the system in the ﬁrst place. The EU ETSthus reﬂected the constellation of interests and preferences among member-states,given the decision rule applied. The tension between what Hoffman refers to as the‘logic of integration’ (Europeanism) and the ‘logic of diversity’ (nationalism) isinscribed in the sharing of competence between the ‘nationalism’ of the memberstates in the Council and the ‘Europeanism’ of the Commission and the Parliament(Hoffman 1966). However, some member-states are pushing for greater autonomythan others.This leads us to propose that the EU ETS reﬂects the interests and positionsof the member-states. Thus we expect to ﬁnd that: (1) the EU ETS ended up asbasically a decentralized system, providing signiﬁcant autonomy and discretion tothe member-states. In particular, decentralized allocation of allowances enables themember-states to adapt allocation to national needs; (2) the design of the EU ETSdid not deviate signiﬁcantly from the preferences of member-states that are large interm of votes and share of allowances under the ETS. Although opposition by twolarger states would be insufﬁcient to block a proposal in the formal sense, largermember-states would have signiﬁcant political weight as a result of a relatively largeshare of the total amount of allowances under the ET system.The implementation phase has been referred to as a phase where supra-nationalinstitutions meet a decentralized policy delivery system in which the memberstates play the dominant role. Implementation at member-state level is likely to beaffected by a wide range of factors at both national and EU levels (Skjærseth 2000).The institutional arrangements established in an early phase may be important foroutcome at later stages (Young 1989; Underdal and Hanf 2000). Previous research
22
EU Emissions Trading
has linked this assumption to access and participation (Victor et al. 1998). Theessence is whether and how the actors and organizations responsible for carrying outimplementation are involved in formulating positions and goals at an earlier stage ofthe policy process (Skjærseth ed. 2004).We shall develop this perspective further by focusing on the link between thedesign of the system itself and implementation. It is reasonable to assume that abasically decentralized ET system will promote high acceptance among memberstates. In particular, decentralized allocation of allowances will enable member-statesto adapt the allocation process to their own national circumstances. Participants whofeel ownership of the process are more likely to abide by the rules than those who donot feel such ownership based on a perception of fair or equitable process (Franck1990). High legitimacy will thus probably lead to smooth implementation in a‘formal’ sense. The point is that high inﬂuence in the initiation and decision-makingphase will indicate high legitimacy and willingness to follow through.However, there is likely to be a trade-off between high legitimacy and highenvironmental ambitiousness. A decentralized ET system will leave the allocationof allowances to the discretion of the member-states. Lack of harmonization willlead each state to allocate allowances in light of total allowances in ‘rival’ countries.Countries will thus be inclined to lower their ambitions to avoid loss of competitiveness(Porter 1999). The member-states will have incentives to protect their own industriesby providing them with generous allocations. This in turn means that high memberstate autonomy in the implementation of the EU ETS will probably lead to a ‘raceto-the-bottom’, resulting in relatively low environmental ambitiousness.Against this backdrop we propose that a decentralized EU ETS will lead to lowbut varying environmental ambitiousness due to differing national circumstances. Inline with this proposition, we expect to ﬁnd that: (1) the member-states have overallocated the total amount of allowances in relation to projected emissions; (2) thedifferences in member-state allocations are more striking than the similarities; (3)the most important explanation of varying allocation can be found at the domesticlevel.19 Against this background, we will undertake a preliminary assessment ofimplementation. True, this is still at a relatively early stage, but the ﬁrst round ofallocation has been completed, the ﬁrst actual emission ﬁgures have been published,and the second round of allocation is near completion at the time of writing.EU Institutions and Non-state ActorsThe second explanation of why the European Union developed the emissionstrading scheme after initial scepticism is that the EU institutions and non-stateactors at EU level changed their positions, procedures or strategies. Whereasintergovernmentalist approaches do not rule out the signiﬁcance of such changesin every respect, the impact of EU institutions and the inﬂuence of non-state actors19 For practical reasons, we do not assess implementation at target-group level. Thiswould require an assessment of whether operators and installations comply with monitoring,reporting and veriﬁcation requirements and the requirement to surrender allowances for eachtonne of emissions controlled by the system.
Analytical Framework
23
represent key explanatory factors within the multi-level governance approach.European institutions like the Commission, the Parliament and the Court of Justicehave been endowed with formal authority by the member-states. The Commissionhas the exclusive right to initiate legislation, the Parliament has a formal right toamend and even veto proposed legislation under the co-decision procedure, andthe European Court of Justice can enforce legislation (especially together with theCommission). By contrast, industry and ENGOs do not enjoy these formal rights.What such non-state actors have is mainly the informal power to protract, amendand possibly block legislation.20EU InstitutionsThe intergovernmentalist approach tends, as noted, to downplay the independentrole of the EU institutions. The conditions whereby a supra-national entrepreneurlike the Commission can wield effective inﬂuence (such as privileged access tothe information and ideas necessary to act as entrepreneurs) have been held to beexceedingly rare in the EU (Moravcik 1999a, b). Ideas generally emanate from abroad range of sources external to the Commission, including requests from otherEU institutions and responses to international obligations (Hooghe and Marks 2001,13). In fact the Commission has maintained that only 5 to 10 per cent of legislativeproposals arise ‘spontaneously’ within the Commission itself (ibid.).It has been suggested that the Commission’s entrepreneurial role is mostprominent when there is domestic uncertainty and disagreement – implying thatthe member-states’ positions in these cases tend to be less ﬁxed or strong, leavingthe ﬁeld more open to supra-national entrepreneurs (Moravcik 1999a, b). AlsoArild Underdal points to complexity as a central conditioning factor for the role ofleadership in negotiation processes in international institutions: ‘the more complexthe problem and the less compatible the actors’ interests, the greater the scope forinstrumental leadership’ (1994, 192).In the phase of policy initiation, several factors would lead us to expect aprominent role for the Commission. As mentioned earlier, the Commission isbasically the main formal agenda-setter in the EU. The speciﬁc case of emissionstrading has been characterized by a generally high lack of knowledge and intrinsiclevel of complexity. This was an instrument which few actors in the EU, apartfrom scientists and researchers, knew much about or had any practical experiencewith. Taken together, this forms the basis for an assumption along the lines that theemissions trading initiative belonged to the minority category referred to above: itwas the Commission that independently launched emissions trading as a major EUclimate policy instrument. The Commission may have been motivated by the needfor new policy instruments to achieve relevant climate goals.With regard to the Commission’s ability to take things forward speedily, this isclearly related to the degree of internal cohesion and agreement in the Commissionitself, a body that has been characterized as basically segmented (Sbragia 2000,20 This does not mean that non-state actors have no formal right in EU policy-making.For example, the 1998 Aarhus Convention gives certain rights to information.
24
EU Emissions Trading
298). Among the 23 directorates general, Directorate General (DG) Environment hasbeen depicted as being weak, with a very small staff compared to other DGs; somehave even claimed it is dominated by ‘ecological freaks’ (Grant et al. 2000, 21). Inthe intra-Commission power play, it has been maintained that the DGs concernedwith industrial and economic affairs generally try to weaken or block proposalsintroduced by DG Environment, and these DGs concerned with economic affairstypically have far greater resources and technical expertise than DG Environment(Sbragia 2000; Weale et al. 2000, 119).One would assume that the DG Environment of the European Commission hasthe easiest internal ride with policy ideas and proposals that resonate – or can beframed to resonate – well with main thinking and preferences in these other andmore powerful directorates. Seen in this light, emissions trading could have been acomparatively good case for DG Environment. Such trading offers industry greaterﬂexibility and ﬁnancial incentives than command-and-control and taxes. Hence, thetrading idea can be assumed to have resonated reasonably well with the traditionalDG Environment counterparts indicated above.In essence, we propose that the Commission changed its position on emissionstrading and initiated the EU ETS independently (not as a response to a speciﬁcrequest from member states and anticipated broad-based support). According to thisproposition, we expect to ﬁnd that: (1) the European Commission actually changedits position and announced the plans for an EU ETS to the member-states; (2) theCommission built independent internal knowledge on emissions trading design; (3)the Commission actively promoted the idea of emissions trading to stakeholders andtried to win support for an EU Emissions Trading Scheme.In the decision-making phase, the Commission has often continued to play animportant role. Although the Commission is no formal legislator, as is the case ofthe European Parliament (EP), it may still be quite inﬂuential in the decision-makingphase. As noted by Nugent (1999, 120 and 370), under the co-decision procedure itis difﬁcult for the Council or the EP to amend a Commission proposal without theCommission’s agreement. If the EP and the Council agree to adopt a proposal atthe ﬁrst reading in the Parliament, then this is possible only if there is unanimoussupport in the Council for the amendments on which the Commission does notagree. If the Council and the EP do not agree at the ﬁrst reading, the Council goes onto adopt a common position, and subsequently a second reading takes place in theEP. To assist the EP in its deliberations, the Commission must explain its position,including whether or not it will accept EP amendments. The EP can then onlyadopt amendments not accepted by the Commission in the second reading with thesupport of an absolute majority of its component members (and, similar to the ﬁrstreading situation, the Council can do so only by unanimous support). As commentedby Nugent (1999, 367), this is a procedure ‘that strongly encourages the EP, theCouncil and the Commission to engage in intensive and extensive inter-institutionalbargaining’.Furthermore, the Commission can inﬂuence decision-making through informationand expertise demanded by the Council of Ministers. As pointed out by Nugent (1999,140), being seen as non-partisan, the Commission is well-placed to act as mediatorand conciliator. But it also has a more active side: Hix (1999) and Hooghe and Marks
Analytical Framework
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(2001) provide several examples of the Commission’s ability to act as a tactically verycapable player, at any time able to issue revised proposals and free to frame policyissues in the way it perceives most likely to secure support in the legislative process.The Commission can be seen as a policy entrepreneur, ‘selecting the policies thatpromote its interests; restricting the available choices for governments; continuallypressing and negotiating until it gets what it wants; and involving other actors in thepolicy process to force reluctant governments to accept its proposals’ (Hix 1999, 237).Given the speciﬁc issue characteristics of emissions trading discussed above, there aregood reasons to expect a relatively prominent continuing role for the Commission inthe ETS decision-making phase. This is particularly likely if the Commission initiatedthe ETS independently. The Commission is likely to seek backing for upholding asystem with high degree of harmonization at EU level, giving it a comparativelystrong position in the further development of the system.The European Parliament has become increasingly important and in fact aco-legislator together with the Council of Ministers. The 1993 Maastricht Treatyintroduced the co-decision procedure and the 1999 Amsterdam Treaty made it thestandard procedure on environmental legislation (Haigh 2006). As noted above, codecision means, among other things, that the EP can propose amendments in tworounds (‘readings’) and may veto the adoption of an entire proposal if it feels that itsamendments are not sufﬁciently reﬂected in the ﬁnal text.21The EP has often been depicted as the greenest of the EU institutions (see Sbragia2000, 302), inducing governments to accept tougher standards on for instance sulphurin motor fuels, power-station emissions and packaging waste. There are variousreasons for this relative greenness (see Weale et al. 2000, 92–93; Wurzel 2002, 70).First, the Parliament is organized into 20 committees, and its comparatively largeenvironment committee (the 60-member Committee on the Environment, PublicHealth and Food Safety) is generally seen as internally powerful and the natural allyof the DG Environment. Second, there is the inﬂuence of the Green MEPs withinthe Parliament, whose representation may be proportionately larger than within agiven member-state. Third, the environment is one of the truly transnational issuesdealt with by the EU. ‘As such, European elections, commonly fought on a domesticagenda, have in the environment a distinctly European issue which is appropriatelyaddressed by the Parliament’ (Weale et al. 2000, 93).However, it should also be kept in mind that the 1999 elections to the EuropeanParliament ‘dethroned’ the Socialist group (PSE) from the majority position in theEP and put the centre-right group (European People’s Party, Christian Democrats –EPP) in this position (Bomberg and Burns 1999).22 Still, the EP’s large environmental
21 The adoption of a proposal usually requires two readings. If the Council acceptsall Parliament’s amendments in the ﬁrst reading, the proposal can be adopted at the ﬁrstreading.22 This has led analysts such as Grant et al. to question the ‘greening’ effect of the EPand characterize it as basically unpredictable: ‘The parties of the centre-right who becamethe largest single group after the 1999 elections tend to be resistant to any calls for higherstandards that impose signiﬁcant costs on industry, while even the support of the Greenscannot be relied upon as they may prefer ‘no action to bad action’ (Grant et al. 2000, 36).
26
EU Emissions Trading
committee and the transnational nature of climate politics lead us to expect to ﬁndthe Parliament functioning as a watchdog for the environmental integrity of the ETproposal. The natural policy response to the ‘race-to-the-bottom’ referred to aboveis a higher degree of harmonization in the allocation of allowances. We would thusexpect the EP to prefer a high degree of harmonization at EU level.As the Commission, it is natural to assume that the EP has most relative clouttowards the other EU bodies if it is internally uniﬁed (Weale et al. 2000, 93).23However, building agreement in the EP on the speciﬁc issue of emissions tradingmay not necessarily have been easy. As indicated, the instrument of emissions tradingis multi-faceted and complex, while the EP has been characterized as suffering froma ‘technological deﬁcit’ and generally lacking scientiﬁc and technical information(Wurzel 2002, 71; Weale et al. 2000, 117). Complex issue characteristics probablymake effective leadership even more important for building internal agreement andcommunicating well externally. In addition to the Committee Chair, the role of therapporteur is central here (see Nugent 1999, 238). The rapporteur is responsible fordrawing up the committee’s report on a speciﬁc policy proposal and acting as thecommittee’s principal spokesman on the proposal. Effective committee chairs andrapporteurs should generally be able to build bridges and communicate well withany groups inclined to resist an initiative.In essence, we propose that the EU ETS reﬂects the harmonization ambition ofthe positions of the Commission and the Parliament rather than the positions of themember-states. Accordingly, we expect to ﬁnd that: (1) the Commission and theParliament preferred a more centralized system than the member-states (to counterincentives for member-states to protect their own industries by providing them withgenerous allocations); (2) the EU ETS was basically a centralized system providinglittle autonomy and discretion to the member-states; (3) the design of the EU ETSdid not deviate signiﬁcantly from the positions of the Commission and particularlythe Parliament on harmonization of other design issues than the degree of constraintplaced on member-states’ total allocation of allowances.The Commission has executive power and oversees implementation. In this phase,the Commission has the authority to exert pressure on member-states to observe theprovisions of EU environmental law. Such pressure is exercised in the shadow ofthe European Court of Justice (ECJ). Implementation of environmental legislationhas long been a problem in EU environmental politics. Jordan (1999) refers to thisproblem as an ‘implementation gap’. This gap is likely to increase when the matchbetween existing policy instruments and those emerging from EU policies is low(Knill and Lenschow 2000).In a highly harmonized and centralized ETS shaped largely by the Commissionand the Parliament, we would expect signiﬁcant ‘formal’ implementation problemsamong member-states. This is likely to occur whenever the positions of the memberstates are not sufﬁciently taken into account. On the other hand, a centralized andharmonized system will provide the Commission and the ECJ with signiﬁcantauthority and power to oversee the allocation process. Common procedures and23 As stated by Bomberg and Burns (1999, 178):’For the EP to stand up to other institutionsover legislation it must act as one by securing an absolute majority of all its members’.
Analytical Framework
27
criteria for allocation of allowances will counterbalance a ‘race-to-the-bottom’dynamic among member-states and pull in the direction of high(er) environmentalambitiousness.Against this background, we propose that a centralized EU ETS will leadto generally high environmental ambitiousness, due to common EU criteria.Accordingly, we expect to ﬁnd that: (1) scarcity is provided for in the market byallocation of signiﬁcantly less allowances than are projected to be needed; (2) thesimilarities in the member-state’s implementation of the EU ETS are more strikingthan the differences; (3) the most important explanation of implementation is to befound at EU level, particularly in common allocation criteria and the pressure of theECJ and the Commission on member-states.Non-state Actors at EU LevelNon-state actors have generally played an important role in the making of EUenvironmental legislation, even though industry and ENGOs have no formal rightto initiate or veto EU legislative proposals (see Grant et al. 2000). As it is extremelydifﬁcult to systematically assess the inﬂuence of non-state actors in all three policyphases under scrutiny here,24 this section seeks to develop general assumptions onthe strategies and sources for inﬂuence of non-state actors, rather than any speciﬁcpropositions linked to the initiation, decision-making and (particularly) implementationof the EU ETS.25We assume that a development towards converging and supportive positionswithin and between industry and ENGOs represented a necessary condition for therapid making of the EU Emission Trading Scheme. During the Kyoto negotiations,most Europe-based green organizations united in their opposition to emissionstrading under the slogan ‘trading pollution is not a solution’. Industry – particularlythe fossil fuel industry – opposed any mandatory targets and measures, but wasmore positive to emissions trading than taxes. From an industrial perspective, themain difference is that emissions trading provides companies with a tradable asset,whereas taxes extract revenues from companies.
24 This does not imply that it is impossible to develop propositions related to speciﬁcpolicy phases. In the policy initiation phase, the need for external information opens up forpolicy learning by the Commission and gives non-state actors a possibility to inﬂuence policyinitiation by their expertise. The hardest task for non-state actors, particularly ENGOs, isprobably to inﬂuence the Council of Ministers in the decision-making phase. At this stage,and under qualiﬁed majority, lobby activities must be coordinated across the member states.Finally, non-state actors are important for implementing environmental legislation as privatecompanies constitute the main operators within the EU ETS. In addition to their agendasetting role, ENGOs can here perform the role as ‘watchdogs’ in the implementation phase bynotifying the Commission of non-compliance.25 As noted above in note 19, assessing implementation at target-group level would betoo challenging.
28
EU Emissions Trading
Supportive and converging positions may evolve from at least two differentrelationships between the EU and non-state actors.26 First, the EU institutions canaffect the strategies of non-state actors by providing new knowledge, pressureor commercial opportunities (Skjærseth and Skodvin 2003). Second, non-stateactors can affect EU policy.27 This latter relationship is examined below. We payparticular attention to industry, as companies constitute key operators in the EU ETSsystem.28Lobbying is seen as an integrated part of the EU policy-making process (Andersenand Eliassen 2001).29 Industry and green organizations can provide information andex