The Evolution of Carbon Markets: Design and Diffusion, 1st Edition (Hardback) book cover

The Evolution of Carbon Markets

Design and Diffusion, 1st Edition

Edited by Jørgen Wettestad, Lars H Gulbrandsen


264 pages | 13 B/W Illus.

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Carbon markets are developing and expanding around the world, but how and to what extent is their design shaped by learning and interaction between them? How do these markets function and what is the role of design?

Carrying out a ground-breaking analysis of their design and diffusion, this book covers all the major carbon market systems and processes around the world: the EU, RGGI, California, Tokyo, New Zealand, Australia, China, South Korea and Kazakhstan. It offers a systematic, in-depth discussion and comparison of the key design features in these systems with expert contributors exploring how, and to what extent, these features have been shaped by central policy diffusion mechanisms and domestic politics.

By focussing on the specific design features of the instruments used, this volume makes important contributions to diffusion theory, highlighting how ETS diffusion processes more often have resulted in design divergence than convergence, and discussing the implications of this finding for the vision of linked systems in the post-Paris era. It will be of significant interest to a broad audience interested in the emergence, evolution, functioning and interaction of carbon markets.


"In a globalized world, characterized by competition and opportunities for emulation and learning, emissions trading systems in different jurisdictions might be expected to converge toward a common design. Instead, over the last twenty years, designs of these systems have diverged in numerous ways. The Evolution of Carbon Markets shows that "diffusion" can usefully be redefined to include learning and adaptation leading to policy divergence. Divergence – whether as a result of diffusion or autonomous action - is generated by the fact that interests and the configurations of potential winning coalitions vary across jurisdictions. The design of emissions trading systems is profoundly shaped by domestic politics." - Robert O. Keohane, Professor of Public and International Affairs, Emeritus, Princeton University

"This is an important and enlightening book that should be required reading for students, scholars, and policy-makers interested in carbon markets and climate change. Providing an unparalleled picture of the global status of carbon markets, it is the most comprehensive examination of the politics of emissions trading systems available. By bringing together both domestic political dynamics and international diffusion processes in one analytic framework, the volume provides insight into the widespread adoption of emissions trading and the ways that is has developed in different ways in diverse places. The insights developed in the volume have significant implications for the development of global carbon markets and lay bare the opportunities and challenges for emissions trading to play a major role in the global response to climate change." - Matthew Hoffmann, Professor of Political Science, University of Toronto, Canada

"Emissions trading has emerged as a key policy response to the urgent problem of global climate change. Yet little is still known about how and why a diversity of countries, regions and cities have embraced the policy instrument. By bringing together an impressive range of case studies – from California to China – this book underscores the context-specific nature of emissions trading, and provides timely insights into the prospects for a global carbon market." - Harro van Asselt, Professor of Climate Law and Policy, University of Eastern Finland

Table of Contents


Chapter 1 Introduction

Jørgen Wettestad and Lars H. Gulbrandsen

Chapter 2 Theory and Method

Lars H. Gulbrandsen, Arild Underdal, David G. Victor and Jørgen Wettestad

Chapter 3 EU Emissions Trading: Frontrunner – and ‘Black Sheep’?

Jørgen Wettestad and Torbjørg Jevnaker

Chapter 4 The Regional Greenhouse Gas Initiative: US Pioneer Seeking to Avoid EU Mistakes?

Solveig Lygre and Jørgen Wettestad

Chapter 5 California’s Cap-and-Trade Programme: The Role of Diffusion

Guri Bang, David G. Victor and Steinar E. Andresen

Chapter 6 Tokyo’s Emissions Trading System: Japan’s First Mandatory Cap-and-Trade Scheme

Masahiko Iguchi

Chapter 7 Adopting and Designing New Zealand’s Emissions Trading Scheme

Tor Håkon Jackson Inderberg, Ian Bailey and Nichola Harmer

Chapter 8 Australia: Domestic Politics, Diffusion and Emissions Trading Design as a Technical and Political Project

Ian Bailey and Tor Håkon Jackson Inderberg

Chapter 9 South Korea: East Asian Pioneer Learning from the EU

Katja Biedenkopf and Jørgen Wettestad

Chapter 10 Emissions Trading in Kazakhstan: Complex Application of the ‘EU Model’

François Sammut, Lars H. Gulbrandsen and Jørgen Wettestad

Chapter 11 China’s Carbon-Market: In it to Learn it

Iselin Stensdal, Gørild Heggelund and Duan Maosheng

Chapter 12 ETS Design and Potential Effects in China: Comparison with the EU

Christoph Böhringer, Knut Einar Rosendahl and Tang Weiqi

Chapter 13 Comparative Analysis and Conclusions

Jørgen Wettestad, Lars H. Gulbrandsen, David G. Victor and Arild Underdal

About the Editors

Jørgen Wettestad is Research Professor at the Fridtjof Nansen Institute in Oslo, Norway. He has published several books and numerous articles on international and EU environmental policy, with particular attention to emissions trading. His most recent books are Rescuing EU Emissions Trading: The Climate Policy Flagship. Palgrave 2016 (together with Torbjørg Jevnaker) and EU Climate Policy: Industry, Policy Interaction and External Environment. Ashgate, 2013 (together with Elin L.Boasson). He has been a visiting scholar at IIASA, Austria, and the Institute for International Studies, Berkeley, CA. He has also led and participated in several EU funded projects, participated in numerous international research projects, and been Programme Director at the FNI for a long period. Wettestad serves regularly as peer reviewer for international journals and national research councils, and has been editorial board member of the journal Climate Policy since 2001.

Lars H. Gulbrandsen is a research professor and the deputy director at the Fridtjof Nansen Institute, Norway, where he also served as director of the research programme on Global Environmental Governance and Law (2000-2016). His main research interests are within the fields of global environmental politics and international political economy, with a particular focus on climate and energy policy, forest and fisheries certification, private regulation and governance, and corporate social responsibility. He holds a PhD in political science from the University of Oslo and an MSc from the London School of Economics, and has been a visiting scholar at the Kennedy School of Government, Harvard University. Gulbrandsen participates in several international research projects, serves regularly as peer reviewer for international journals and national research councils, and is editorial board member of the journal Global Environmental Politics.

About the Series

Transforming Environmental Politics and Policy

Transforming Environmental Politics and Policy
The theory and practice of environmental politics and policy are rapidly emerging as key areas of intense concern in the first, third and industrializing worlds. People of diverse nationalities, religions and cultures wrestle daily with environment and development issues central to human and non-human survival on the planet Earth. Air, Water, Earth, Fire. These central elements mix together in so many ways, spinning off new constellations of issues, ideas and actions, gathering under a multitude of banners: energy security, food sovereignty, climate change, genetic modification, environmental justice and sustainability, population growth, water quality and access, air pollution, mal-distribution and over-consumption of scarce resources, the rights of the non-human, the welfare of future citizens-the list goes on. What is much needed in green debates is for theoretical discussions to be rooted in policy outcomes and service delivery. So, while still engaging in the theoretical realm, this series also seeks to provide a 'real world' policy-making dimension. Politics and policy making is interpreted widely here to include the territories, discourses, instruments and domains of political parties, non-governmental organizations, protest movements, corporations, international regimes, and transnational networks. From the local to the global-and back again-this series explores environmental politics and policy within countries and cultures, researching the ways in which green issues cross North-South and East-West divides. The 'Transforming Environmental Politics and Policy' series exposes the exciting ways in which environmental politics and policy can transform political relationships, in all their forms.

Learn more…

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