Jørgen Wettestad

This article discusses the proposal for an EU emissions trading system for transport and buildings (the ETS2), again with the EU as an international pioneer. How did this controversial proposal come to be adopted in 2023? This study links up to recent EU studies highlighting co‐ordination and interaction between the EU institutions. The Commission helped bring about the ETS2 by strategically using different types of issue linking, both positively and more coercively. In the Parliament, senior members of the European Parliament managed to increase support for the ETS2 by inter‐institutional networking and achieving concessions as to flexible mechanisms. Amongst the member states, heavyweight ETS2 proponents had help from the Commission in bringing sceptical countries on board. Hence, several types of synergistic interaction can be noted, facilitated also by trilogues as the more intimate arena for final compromises. Not least, the increasing role of policy packaging highlights the need for further research on changing inter‐institutional dynamics.

A core element in the EU’s Governance regulation (Regulation 2018/1999) is the regular production of National Energy and Climate Plans (NECPs). The process involves a dialog with the European Commission intended to lead to changed and improved plans. This new policy mechanism has been characterised as ‘harder soft governance’. Although member states are not obliged to specify binding targets for renewables and energy efficiency, they must report their contribution to fulfilling the overall European target. Furthermore, they must develop a plan for how to reach these contributions (the NECP). In this article we discuss NECP implementation in the first round of establishing NECPs in two traditional climate-policy frontrunners in the EU: Germany and Sweden. A key finding is that both countries did not perceive the NECP process as particularly important for national policy-making. Central targets and measures were mainly based on policies developed independently of the Governance Regulation. However, interaction with the Commission was more important for ‘reluctant’ Sweden than ‘Governance supporter’ Germany. Our study shows that both countries eventually produced the required contributions and plans, lending support to the argument that this new regulation has some ‘harder soft governance’ elements that will influence member states.

In April 2023, the EU institutions finally adopted an innovative international climate policy instrument: the Carbon Border Adjustment Mechanism (CBAM). As the long and winding road to a CBAM has included significant EU‐internal and EU‐external opposition, a “shifting Multi‐Level Reinforcement” (MLR) perspective is helpful for understanding this development. When France assumed initial leadership from 2007, skepticism to the WTO, generous amounts of free allowances, combined with a low carbon price, provided a strong oppositional force. Then, influential elements in the European Parliament called for a carbon border tax, which was subsequently included as a central ingredient in the “Fit for 55” package launched by the Commission, In the decisionmaking process, leadership involving all the previous forces resulted in an institutional reinforcement dynamic strong enough to counter EU‐internal as well as EU‐external challenges and ‘turbulence’. This case shows the relevance of an updated MLR perspective for understanding also other EU processes, taking into account the growing role of both policy packages and trilogues as decisionmaking tools, indicating a possible strengthened role for the Commission also in the decisionmaking phase.

For a number of years, the main EU policy response to concerns about carbon leakage. i.e. the relocation of production to jurisdictions with more lax climate policies, was to maintain a large proportion of free allowances under the EU Emissions Trading System. But another possible response has taken the form of a carbon border adjustment mechanism (CBAM). This chapter explores why the CBAM option gained such prominence from 2019 in particular, culminating in a formal proposal tabled in mid-2021. It identifies France as a consistent advocate of the idea. Furthermore, the appointment of the von der Leyen-led Commission in 2019 and the advent of the European Green Deal constituted a central turning point, although von der Leyen’s support of the CBAM idea appears to a large degree a response to European Parliament pressure. The chapter also discusses central dynamics in the decision-making process and prospects ahead, which are rendered more uncertain by the Russian invasion of Ukraine in May 2022.

Norway, a significant petroleum producer and exporter, has been a frontrunner within policies for carbon capture and storage (CCS). As CCS is recognized as a key technology for achieving the Paris climate policy targets, there is a clear need for more knowledge about how to design successful projects. Norway's first CCS policy initiative, the ambitious Mongstad project, was the result of a political compromise that was imposed from above, basically with one single company in control. The project was largely seen as a failure and was terminated in 2013. However, instead of dropping ambitions for developing CCS projects, the authorities launched a new policy soon afterwards. This policy evolved with the differently organized Longship CCS project as its core. Using a path‐dependency perspective, we find that established institutional structures from the Mongstad project, combined with national interests and expertise, help to explain the fundamental continuity of CCS policies in Norway. This explanation is supplemented by a policy‐learning perspective, which helps to explain policy changes and differences between the two flagship CCS projects. The Longship project developed gradually ‘from below’; linked project responsibilities close to competences and interests; dealt with key risks separately to reduce the inherent complexity; and organized clear requirements up front. We hold that this way of designing CCS projects is of relevance to other countries considering CCS projects. Furthermore, by placing the Norwegian case in context of the development of EU and international climate policy we contribute a theoretical framework relevant also for subsequent research.