Governance and Environmental Policy Integration in Europe: What Can We learn from the EU Emission Trading Scheme?

The European Union Emission Trading System (EU ETS) is a landmark environmental policy, representing the world’s first large-scale greenhouse gas (GHG) trading program. The coexistence of state actors and top-down processes with stakeholders participation and flexible abatement strategies make the EU ETS a powerful instrument of cross sectoral integration of environmental concerns, which benefits from a high level of interaction among the actors involved and a significant degree of information exchange. However, the same peculiarities of the system make it difficult to identify a correspondence with a single mode of governance. The EU ETS shows characteristics of the decision making processes and institutions engaged, the tools and instruments used as well as the actors involved, which change according to the different levels of governance, and belong both to the old and to the new modes of governance. The emission trading scheme represents a clear example of Multi-Level governance, where the different modes of governance interact among them and affect each other.