Norm Entrapment and Preference Change: The Evolution of the European Union Position on International Emissions Trading

The European Union's position on the incorporation of emissions trading into the Kyoto Protocol presents an interesting puzzle. The EU opposed American efforts to integrate international emissions trading into the Protocol. However, after 1998 the EU gradually emerged as one of the primary innovators in developing both its internal trading program as well as the international one. How do we explain the transformation of the EU position on trading? The conflict over emissions trading was intimately tied to normative debates surrounding the appropriateness of mechanisms to achieve GHG emission reductions. The EU advocated a norm requiring states to undertake domestic policy changes as the only legitimate mechanisms to reduce domestic emissions. The United States on the other hand argued that the international response had to be guided by the principle of economic efficiency. By 1998, the European Union and most of its member states had accepted that emissions trading offered a viable mechanism to reduce the costs of achieving emission reductions. However, its prior efforts to frame international emissions trading as an illegitimate mechanism constrained the EU's ability to alter its position. It was only after the United States rejected the Kyoto Protocol that the EU was able to promote emissions trading as a legitimate strategy to meet the Kyoto target. The EU reframed the issue of emissions trading from an illegitimate American attempt to shirk domestic responsibilities into a legitimate strategy to salvage the Kyoto Protocol without American participation. This shift in framing was a necessary condition to permit the EU to establish a leading position in the development of the international emissions trading mechanism. This case study of preference change offers evidence of the important role that international normative debates and issue framing can play in international environmental policy. Copyright (c) 2005 Massachusetts Institute of Technology.