Market Power: EU Climate Leadership Reconsidered

How did the European Union (EU) emerge a global leader in twenty-first century climate governance? While the United Nations (UN) pioneered collective climate action in the 1980s and some national governments implemented carbon taxes in the 1990s, the EU seemingly took the lead on climate change mitigation when it launched an international emissions trading system in 2005, facilitating the Kyoto Protocol compliance of 30 countries in the region. By reconstructing debates about market mechanisms for mitigating climate change among EU economists and officials and between the EU and other global governance fora – especially in the OECD and UN – this article traces the development of the EU Emissions Trading System in its global context and uncovers the role of the market in climate governance. Consequently, it reconsiders whether the EU has been a climate leader or an economic one.