TRANSNATIONAL GOVERNANCE MECHANISMS IN EU POLICY MAKING The Case of Aviation and Emissions Trading Paper prepared for CSGR/GARNET Conference, University of Warwick 17‐19 September 2007 Katarina Buhr Department of Business Studies, Uppsala University, Box 513, SE‐75120 Uppsala, Sweden katarina.buhr@fek.uu.se
Work in progress – please do not quote INTRODUCTION The last couple of years, the aviation industry has found itself in the centre of a raging debate on global warming. The climate change impact of aviation is a truly global issue, crossing boundaries in terms of geography, jurisdictions and established practices, raising extraordinary challenges for policymakers. For many years, the rapidly growing operations of international aviation remained unregulated of its greenhouse gas emissions as the issue was circulated between governance levels. This exemption was due to a widespread conception that the sector inhabits characteristics extraordinary difficult to regulate. These difficulties include i.e. technical complexities of how to best address aviation’s true impact on global warming, how to make different routes comparable and the allocation of accountability. However, in 2005 the European Commission presented a far‐reaching proposal which has proved critical for the development of the first international regulation in this matter. In this proposal, aviation was outlined to be included in the European Union’s Emissions Trading Scheme (EU ETS), selling and buying pollution permits on a market for emission rights as a means to control its carbon dioxide (CO2) emissions (European Commission 2005). After years of debate on the feasibility of various policy alternatives, why was emissions trading chosen to be a core policy for aviation’s climate change impact? 1
I argue that the process of developing a proposal that prescribes emissions trading for the aviation industry was transnational in character, involving a complex compound of activities bridging the global and the local and a multitude of actors beyond states. In order to understand the embracement of this particular policy we need to direct attention to its constituency and how it has evolved over time. Who were the influential actors driving emissions trading for aviation and how were positions being formed in favour of this policy? THEORETICAL FRAMEWORK The theoretical components of my argument have been developed with reference to the neo‐
institutional sociological school of thought. In order to understand how regulation develops, I will argue for the need to study institution building in the transnational sphere. In particular, I point to the importance of addressing the origin of actors and the interplay of national and transnational structures. Contemporary regulatory activities are complex and not easily demarcated. They unfold between and across national boundaries and involve many actors besides states (Djelic & Sahlin‐Andersson 2006). By adapting a governance perspective, states are seen as equally important as other actors and regulation gets shaped in interaction between them. ‘Transnationalisation’ is a concept which allows inclusion of a broad range of actors at various levels in policymaking. This can be put into contrast with ‘internationalisation’ which is associated with inter‐state relations or ‘globalisation’ which denotes the disappearance of states. An institutional perspective on regulation enables an extension of the concept to include ‘all mechanisms of social control’ (Baldwin & Cave 1999). These can be intentional or unintentional development of social norms which all have an impact on behaviour (Baldwin, Scott & Hood 1998). Regulation is thereby seen as one kind of institution which prescribes rules of the game alongside cognitive and normative aspects (Scott 1995). Institutions structure action and are important for the formulation of certain regulation. Although institutions are establishments that become enforced by social processes of reproduction (Jepperson 1991) they are not necessary stable. On the contrary, they go through processes in which they become stabilised. More importantly for the purpose of this paper, they have origins and involve processes of institution building. 2
Djelic & Quack (2003) suggests that institution building in the transnational sphere occurs through a mutually dependent relationship between the national institutional frames and the transnational space. Building on these ideas, the concepts of trickle‐down and trickle‐up effects can prove useful. Through trickle‐down effects transnational institutional frames can challenge national institutional systems and through trickle‐up effects actors at local, national or regional level can extend their activities to the transnational sphere. Multiple national actors can extend their national contextual rationalities into the international sphere where they interact, confront and negotiate with each other. Through a similar reasoning, Halliday & Osinsky (2006) points to the need of ‘empirical inquire into the agents, mechanisms, and power structures that seek to institutionalise global legal norms and, not least, the local actors who contingently sponsor, adopt, adapt or reject them’. Whereas these studies recognise the importance of actors and arenas for institution building, few studies have illustrated how we empirically can trace national rationalities in the transnational sphere. If we want to enrich our understanding of the genesis of modes of governance, we need to direct attention to actors who engage in institution building and their origin. In particular, the paper at hand presents an empirical case study to illustrate the argument that such influences can origin from one national context. METHODOLOGICAL PROCEDURES My intention to study transnational governance processes involved in EU policy development requires data that focuses on but is not limited to the EU. I have strived to identify influential actors and events within or beyond the policy arena have proved particularly important in the policy development. Consequently, this paper builds on a qualitative set of data constituted of documents and interviews. One important source of empirical data was official EU policy documents which were identified by using PreLex, the European Union’s online database for tracking EU regulatory processes. A fundamental point of departure was to identify the key document for the European Commission’s recommendation of emissions trading which was achieved by reading policy documents in a qualitative manner. Further documents were brought into the dataset by identifying references that could reveal the way policymaking had proceeded and critical issues discussed over time. The solid foundation of documents was supported by 3
longitudinal data from the leading European environmental news service, ENDS Daily, allowing a broader picture of the debate to emerge. Finally, I have interviewed policymakers in the European Commission and representatives of European business associations who described their impression of the process and pointed out which influences they were subject to in developing an emissions trading scheme for aviation. EMPIRICAL CASE STUDY This empirical part of the study is structured into two main parts. First, the development of the debate is described in chronological order. Three phases were identified, illustrating how the focus of the debate has shifted over time. Thereafter, I direct attention to how a position for emissions trading was formulated within the European aviation industry to illustrate institution building processes and highlight issues of its origin. First phase: Climate change recognition and call for research In absence of a world state, the United Nations was selected as an arena for the states of the world to develop a global response to climate change. In 1992, the United Nations Framework Convention for Climate Change (UNFCCC) was created and since then it has been the main locus for international climate change debates. The so far most stringent rulebook that has come out of UNFCCC, the 1997 Kyoto Protocol, obliges a number of developing countries of the world to cut their domestic greenhouse gas emissions (UNFCCC 1998). In line with ideals on cost‐effectiveness and flexibility, an innovative instrument that uses market mechanisms to control greenhouse gas emissions was included in the Kyoto Protocol. By making companies in selected industries obliged to hold allowances to pollute, which are possible to buy or sell if the company does not correspond to assigned quota, a market for emission rights is created. Emissions trading has been celebrated as a cost‐effective and flexible means to reduce greenhouse gas emissions, not least in Europe were a broad variety of organizations participated in developing an EU‐wide trading scheme. During the course of a few years time, emissions trading became the core in the EU climate change policy framework, as manifested in the currently running EU ETS. The rapidly increasing demand for air travel became a growing concern in the 1990s climate change debate. Despite successful efforts to improve environmental efficiency in 4
aircraft engines, the projection for demand in air travel was such that it would result in a significant increase in total emissions. In 1996, the Intergovernmental Panel of Climate Change (IPCC) was given the task to pursue and summarise research on how aircrafts contribute to global warming (IPCC 1999). When the Kyoto Protocol was negotiated, international aviation was left out of the regulatory framework. Instead, it was decided that the specialised UN aviation body, the International Civil Aviation Organization (ICAO), would be delegated the task to pursue limitation and reduction of emissions of greenhouse gases from the sector (UNFCCC 1998). The decision of making ICAO responsible for developing a global regulatory response to international aviation’s contribution to global warming marked the beginning of a new intensified phase on the matter. Second phase: In between arenas and policy alternatives The EU had been discussing the possibility to impose a tax on aircraft fuel throughout the 1990s. As the environmental issue climbed the agenda, the EU undertook studies of the possibility to review a Directive from 1992 which provided a compulsory exemption for taxation on commercial aviation fuel (Council of the European Union 1992). In 1996, the European Commission recommended that taxation should be extended to aviation fuel ‘as soon as the international legal situation allows the Community to levy such a tax on all carriers including those from third countries’ (European Commission 1996). This lead the Council of the European Union to request the European Commission to provide further information on all aspects of the taxation of aircraft fuel (European Commission 2000). Consultant firm CE Delft was given the task to produce an analysis of this option. In 1998, it concluded that ‘the overall environmental effects of taxation would be comparatively small unless all flights to all destinations were taxed’ (CE Delft 1998). In October 1998, the 188 member states of the ICAO Assembly met for the first time after it has been appointed the task to develop a regulatory response to the sector’s impact on climate change. Research on aircrafts’ true impact on global warming remained limited at the time and the ICAO Assembly concluded to request its Committee on Environmental Aviation Protection (CAEP) ‘to study policy options to limit or reduce the GHG emissions from civil aviation, taking into account the findings of the IPCC special report and the 5
requirements of the Kyoto Protocol and to report to the next ordinary session of the Assembly’ which would take place in 2001 (ICAO 1998). The transport directorate of the European Commission (DGVII) continued to investigate options for addressing aviation’s environmental impact. In the summer of 1998, they glanced at a successful deal struck with European car manufacturers where the industry had agreed to reduce CO2 emissions from new cars through voluntary measures (ENDS 1998a). Voluntary agreements for climate change control at EU level were hailed by politicians and industry although environmental groups and the European Parliament remained sceptical. Shortly after the car manufacturers’ deal the cement, chemicals, steel and energy industries all told the Commission that voluntary deals were their preferred policy instrument (ENDS 1998b). This lead EU transport commissioner Neil Kinnock to encourage the aviation industry to come forward with voluntary approaches in the same manner as the car manufactures had (ENDS 1998c). During the summer of 1999, aircraft operators and manufacturers cooperated to develop proposals of voluntary agreements which was presented to the European Commission in November 1999 (ENDS 1999). However, the idea of a voluntary approach was dashed in the beginning of 2000, as the aviation sector and the European Commission could not agree on annual reductions in fuel consumption (ENDS 2000a). Firms would not agree to more than annual reduction targets of 1.1%, which was rejected by the European Commission as insufficient who wanted to aim for 4‐5% in annual reductions. Thus, parties failed to reach a voluntary deal. In parallel with the discussion on voluntary instruments, the aviation sector promoted the potential of reducing emissions through improvements to current Air Traffic Management (ATM) systems. An official in the European Commission said, however, that efficiency improvements would not be sufficient to replace economic or regulatory action (ENDS 1999). New technology developments for engines and aircrafts to be more environmentally friendly were also frequently discussed. Such reductions had to be made through massive fleet renewals in which old aircrafts were replaced by new ones. This could not be done overnight. In a joint statement, AEA and aerospace industry association AECMA said major emission reductions through new technology developments would only be possible after 2012. 6
The European Commission launched a Communication in December 1999 which outlines different policy alternatives to target aviation’s environmental impact (European Commission 1999). The focus in this Communication was on taxes and charges, but emissions trading is mentioned in the following way: ‘The trading of emission rights is a new concept that is largely untested in the aviation field…. Therefore, the Commission firmly intends to undertake further studies to look at implementation and may prepare an initiative to be launched at a later stage’. The European Commission concluded in March 2000 in a Communication on taxation of aircraft fuels that ‘it would not be practicable or desirable for the Community as a whole to introduce taxation of aircraft fuels targeting exclusively intra‐Community flights operated by Community air carriers at the present time’ (European Commission 2000). The main argument underlying this conclusion was the limited environmental effects shown in previous studies undertaken during the 1990s, including the 1998 CE Delft report. However, the European Commission proposed to allow for EU member states to impose aviation fuel taxes on domestic flights and bilaterally on international routes. This proposal was met by a massive outcry from European airlines (ENDS 2000b). The Association of European Airlines (AEA) said that the proposal was ‘confused and confusing’ since ‘the study [that underlay it] demonstrated, in every tax scenario it considered, a high cost, both in money and jobs, which was out of all proportion to the microscopically small environmental benefits.’ Instead, AEA restated the industry’s willingness to enter a voluntary agreement on carbon dioxide emissions. At international level, efforts were concentrated towards to the next ICAO Assembly meeting which were to be held in October 2001. Overshadowed by the unforeseeable September 11th terrorist attacks, climate change was not at the top of the agenda (ICAO 2001). The main outcome of this meeting with regards to climate change was to continue to encourage states to promote scientific research and request continuous close cooperation between organisations involved in the definition of aviationʹs contribution to environmental problems in the atmosphere. The locus of responsibility for developing a regulatory response to international aviation’s contribution to global warming was a controversial and contested concern. A number of actors, including the EU, argued for the UNFCCC to bring international aviation 7
back into its jurisdiction. On the other hand there was support, not least from American actors, to keep ICAO responsible for regulating the aviation industry (Interview B 2005). For ICAO, the idea that the UNFCCC would be given responsibility over this area of competence and jurisdiction became an important motivation for and driving force of its efforts to deal with climate change (Aberyratne 2001). The ICAO Assembly perceived such potential interference as a threat to its own jurisdictional authority, and repeatedly called upon the ICAO Council not to leave aviation matters related to the environment to other organisations (ICAO 1998, ICAO 2001, ICAO 2004). In October 2001, the Council of the European Union reiterated that urgent action remained necessary to curb the expected growth in emissions from international aviation (Council of the European Union 2001). Climate change was also made one of four priorities in the European Commission’s 6th Environment Action Programme. With regards to aviation, one of the objectives within the programme was to ‘identify specific actions to reduce greenhouse gas emissions from aviation if no such action is agreed within the International Civil Aviation Organisation by 2002’ (European Commission 2001). By 2002, ICAO had not put forward any regulatory proposal considered satisfactory in this matter. In October 2002, the Council of the European Union invited the Commission to consider specific action to reduce greenhouse gas emissions from aviation in accordance with the 6th Environmental Action Programme’ (Council of the European Union 2002). Third phase: The EU takes action for economic instruments The issue of aviation’s climate change impact was of interest to several DGs in the European Commission (Interview A 2005; Interview B 2005). In particular, it was overlapping the responsibilities of DG Environment and DG Transport. Climate change was addressed by the DG Environment whereas transport issues were the duty of DG Transport and Energy. Both of these DGs appointed one person with the task of taking a policy forward as regards to aviation and climate change. DG Transport and Energy recruited an official that had been involved in the UK Department for Transport in preparing a national government policy in which emissions trading had been selected as the best way to address aviation’s climate change impact (Interview B 2005). DG Environment and DG Transport and Energy had 8
extensive contact throughout the process and they met frequently to try to find common ground although representing and defending often conflicting interests. On 14 October 2003, British airport operator BAA hosted a conference in which a number of central actors were invited. ENDS reports: ‘The so‐far muted debate on whether emissions trading should apply to the EU aviation sector leapt forward on Monday when environment commissioner Margot Wallström welcomed a proposal by British airport operator BAA to integrate aviation into the blocʹs emission trading scheme as a ‘possibility [that] merits serious consideration’. Ms Wallström, for her part, insisted that discussions on aviation emission trading, while useful, should not be used to divert attention from fuel taxation and en route environmental charges on flights’ (ENDS 2003). The pressure from the Council of the European Union continued. In December 2003, it once again emphasised the need to address the treatment of emissions from international aviation in any climate change regime (Council of European Union 2003). Moreover, it called upon the European Commission to consider action and to make proposals before 2005. During 2004, UK governmental representatives began to address aviation and climate change in national and international speeches, announcing their intention to push hard for a far‐reaching policy proposal during their upcoming EU Presidency in 2005. These speeches were made by a number of actors such as government officials and DG Environment Director General Catherine Day (observation 2004). In July 2004, the Council of the European Union outlined a commonly shared EU position for the forthcoming ICAO Assembly meeting (Council of the European Union 2004a). Its main focus was use of economic instruments. While confirming its determination to continue demonstrating leadership in international efforts to mitigate global warming, it recognised the difficulties of implementing taxes, charges and voluntary agreements. Cautious optimism was expressed towards emissions trading: ‘Some EU states have expressed interest in pursuing the possibility of extending the scheme to cover emissions from aviation. However, the Commission needs first to examine a number of technical and legal issues relating to the possible inclusion of aviation in the scheme’. The ICAO meeting in October 2004 further embraced market‐based measures and decided to work on guidelines for voluntary implementation at state level (ICAO 2004). At the same time, the Council of the European Union reiterated its invitation to the European 9
Commission to make proposals in 2005 ‘without precluding any market‐based options’. Moreover, it said that it ‘looks forward to the study by the Commission on addressing the climate change impacts of aviation through the EU emissions trading scheme’ (Council of the European Union 2004b). Following this invitation, the European Commission requested consultants CE Delft to perform a study with the objective to develop concepts to include aviation in the EU Emissions Trading Scheme in November 2004 (CE Delft 2005). An official announcement of the European Commission’s intentions to put forward a regulatory proposal was made in January 2005 when its overarching annual work programme was launched (European Commission 2005a). Listed as one of the proposals to be adopted under the work programme was the issue of aviation and global warming: ‘The Communication will suggest an approach and set out options for economic instruments to reduce the climate change impact of aviation’. The announcement triggered intense lobbying activities towards the European Commission (Interview A 2006). The EU’s commitment to include aviation in EU climate policy was stressed in a climate change Communication in February 2005 (European Commission 2005b). It emphasised the objective to include more policy areas in the existing climate policy framework and ‘in particular, the fast growing emissions from aviation and maritime transport’. The transport sector, including aviation, was recommended to be devoted particular attention in the new phase of the European Climate Change Programme. To kick‐start the policy process of preparing a Communication to recommend an economic instrument to tackle aviation’s climate change impact, DG Environment arranged a public consultation which was open between 11 March to 6 May 2005 (European Commission 2005c). The invitation was open to individuals as well as organisations who were asked to provide their views on a number of issues relating to a such policy. Two separate questionnaires, designed for individuals and organisations respectively, were available online. The informal lobbying activities towards the European Commission continued throughout 2005 (Interview A 2006, Interview B 2006). Officials experienced frequent lobbying by governments, individual companies, NGOs and business associations. Particularly frequent contacts were initiated by the UK government and companies and associations representing the UK aviation industry who argued strongly for emissions 10
trading. Throughout the entire process, they asked for meetings, wrote letters and pressured the entire hierarchy including managers of the Commission and Commissioners. The CE Delft report with the aim to investigate the feasibility of emissions trading for aviation was launched in 2005 and concluded an optimistic picture of emissions trading by saying that the introduction of emissions trading for the aviation sector did not appear to pose many challenges that had not arisen in the context of the existing EU ETS (CE Delft 2005). It proposed emissions trading to be a policy option that could be considered alongside other policy instruments to tackle the climate change impacts of aviation. Following the stakeholder consultation, aviation was devoted one full day of attention during the annual EU Green Week on 1 June 2005. This event was open to the public and gathered key stakeholders as well as concerned individuals. Preliminary results from the stakeholder consultation were presented (Ladefoged 2005). It concluded that the responses to the stakeholder consultation did not show a consistent answer as to what policy option to prefer. Emissions trading was the preferred instrument by the aviation industry whereas fuel taxation was preferred by most other organisations including NGOs. The largest single fraction of respondents was NGOs and consequently the majority of respondents wanted to see aircraft fuel being taxed. The second most popular alternative among all respondents was emissions trading followed by en‐route charges or taxes (European Commission 2005c). In July 2005, six business associations representing the European aviation industry presented a joint climate change position to the European Commission (AEA et al 2005). One official in the European Commission commented it to be a reasonable and constructive proposal (Interview B 2006) and it was fed into the process of preparing the Communication. The position paper sets out the industry’s emissions containment policy building on four pillars: technological progress, infrastructure improvements, operational measures and economic instruments. Emissions trading is clearly favoured compared to other economic instruments as the industry recognises that ‘work within ICAO has shown that emissions trading is potentially the most environmentally effective and cost‐efficient approach to address CO2 emissions from aviation and, as a consequence, it appears to be a more promising option than taxes and charges’. However, they emphasise the need to resolve a number of design issues before a practical proposition is announced. 11
When the Commission adopted its Communication on 27 September 2005 it concluded that ‘the inclusion of aviation in the EU ETS appears to be the most promising way forward’ (European Commission 2005d). In its accompanying press release, Vice President and Commissioner for Transport Jacques Barrot added that: ‘there is a growing consensus in the aviation sector that emissions trading represents the best way forward to cut greenhouse gas emissions’ (European Union 2005). The recommendation was officially underpinned by the stakeholder consultations and the CE Delft impact assessment (European Commission 2005d). Emissions trading was hereby put at the heart of an EU policy to tackle the climate change impact of aviation although seen as part of a comprehensive approach that includes research into cleaner air transport, better air traffic management and the removal of legal barriers to taxing aircraft fuel. The September 2005 Communication marked the beginning of a bureaucratic process in which the proposal for emissions trading was further developed. The European Commission invited the European Parliament and the Council of the European Union to give detailed responses to the Communication. In parallel, the Commission set up an aviation working group consisting of invited stakeholders to consider certain issues in more detail. In December 2006, the European Commission adopted a proposal for legislation to include aviation into the EU ETS, prescribing airlines to begin to trade with emission rights from the start of 2011 (European Commission 2006). As illustrated in this section, several factors may have played a role for the European Commission’s choice of recommending emissions trading to be the cornerstone of an aviation climate policy. The data indicates that the European Commission was receptive to external influences throughout the process and that the dialogue with the industry was extensive. With their emissions containment policy, the aviation industry brought forward a united support for emissions trading. In order to address issues of institution building in the transnational sphere, I argue that we need to examine how positions in favour for emissions trading were formed. In the next section, I shift level of analysis to describe how a position was being shaped within the business associations of the European aviation industry. 12
The Development of a Joint Industry Position for Emissions Trading An important channel for an industry to bring forward their opinions to the EU is through business associations. The European aviation industry is represented by several business associations based in Brussels. Their aim is to defend the interest of their members and influence the regulatory framework at EU level. These associations represent companies throughout the aviation sector, including airlines of various business models and airports. There is a continuous dialogue between these associations on issues that concern the sector as a whole. In 2005, six associations representing the European aviation industry presented an emissions containment policy to the European Commission which clearly articulates the industry’s support for emissions trading. In this section, I direct attention to how a pro‐
emissions trading position was formulated within and across these associations. The data builds on interviews with three of these associations, press releases and position papers. Following confidentiality agreements, all organisations and interviewees have been treated as anonymous. Although a number of representatives of the aviation industry had actively participated in the climate change debate since the late 1990s, the political signals of the upcoming UK Presidency and the European Commission’s work programme for 2005 clearly intensified actions among the business associations. Alfa noticed an increasing pressure for action on climate change in 2004 (Interview Alfa 2006). Association officials sensed a growing debate in meetings and in the media where the UK government announced its intentions to push for emissions trading and British‐based company Zeta argued strongly for it. Business association Beta made climate change a top priority after being informed about the UK government’s objective to address aviation’s climate change impact during their EU Presidency. The British members of Beta were lobbying hard for emissions trading, building their argument cost‐effectiveness and flexibility and the positive experience that member company Zeta had gained in the national UK emissions trading scheme (Interview Alfa 2005). Business association Delta announced a draft climate change policy in January 2005 which spoke clearly in favour of emissions trading. This position was the outcome of a voting procedure requiring support from all members. The need to come forward with a climate change position had been initiated by British member company Epsilon who from the 13
start had argued for emissions trading (Interview Epsilon 2007). One or two members immediately joined Epsilon in its support for emissions trading whereas one member did not agree until several other members had put pressure on them. Beta was aware of the other business associations investigating the options for a position on climate change and suggested to formulate a joint industry position (Interview Beta 2006). A call for volunteers to set up a think tank on climate change went out across the six associations. At this point in time, the associations and their member companies were in different stages of drafting a position on climate change (Interview Beta 2005; Interview Gamma 2006). The think tank studied the possible options and educated each other to bring everyone to the same level to make sure that everyone agreed on the content of the position. None of the six associations responded to the European Commission’s stakeholder consultation with reference to the formalised format of the questionnaire (Interview Beta 2005). Instead, they aimed for a position in which they could describe their view in their own words. The six associations committed to a joint industry position met every other month to discuss the economic instruments available. Although there were other options besides economic instruments, they immediately felt that the focus of the debate was going to be one of the three economic instruments and that a legitimate position would need to support one of them (Interview Alfa 2006). At first, there were some difficulties to agree across the industry. Everyone in the think tank agreed that taxes were out of the question since it would retract money from the sector. Charges were said to be difficult for two main reasons: member states would probably implement them in different way and there were no guarantees that the funds were going to be spent to benefit the environment. Emissions trading was an unknown concept to many member companies and the many uncertain elements in the design of an emissions trading scheme gave rise to widespread scepticism. A clear distinction could be distinguished between companies who were in favour of emissions trading and those who were not. Small airlines were concerned about the administrative costs in managing such trading whereas several big airlines were generally more advanced in environmental issues and less sceptical towards emissions trading. In particular, Beta member company Zeta was very enthusiastic about the idea of emissions trading (Interview Alfa 2005, Interview Beta 2006, Interview Gamma 2006, Interview A 2005, Interview B 2005). Eventually, the 14
associations agreed that emissions trading was the best alternative among the three economic instruments due to its flexibility and cost effectiveness. Business association Gamma signed up to the joint position promoting emissions trading. However, Gamma never took an official position on whether emissions trading was a better option than charges at the EU level (Interview Gamma 2006). ‘It seemed like emissions trading had already been chosen by the European Commission with the launch of the Communication in the fall of 2005. The Communication included a number of decisions that were in favour for emissions trading. We departed from that position when we started working on emissions trading’. Following the 2005 Communication, several other business associations and individual companies endorsed the concept of emissions trading. For example, business association Omega endorsed an industry strategy for climate change in December 2005 where emissions trading was stated as a preferred option together with voluntary agreements. DISCUSSION AND CONCLUSIONS This paper has illustrated transnational governance mechanisms throughout the process of developing a climate change policy for aviation. More specifically, it has pointed to influential events and actors that preceded the European Commission’s proposal of including the aviation industry into the EU Emission Trading Scheme. I argue that transnational processes matter and that EU policymaking need to be understood in a broad context. Contemporary regulation is not developed by policymakers in isolation, but as this paper has shown, the debate can to a large extent be driven by and in interaction with stakeholders at different levels. However, the fragmentised responses to the official stakeholder consultation suggest that we need to look beyond official stakeholder consultations to identify mechanisms in which support for emissions trading was formulated. There is seldom one simple explanation to why a policy is being chosen and many actors play a role in shaping the debate. This paper has highlighted several factors affecting the European Commission’s proposal of emissions trading for the aviation industry. First of all, the inclusion of stakeholders in the analysis does not imply a disappearance of states and 15
EU policymakers. The EU institutions themselves, in particular the Council of the European Union who repeatedly called for action and the European Commission who developed the legislative proposal, obviously played an important role. Moreover, ICAO’s slow progress in the matter and its positive statements of the potential of emissions trading was a crucial argument for the proposal. Consultants CE Delft performed a number of background studies which were fed directly into the policy process. The parallel set up of an EU‐wide emissions trading scheme for a number of other energy‐intensive sectors facilitated the idea of integrating aviation into an existing centrepiece of EU climate policy. Serious obstacles for taxation on international flights hindered a tax proposal and parties failed to agree on a voluntary deal. Although all of these things influenced the choice of proposing emissions trading for aviation, I have directed particular attention to how positions for emissions trading were formed within the European aviation industry for a more illustrative example of institution building and its origin. Transnational processes may have different origins but as shown in this paper, governance activity can be embedded in national structures. One striking feature in this case study is the role of a particular country. A number of British actors from industry and government seem to have had a particularly strong influence on the regulatory outcome. These influences became apparent through different channels: directly to policymakers, though speeches and media coverage and through business associations. The results pointing to the British influence suggest that not only do regulatory processes span boundaries but there may be intensifying mechanisms from a certain context. These results of national origins in transnational regulatory processes deserve closer attention as it raises questions about triggering factors in a national context. This is subject to ongoing research. 16
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Exemptions or Reductions Possible for Navigation on Inland Waterways Other than for Private Pleasure Craft as set out in Articles 8(1)(B) and 8(2)(B) of the same Directive, Brussels, 14 November 1996 European Commission (1999) Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions: Air Transport and the Environment: Towards meeting the Challenges of Sustainable Development, COM*1999(640), Brussels, 1 December 1999
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