Emissions trading at Kyoto: From EU resistance to union innovation

The Kyoto summit witnessed vigorous EU-US disagreements over a new environmental policy instrument (NEPI)-an emissions trading system. This NEPI was promoted by the US and opposed by the EU. Unlike the US, after Kyoto, the EU surprisingly switched from resisting the NEPI to designing in earnest a domestic emissions trading system. This transition from resistance to policy innovation is best explained as a process of policy transfer. The current study identifies the important role of domestic policy paradigms for both shaping the formation of national interests in international arenas and determining the contours of the process of policy transfer.