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The European Union (EU) is widely assumed to be a global environmental leader, especially in addressing climate change, though this reputation suffered greatly when European leaders were sidelined during the 2009 United Nations Climate Summit in Copenhagen. Subsequently, however, the EU has made significant progress in extending its Emission Trading System to the aviation sector, one of the fastest-growing sources of greenhouse gas emissions, and did so not only regionally, but also managed to get it onto the global policy agenda. This contribution investigates the EU's role in shaping the 2013 International Civil Aviation Organization (ICAO) resolution committing 191 government signatories to developing a global market-based measure to cap international aviation's carbon pollution. While not exactly setting new environmental standards or achieving definitive regulatory success, the case illustrates the agenda-setting capacity of the EU through leveraging its market power and adopting an explicitly extra-territorial rule to induce potential regulatory co-operation. [ABSTRACT FROM AUTHOR]

The European Union's Emissions Trading Scheme (EU ETS) is so far the largest emissions trading system in the world. A rigorousex postempirical analysis of the scheme is presented. The effect of the scheme on firms' investment decisions in carbon-reducing technologies is analysed by using detailed firm-level data from Swedish industry. Based on difference-in-difference estimation as well as a before–after difference estimation, the results reveal that the EU ETS has not had a significant effect on firms’ decisions to invest in carbon-mitigating technologies. However, although the EU ETS appears to have no direct effect on investments, it is too early to dismiss the system. Consideration is given to how the EU ETS can realize its potential to become an effective tool in the EU climate and energy policy portfolio. [ABSTRACT FROM PUBLISHER]