Competence allocation and regulatory functioning: a study of the European Union Emissions Trading Scheme

This dissertation aims to show that the explicit recognition of the role of distinct competences in the regulatory process will bring existing theories of federalism, closer in line with regulatory reality. The regulation of the causes and effects of climate change takes places over many different levels of governance. In some situations, one regulator is responsible for the entire regulatory process. It is however increasingly common that these regulatory competences are allocated at different levels of governance. The allocation of competences affects the functioning of the regulatory system. The theoretical framework developed is applied to a study of the European Union Emissions Trading Scheme (EU ETS), which is aimed at the mitigation of greenhouse gases through emissions trading. The deviations from the theoretically optimal allocation in the trading phases of the EU ETS can explain some of the difficulties in the earlier trading phases. In turn, these deviations can be explained by the political economy of the EU ETS, which shows that optimal allocation is hard to achieve during the foundation of a new regulatory regime due to the relative strength of certain stakeholders in the political process.