Scales and networks of neoliberal climate governance: the regulatory and territorial logics of European Union emissions trading



The growing influence of neoliberal approaches to environmental governance has significantly increased the involvement of industry non-state actors in international and national climate governance. However, the implications of this neoliberalisation and hybridisation of climate governance, and particularly state–industry relations during these processes, remain under-integrated with wider geographical debates on the scalar and network politics of environmental governance. In this paper, we probe these issues by examining the regulatory and territorial logics underpinning the negotiation and implementation of the European Union emissions trading scheme (EU ETS). We argue that overlapping interpretations of the regulatory logic of emissions trading (as a cost-effective means of meeting climate objectives) by EU, state and industry actors provided the driving force for the creation of a Europeanised climate governance space and the consolidation of the EU’s governing authority in respect of the formal rule-making elements of the EU ETS. However, alliances between state and industry actors, based around intersecting interpretations of their territorial interests in relation to emissions trading, strongly influenced the scheme’s design. Moreover, speculative behaviour within the EU ETS market indicates the continued ability of market networks to disrupt territorially-based climate governance regimes. We argue that critical exploration of the territorial logics and practices of EU emissions trading from regime creation to operation provides new insights into the emerging spatial politics of neoliberal environmental governance and its implications for climate protection.