Sustaining Climate Policy Reforms: A Tale of Two Reforms

In July 2014, Australia abolished its Carbon Pricing Mechanism (CPM) that commenced in July 2012. By contrast, the EU Emissions Trading Scheme (EU ETS) has been up and running for a decade. Despite facing several challenges over the years, the EU ETS is set to continue for the foreseeable future. The aim of this paper is to explain why the EU ETS has proved durable while the Australian CPM was abandoned after barely two years of operation. We analyse this focusing on the role of ideological polarisation over climate politics as well as the role/design of the policy instrument, particularly the degree to which the respective schemes are adhesive and/or flexible. Our conclusion is that the two schemes started from an almost opposite political setting, leading to a sharp divergence both in interest groups’ feedback and in the efficacy of the respective schemes’ instruments of adhesion and flexibility.