New Policy, New Interest Group Politics? Policy Feedback, Interest Representation, and the EU Emissions Trading System

A growing literature in political science has demonstrated that public policies, once adopted, can actively influence subsequent political processes of policy adjustment. This phenomenon – known as policy feedback – has been increasingly studied in EU environmental policy (Jordan and Matt, 2014; Skogstad, 2016). The policy feedback literature places emphasis on feedback effects on interest groups and argues for long-term analysis of interest group engagement and an increased focus on changes over time (Pierson, 1993; Campbell, 2003). This paper contributes to both the interest representation and policy feedback literatures by undertaking a longitudinal study of the evolution of interest group engagement in a long-running EU climate change policy: the EU Emissions Trading System (EU ETS). It focuses on the effect that emissions trading had on interest representation through its distributional effects. It uses process tracing to examine the interactions between the EU ETS and the interest groups which engage in policy making around it. To do so, it draws on a database on all interest groups who publicly stated positions in 16 ETS-related European Commission consultations between 2000 and 2016, and positions that key groups took on ETS reform over this period. It finds that resource distribution through allowance allocation drew in industries in sectors covered by the ETS, as well as those that indirectly benefitted from the ETS’s operation such as the financial industry. Over the period, the number of organizations increased rapidly. However, these changes were uneven, with the energy-intensive industries such as steel increasingly engaged throughout the period, while others such as the financial industry and environmental NGOs disengaged toward the end of the period. Changes in the policy design of the ETS led to changes in the patterns of engagement of interest groups, with new coalitions forming to protect design elements that were originally seen as temporary.