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Abstract

The European Union’s Emissions Trading System (ETS) stands as a model for managing a changing climate in a complicated international environment. As it enters its Phase III period of auctioning emissions permits, an understanding of players and their performance is essential to evaluating the success of the emissions market. Concerns that wealthy countries will purchase permits, rather than reduce their real emissions, have led to skepticism about the system’s potential for success. In this study, I examine ambition exhibited by countries in using less than maximum allowable levels of offsets to achieve Phase II reduction requirements. Using fuzzy-set Qualitative Comparative Analysis, I explore a number of variables including economic growth, Green Party representation, public opinion, and renewable energy investment to construct a model explaining variety in exhibited ambition among ETS countries. Results show that renewable energy and public opinion play the most significant role in explaining a country’s use of offsets.

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