Examining Influences of EU Policy on Instrument Choice: The Selection of a Green Certificate Trading Scheme in Sweden

This paper explores the circumstances of the Swedish selection of an obligatory green certificate trading scheme over other policy instruments. The choice of policy instruments in the energy policy area is bound to the international context and in Europe to the European Union (EU). The aim of this paper is to examine the relative influences of European policies on the selection of certificate trading for stimulation of renewable electricity production. The paper turns to the ideas of Europeanisation to analyse influences from European policy on domestic instrument choice process. The empirical findings confirm the Europeanisation theories which suggest that European policies can affect domestic policy changes despite lack of prescribed measures. The study shows that the EU guidelines on state aid invoked a need to change support scheme, together with domestic factors: a programme coming to an end, a policy commitment to increase the share of new, renewable electricity production and budget restrictions. EU policies strengthened existing preferences for a market-based support scheme and influenced the dominant actors' expectations about the future, providing additional justification of their instrument preferences. On the whole, this paper illustrates how the notion in economic theory to make use of the market for resource management has proliferated strongly in Swedish energy policy making.