The European Union has been described as a vertically and horizontally differentiated system of integration, with individual policy sectors varying in terms of centralization and territorial extent. In this paper, I argue that individual policy instruments can also be subject to differentiated decision-making taking place at multiple levels and involving a diverse set of political institutions. A high-profile example of a EU policy instrument with a differentiated system of decision-making is the EU Emissions Trading System (EU ETS), the cornerstone of the EU's efforts to reduce the greenhouse gas emissions that cause climate change. By analysing primary documents and drawing on the existing literature on EU climate policy, I explore the EU ETS's decision-making system and show that decisions on individual policy elements have been taken at both the EU and member state levels. In addition, EU ETS decision-making in Brussels is itself differentiated, with decisions being taken by both the European Council and through the Ordinary Legislative Procedure. Finally, I preliminarily examine differentiated decision-making in practice through a case study of recent EU ETS policy-making from 2012-2015.
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