Institutionalisation of climate policy and carbon markets in the Paris-era

Paris Agreement demands a fast and radical change in institutions. It suggests parties to set net-zero goal by 2050. Many have investigated the economic and technological prospects and feasibility of climate actions to reach the Paris goal. However, there is limited attention to the change of social and political dimensions, which is an essential aspect to drive low carbon transformation. The thesis investigated how the institutions of climate policy and carbon markets changed from Kyoto to the Paris period, and evaluated to what extent the climate policy and carbon market is institutionalised to reach the ambitious Paris goal. Seeing climate policy and carbon markets as socially constructed, which changes through structure-agency interaction, I analysed discourses of policy actors from comprehensive sets of documents and 40 interviews. Based on Discursive Institutionalism, I discovered how the global climate policy and carbon markets changed. I found an incremental change in institutions due to a crash in ideas and powers despite the rise of actors and discourse around climate emergency after the Paris Agreement. Reflecting the change and bounded by broader economic and political context, the global carbon markets became fragmented. Although linking is ideal, Emissions Trading Schemes (ETS) grew heterogeneously and evolved differently due to national institutional environments . In terms of institutional complementarity, South Korean ETS adapted to become regulatory due to its strong state model with incomplete energy market liberalisation while EU ETS is a carbon market that complements its established institutions of decentralised political structure and energy liberalisation. I adopted Historical Institutionalism to view South Korea's net-zero target setting process as that of a transitioning country. Although the change of presidency and majoritarian politics enabled the 2050 net-zero target setting, however, the long-term strategy to achieve a low carbon society is not institutionalised due to the incumbent powers that embrace economic development with low social acceptance. In the thesis, I found a gap between what Paris Agreement calls for, and what is institutionalised in practice. The reality of climate policy and the carbon market shows that institutions only change incrementally in both global and national levels to a point where it does not reach the speed and degree of climate emergency. The cases show the power collision between the economic competitiveness debate and the climate emergency frame, and shed light on how the climate policy can be restricted by the institutional power. From the Kyoto period, carbon markets remain as the compromise of power struggles, however, it has a limited role to bring radical change. More attention is needed to seek how climate policy and carbon markets can become socially legitimate, overcoming the conflicts with incumbent policy networks and their powers, which can lead to the institutionalisation to a low carbon society in the Paris-era.