This chapter examines the deeper theoretical motivations and foundations for the studies, along with the methodology that has guided the author's research. It defines the author's dependent variable: the design of emissions trading systems (ETS). The chapter also examines the key explanatory variables – the forces that explain convergence and divergence in ETS design. It starts by examining diffusion mechanisms and the relationship between these mechanisms and policy outcomes. The chapter presents some alternative explanations to policy diffusion as a causal driving mechanism and discusses the interplay between emissions trading and other policy instruments. It also presents methodological issues, case selection and empirical coverage. The chapter also discusses how domestic political factors operate as intervening variables. It describes with broad sets of domestic political factors for explaining both policy convergence and divergence as possible outcomes of diffusion processes. The intellectual process leading actors to such convergence may be labelled 'parallel play'.