The Legal and Institutional Framework for a Plurilateral Greenhouse Gas Emmissions Trading System
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Description
This paper discusses the legal and institutional issues presented by the development of a plurilateral greenhouse gas (GHG) emissions trading system in which participating countries that have adopted domestic trading systems mutually recognize emissions allowances or credits generated by each other’s domestic systems, providing the basis for the emergence of an international trading system. This plurilateral approach deserves serious consideration. The Kyoto process for reaching agreement on a single set of global arrangements for international GHG emissions trading is encountering difficulties. Denmark has already adopted a limited domestic CO2 emissions trading system and other countries, including the United Kingdom, Australia, Sweden, and Argentina are either in the process of adopting domestic CO2 or GHG emissions trading system or are seriously considering their adoption. The European Commission has endorsed a proposal to commence emissions trading within the European Union beginning in 2005 as a part of the European Climate Change Programme. While effective controls on GHG will eventually require comprehensive global arrangements, the plurilateral approach can represent an important step in building such arrangements. Part II of the paper summarizes the advantages of emissions trading systems at both the domestic and the international levels, including the advantages of their use to limit GHG emissions. Part III discusses the concept and potential evolution of a plurilateral GHG emissions trading system. Part IV reviews experience to with domestic emissions trading systems. Part V analyses the essential legal and institutional elements of a successful international emissions trading system. Part VI analyses how the designs of the domestic trading systems of countries participating in a plurilateral GHG emissions trading system might be coordinated or harmonized in order to support the successful development of such a system while allowing for appropriate variations to address national circumstances. Part VII briefly reviews issues of the compatibility of a plurilateral trading system with international law. A brief conclusion follows.
Source Publication
Greenhouse Gas Market Perspectives: Trade and Investment Implications of the Climate Change Regime: Recent Research on Instiutional and Economic Aspects of Carbon Trading
Publication Date
2001
Recommended Citation
Stewart, Richard B. and Sands, Philippe, "The Legal and Institutional Framework for a Plurilateral Greenhouse Gas Emmissions Trading System" (2001). Faculty Chapters. 1696.
https://gretchen.law.nyu.edu/fac-chapt/1696
