Creating, Regulating and Allocating Rights to Offset and Pollute: Carbon Rights in Practice
© Lexxion Verlagsgesellschaft mbH (9/2016)
The adoption and entering into force of the Paris Agreement is a welcome occasion to re-assess the legal foundations of emissions trading and, in particular, the nature of ‘carbon rights’. Cap-and-trade (‘allowances’) and baseline-and-credit (‘credits’) represent the main Emission trading approaches, the former imposing compliance obligations, the latter stipulating voluntary action to reduce and monetize emissions. Each approach comes with legal characteristics and raises legal questions concerning property rights and protection, taxation, and financial regulation, on the one hand, and the proper recognition of individual mitigation efforts (in the context of environmental services) and participation rights, on the other hand. This article places the different type of rights in the context of their creation, purpose, and function.

Carbon Leakage, Free Allocation and Linking Emissions Trading Schemes
© Lexxion Verlagsgesellschaft mbH (6/2014)
A sub-global emissions trading scheme (ETS) risks harming competitiveness and causing carbon leakage. These concerns cast doubt on the efficiency and environmental effectiveness of unilateral climate policies. ETSs implemented thus far include measures to address competitiveness and leakage concerns.

Emissions Trading in the US: Work in Progress on the Federal Level?
© Lexxion Verlagsgesellschaft mbH (9/2013)
Emission trading has been used as a policy instrument for certain non-greenhouse gases in the United States on the federal administrative level for years. Yet, discussions on the use of market based instruments to regulate greenhouse gas emissions on the federal level have not resulted in national policies. Following new commitments in a Climate Action Plan (CAP), the Obama Administration and the Environmental Protection Agency (EPA) could be about to put a differentiated regulatory framework in place.

Making Sense of Carbon Market Development in China
© Lexxion Verlagsgesellschaft mbH (9/2013)
China has recently begun promoting market-oriented policy instruments to reduce carbon emissions as part of its domestic climate strategy. A centerpiece of this new policy approach has been the launch of pilot carbon markets in seven distinct regions. Based on extensive field visits to all pilot markets under development, this analysis assesses the implications of this “bottom-up” approach to carbon market development for the prospects for nationwide carbon trading in China. It concludes that initiating carbon trading in the seven regions across China with insufficient capacity building, an extremely compressed time frame, and little bureaucratic coordination has engendered challenges for the development of a national carbon market. Nevertheless, these pilots have advanced the prospects for sustained climate action in China at the local Level through their contribution to indigenous technical and human capacity as well as through engaging new stakeholders, including domestic and international actors, supportive of the development of an eventual national trading scheme.

Emissions Trading in Kazakhstan: Challenges and Issues of Developing an Emissions Trading Scheme
© Lexxion Verlagsgesellschaft mbH (4/2013)
The meme for carbon markets in 2013 is the increased utilisation of domestic emissions trading as a primary policy tool across a broad spectrum of UNFCCC Parties. Previous issues of the CCLR have addressed developments in China, South Korea, Japan and other jurisdictions. In this issue of “In the Market”, we will briefly review how Kazakhstan is implementing its emissions trading scheme and the implications of this scheme for the wider region. This article is based on a Workshop sponsored by the European Bank of Reconstruction and Development held in Astana on 20 June 2013, at which both the authors were present.

Climate Change Mitigation from the Bottom Up: Using Preferential Trade Agreements to Promote Climate Change Mitigation
© Lexxion Verlagsgesellschaft mbH (4/2013)
This paper proposes the introduction of a regional model for promoting climate change mitigation as an alternative to the present structure of the United Nations Framework Convention on Climate Change (UNFCCC)/Kyoto Protocol framework. Given the proliferation of preferential trade agreements (PTAs) – especially in the form of bilateral treaties – in the international trading system, this paper advocates creating PTAs with strong climate change chapters, thus embedding climate goals within bilateral/trilateral/plurilateral trade agreements. Involving major greenhouse gas (GHG) emitters through PTAs which include climate chapters can be an effective avenue towards reducing GHG emissions, and could therefore facilitate the ultimate goal of creating an effective global climate regime. This option may therefore be worth exploring.

Fostering REDD+ Investment Through Effective Legal Frameworks: Lessons From the Development of Early Forest Carbon Projects
© Lexxion Verlagsgesellschaft mbH (4/2013)
Forest carbon projects have been developed under the Clean Development Mechanism (CDM), the voluntary market and other domestic schemes. These projects provide insight into the practical challenges for REDD+ implementation with respect to defining rights to carbon, ensuring the permanence of REDD+ areas, and creating “investment-grade” carbon commodities which are capable of attracting private sector finance. Given that private sector finance will be necessary to scale-up REDD+ implementation, insight regarding the legal frameworks required to support private sector investment is valuable. This paper does not seek to advocate for either a market-based or projectlevel approach to REDD+ implementation, but draws on practical experience with early forest carbon projects to explore how legal frameworks for REDD+ can encourage private sector Investment.

Designing the Regulatory Framework of an Emissions Trading Programme in China: Lessons from Tianjin
© Lexxion Verlagsgesellschaft mbH (12/2012)
The goal of this article is to examine the underlying considerations of designing and establishing the regulatory framework of an emissions trading program in China after the National Development and Reform Commission initiated the emissions trading pilots in seven provinces and cities in 2011. The article provides the policy development context and discusses the findings through empirical work on the design features of an emissions trading program in Tianjin. The underlying considerations and constraints are analyzed as followed to set the basis for further research into the regulatory design of an emissions trading program in China.

Emissions Trading around the World: Dynamic Progress in Developed and Developing Countries
© Lexxion Verlagsgesellschaft mbH (12/2012)
Drawing on a series of forthcoming case studies developed under a joint project of the Environmental Defense Fund (EDF) and the International Emissions Trading Association (IETA), this article conveys the dynamic bottom-up progress on emissions trading systems (ETS) around the world. The case studies will provide an easily accessible tool that facilitates the analysis of ETS based on examples from existing and developing policies. Each of the 18 case studies provides an overview of the history on climate action within the specified jurisdiction, highlights ongoing challenges and unique features, and describes key ETS elements. The jurisdictions of focus lie within both developed and developing parts of the world, and the set of case studies encompasses multinational-, national-, regional-, state/provincial-, and city-scale jurisdictions. This article summarizes the key design features and differentiating aspects of ETS development in each jurisdiction. While designs vary, each ETS described ultimately belongs to the same category of quantity-based market mechanism.

Market-based Instruments for Greenhouse Gas Mitigation in Brazil: Experiences and Prospects
© Lexxion Verlagsgesellschaft mbH (12/2012)
Brazil has become an increasingly important participant in the discussion about climate change, combining an active role in climate diplomacy with credible domestic policy efforts. Market-based instruments have featured prominently in its domestic policy landscape, with carbon markets envisioned both at the federal and regional level. Aside from successful participation in the Clean Development Mechanism (CDM) and some progress in the creation of voluntary offset markets, however, the pathway towards a domestic carbon market has so far been fraught by delays and ongoing uncertainty. Still, Brazil can build on proven institutional structures, quantified emissions limitation targets, and new rules on the collection of emissions data and sectoral mitigation plans to establish robust market-based instruments. A carbon market can help leverage its vast mitigation potential to abate greenhouse gas emissions at sufficient scale while limiting the cost of compliance for domestic entities. Given its unique emissions profile, however, Brazil should not focus on becoming a net seller of carbon credits or allowances to foreign entities, but should instead harness the opportunity to create an ambitious, welldesigned market and thereby become a leader on climate change mitigation in Latin America.

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