Instrumentalising property : an analysis of rights in the EU emissions trading system

• Main Author: Manea, Sabina
• Published: London School of Economics and Political Science (University of London) 2013
• Subjects: 363.738; K Law (General)
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.579480

The thesis examines the nature of the legal interests in emissions allowances (emissions entitlements), the tradable instruments created by the European Union Emissions Trading System (EU ETS). The potential categorisation of emissions entitlements as private property impacts significantly on the environmental success of the EU ETS and, more widely, on the conceptualisation and functionality of property rights. The current silence of the EU ETS on the nature of the entitlements has caused problems in the emissions market, as illustrated by a case study and an analysis of the commercial contracts constituting this market. In turn, the public policy goals of the EU ETS depend on the success of the private market. The thesis puts forward an analytical framework designed to articulate a construction of emissions entitlements that reconciles the multiple and potentially conflicting goals of the regime. The framework consists of two parts. The first part examines legal theories of property and establishes that the elements required to constitute a property right are exclusion, transfer and use. The second part examines three legislatively created rights regimes, namely intellectual property rights, milk quotas and spectrum rights, which are compared to emissions entitlements from the viewpoint of the identified requisite elements. This exercise further reveals instructive insights into the evolutionary nature of property rights in a regulatory environment. For private property to act as an effective tool of regulation, it needs to be specifically conceptualised as instrumental property, a new category which is put forward by the thesis. The notion of instrumental property is defined by the public policy goals of the regulatory regime and also by the particular context in which the rights operate. Instrumental property must necessarily be balanced against extraneous public or private interests which the law regards as deserving of protection.