Title Emissions Trading Design : a Critical Overview / Stefan E. Weishaar

Published Cheltenham ; Northampton, MA : Edward Elgar Publishing, 2014

Table of Contents
	List of abbreviations					xii
	Table of cases					xv
1.	Introduction					1
1.	Relevance of emissions trading					1
2.	History of emissions trading					2
3.	Aspects of emissions trading design					5
4.	Purpose of the book					6
5.	Acknowledgements					8
2.	Emissions trading and alternative instruments					10
1.	Introduction					10
2.	Command and control versus economic incentive-based or market-based instruments					12
2.1.	Weaknesses of command and control					12
3.	Environmental liability as an incentive-based instrument					14
3.1.	Environmental liability versus regulation					17
4.	Environmental taxation					21
5.	Emissions trading					23
5.1.	Advantages of emissions trading					24
5.2.	Critical issues					25
6.	Concluding remarks					27
3.	Design variants of emissions trading					30
1.	Introduction					30
2.	Policy context					31
2.1.	Political factors					32
2.2.	Economic factors					35
2.3.	Social factors					38
2.4.	Conclusion					38
3.	Policy objectives					39
3.1.	Environmental effectiveness					40
3.2.	Cost effectiveness (lowest abatement costs)					41
3.3.	Raising government income					42
3.4.	Economic growth					43
3.5.	Investment incentives					46
3.6.	Summary					48
4.	Design choices					48
4.1.	Participation and coverage					49
4.2.	Target setting					53
4.3.	Cap-and-trade, credit trading and intensity targets					55
4.4.	Monitoring, reporting and verification					57
4.5.	Energy-intensive trade-exposed industries					57
4.6.	Allocation rules					58
4.7.	Closure rules, transfer rules, ex post adjustment					59
4.8.	Linking					60
4.9.	Flexibility measures					61
4.10.	The secondary market					64
5.	Conclusion					64
4.	Real-life applications of emissions trading systems					66
1.	Introduction					66
2.	Europe					67
2.1.	European Union Emissions Trading System					67
2.2.	Swiss Emissions Trading Scheme					72
3.	North America					74
3.1.	United States Sulphur Dioxide Cap-and-Trade Programme					74
3.2.	Regional Greenhouse Gas Initiative					75
3.3.	Western Climate Initiative					77
3.4.	Midwestern Greenhouse Gas Reduction Accord					82
4.	Australia and New Zealand					82
4.1.	Australian Carbon Pricing Mechanism					82
4.2.	New Zealand Emissions Trading Scheme					85
5.	Asia					87
5.1.	Japan					87
5.2.	China's emissions trading systems					89
6.	Conclusions					96
5.	Implementation issue 1: Initial allocation of emission rights					99
1.	Introduction					99
2.	Setting the emissions cap					100
2.1.	Over-allocation					100
2.2.	Options to tackle over-allocation					104
3.	Free allocation of emission rights					106
3.1.	Free allocation under an emissions cap					106
3.2.	Free allocation under a credit-and-trade system					107
3.3.	Windfall profits					109
3.4.	Options for tackling windfall profits					111
4.	Auctioning of emission rights					113
4.1.	Advantages of allowance auctioning					113
4.2.	Examples of allowance auctions					114
4.3.	Allowance auction design					115
5.	Lobbying for more or cheaper emission rights					118
5.1.	Lobbying and inefficiencies					119
5.2.	Lobbying in the European Union ETS					119
6.	Conclusion					124
6.	Implementation issue 2: The secondary market for emission rights					125
1.	Introduction					125
2.	Spot market and manipulation					126
2.1.	Action-based manipulation					128
2.2.	Information-based manipulation					130
2.3.	Trade-based manipulation					131
2.4.	Concluding remarks					131
3.	Auctioning and manipulation					132
3.1.	Market manipulation and auction design					133
3.2.	Auction regulation and market manipulation					135
3.3.	Concluding remarks					141
4.	Documented market irregularities					141
4.1.	VAT fraud					142
4.2.	Theft					143
4.3.	Nation state creativity					143
4.4.	Concluding remarks					144
5.	Conclusion					145
7.	Implementation issue 3: Operational aspects of emission rights					147
1.	Introduction					147
2.	Monitoring, reporting and verification					147
3.	Working of the market (the case of state-owned enterprises)					150
4.	Transaction logs					151
4.1.	Information security and privacy					156
4.2.	Research on allowance transactions					160
5.	Conclusion					161
8.	Implementation issue 4: Lawsuits following from emissions trading					163
1.	Introduction					163
2.	The object of the legal claim					164
2.1.	Statutory challenges					165
2.2.	Challenges against the implementation of the law					168
2.3.	Challenges against the enforcement of the law					172
2.4.	International law issues					174
2.5.	Challenges brought by enforcement agencies					176
3.	Specific legal areas					177
3.1.	Liability					177
3.2.	Property rights					178
3.3.	Consumer protection					179
4.	Critical legal issues in enacting an ETS					180
4.1.	Legal standing					180
4.2.	Legitimate expectations					185
4.3.	Precautionary principle					186
5.	Concluding remarks					187
9.	Linking emissions trading schemes					188
1.	Introduction					188
2.	Background					189
3.	Benefits of linking					191
4.	Barriers to linking					192
4.1.	Coverage of the schemes					194
4.2.	Stringency of the political target					195
4.3.	Nature of the policy instrument					196
4.4.	Allocation mechanisms					198
4.5.	New entrants					199
4.6.	Ex post adjustments					200
4.7.	Leakage safeguards					201
4.8.	Offset provisions					203
4.9.	Banking and borrowing					204
4.10.	Environmental effectiveness					205
4.11.	Privacy and data protection					205
5.	Practical experiences					206
6.	Conclusion					207
10.	Concluding remarks					208
1.	Introduction					208
2.	Why?					209
3.	How?					210
4.	What?					212
5.	With whom?					215
6.	Final remarks					216
	References					217
	Index					239

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Description 1 online resource (268 pages) Series New Horizons in Environmental and Energy Law series New horizons in environmental and energy law. Contents 1. Introduction -- 2. Emission trading and alternative instruments -- 3. Design variants of emissions trading -- 4. Real-life applications of emissions trading systems -- 5. Implementation issue 1 : initial allocation of emission rights -- 6. Implementation issues 2 : secondary market for emissions rights -- 7. Implementation issue 3 : operational aspects of emission rights -- 8. Implementation issue 4 : lawsuits following from emissions trading -- 9. Linking emissions trading schemes -- 10. Concluding remarks Summary Emissions trading is becoming an increasingly popular policy instrument with growing diversity in design. This book examines emissions trading design, emissions trading implementation problems and how to address them Bibliography Includes bibliographical references and index Notes Print version record Subject Emissions trading -- Law and legislation. BUSINESS & ECONOMICS -- Infrastructure. SOCIAL SCIENCE -- General. Emissions trading -- Law and legislation Form Electronic book LC no. 2013947144 ISBN 9781781952221 1781952221

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