Who Owns Carbon? Property Rights Issues in a Market for Greenhouse Gases

Travis Allan and Kathy Baylis

CAFRI: Current Agriculture, Food and Resource Issues, 2006, issue 7, 9

Abstract: With the Kyoto Protocol having come into force on February 16, 2005, participating nations face a pressing deadline to develop systems to reduce their emissions of greenhouse gases (GHGs). Any form of GHG reduction that includes a trading component will involve a change in the definition and/or allocation of property rights attached to emission credits, and any change in property rights will affect the ability of governments to efficiently reduce GHGs. Creation of property rights for carbon is complicated by the need to balance 1) clear incentives for firms to invest in emissions reduction with 2) unintentional creation of a lasting right to pollute. In particular, Canada’s federalist system poses some unique difficulties for policy makers in designing property rights over carbon. The purpose of this article is to explore the role of property rights in economic GHG reduction schemes, specifically in terms of jurisdiction and allocation, and their relationship to economic efficiency. The article identifies and discusses a number of property rights issues that need to be addressed when establishing an emissions trading regime in Canada.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ags:cafric:46380

DOI: 10.22004/ag.econ.46380

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