Emissions Trading and the Rule of Law: Any Place for Soft Law?

Activity: Talk or presentation / Performance / SpeechesTalk or presentation - at conferenceAcademic


With the instrument of emissions trading, such as the EU emissions trading scheme (EU ETS), a reduction of the total amount of emissions in a certain region can be regulated in a very effective way. The establishment of a cap sets a maximum threshold to allowable pollution. This environmental guarantee can only be reached if the actors covered by the scheme surrender allowances equal to the emissions that they have caused individually. Since effective environmental protection is dependent on high compliance rates, a well-designed monitoring and enforcement approach is crucial.

At the same time, since the emissions trading instrument provides a price on pollution, opportunistic or even fraudulent behavior could take place among actors covered by the scheme. In this sense, solid regulation is needed: the obligations need to be as clear as possible, and should be enforceable before the courts. Any vagueness in the regulatory framework may induce covered entities to find and use loopholes in order to gain a better, less costly, position.

While emissions trading needs a strong application of the rule of law in order to reach the intended environmental aim, the practice of the EU ETS remarkably shows the use of various soft law approaches: the European Commission has published several non-binding documents providing guidance to the regulatory framework. In various cases, the Court of Justice of the EU has referred to these guidance documents as well.

This presentation will explore why, in EU ETS practice, soft law is used, and how this can be appreciated from a legal perspective,
Period29 Aug 2018
Event title5th EU-China Conference on Environmental Law: Green Law, economic instruments and environmental crime
Event typeConference
LocationGhent, BelgiumShow on map