Legal Protection and (the Lack of) Private Party Remedies in International Carbon Emission Reduction Projects

Simonetti, Sander
May 2010
Journal of Energy & Natural Resources Law;May2010, Vol. 28 Issue 2, p171
Academic Journal
The Kyoto Protocol has not only created carbon emission reduction obligations for industrialised countries, but also opportunities for the private sector to participate in its 'flexible mechanisms'. Although the outcome of the Copenhagen Climate Change Conference may not have been what the carbon market was hoping for, market parties are still hopeful that a successor treaty to the Kyoto Protocol will include similar market mechanisms. One of the current Kyoto mechanisms is 'joint implementation', which allows private legal entities to engage in international emission reduction projects that generate tradable emission rights. Private parties can act as verifiers of the emission reductions achieved by such projects, or as buyers of the generated emission rights (such buyers may include utilities, energy and mining companies, as well as banks, traders and private investors). During the joint implementation project cycle, these private parties can become involved in several types of disputes with various counte parties. This article explores the legal remedies available to such private parties. Long-term private sector investment and contribution to the objectives of the Kyoto Protocol are more likely to occur in a stable regulatory environment, which requires a certain degree of legal protection, including proper access to justice in case disputes arise. This should also be taken into account in the post-Kyoto legal framework.


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