This chapter does not discuss legal aspects of emissions trading on the international level, like international emissions trading among states, and the project-based mechanisms known as Joint Implementation and the Clean Development Mechanism. These emissions trading concepts have been provided by the Kyoto Protocol, and they should be analysed within the context of the specific framework of international law. It is however increasingly argued that the instrument of emissions trading should preferably be applied within a well-developed legal system, meaning that the basic obligation that no pollution will be caused unless this is covered by a tradable permit (or credit) is ensured through an adequate enforcement regime.15 The need for
15 This has also been recognized for instance by the International Network for Environmental Compliance and Enforcement (INECE), See also: http://inece.org/ emissions.
monitoring and enforcement of emissions trading within the EU context has already been discussed in literature, and will remain an important factor for consideration.16 The international legal system is still weak with regard to compliance and enforcement. From this perspective of compliance, it has even been argued that on the international level a harmonized tax system should be preferred to that of a carbon trading system.17 Also, for developing countries, one can make some reservations when considering economic instruments for their domestic environmental law policies. It seems a wiser approach to experiment with the emissions trading instrument first in relatively well developed legal systems, in order to get a better understanding of their effects and possible improvements before applying the instrument in legal orders that are less mature.18
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