Real estate issues associated with the implementation of a carbon trading framework : a rural landholders perspective

The issue of carbon sequestration rights has become topical following the United Nations Convention on Climate Change and the subsequent Kyoto Protocol which identified emissions trading as one of the mechanisms to reduce greenhouse gas emissions. The Australian Government has responded by initiating the Garnaut Climate Change Review which in its final report, proposed that an emissions trading scheme be introduced and set out some of the desirable features of such a trading scheme. This proposal has been the subject of much debate and at this stage there still seems to be little clarity surrounding the topic of emissions trading in Australia. The treatment of rights to carbon sequestered in vegetation is also an issue when reconciled with the system of land tenure and ownership in many jurisdictions. These carbon property rights are treated differently in different Australian and international jurisdictions ranging from recognition of their new and unique nature to fitting them within a more established common law framework, e.g.a profit a prendre. This paper identifies the treatment of these sequestered carbon rights within the wider property rights framework in Australia and considers issues that this treatment may inflict on land holders when there is a fracturing of ownership between the rights of the carbon in vegetation and the ownership of the land.

Carbon trading for phosphorus gain: the balance between rhizosphere carboxylates and arbuscular mycorrhizal symbiosis in plant phosphorus acquisition

Two key plant adaptations for phosphorus (P) acquisition are carboxylate exudation into the rhizosphere and mycorrhizal symbioses. These target different soil P resources, presumably with different plant carbon costs. We examined the effect of inoculation with arbuscular mycorrhizal fungi (AMF) on amount of rhizosphere carboxylates and plant P uptake for 10 species of low-P adapted Kennedia grown for 23 weeks in low-P sand. Inoculation decreased carboxylates in some species (up to 50%), decreased plant dry weight (21%) and increased plant P content (23%). There was a positive logarithmic relationship between plant P content and the amount of rhizosphere citric acid for inoculated and uninoculated plants. Causality was indicated by experiments using sand where little citric acid was lost from the soil solution over 2 h and citric acid at low concentrations desorbed P into the soil solution. Senesced leaf P concentration was often low and P-resorption efficiencies reached >90%. In conclusion, we propose that mycorrhizally mediated resource partitioning occurred because inoculation reduced rhizosphere carboxylates, but increased plant P uptake. Hence, presumably, the proportion of plant P acquired from strongly sorbed sources decreased with inoculation, while the proportion from labile inorganic P increased. Implications for plant fitness under field conditions now require investigation.

Responding to the EU Emissions Trading Scheme: an empirical analysis of corporate carbon disclosure strategy

The purpose of this paper is to explore how companies that hold carbon trading accounts under European Union Emissions Trading Scheme (EU ETS) respond to the climate change by using disclosures on carbon emissions as a means to generate legitimacy compared to others. The study is based on disclosures made in annual reports and stand-alone sustainability reports of UK listed companies from 2001- 2012. The study uses content analysis to capture both the quality and volume of the carbon disclosures. The results show that there is a significant increase in both the quality and volume of the carbon disclosures after the launch of EU ETS. Companies with carbon trading accounts provide greater detailed disclosures as compared to the others without an account. We also find that company size is positively correlated with the disclosures while the association with the industry produces an inconclusive result.

Legal issues in carbon farming : biosequestration, carbon pricing, and carbon rights

This paper critically analyses the proposed Australian regulatory approach to the crediting of biological sequestration activities (biosequestration) under the Australian Carbon Farming Initiative and its interaction with State-based carbon rights, the national carbon-pricing mechanism, and the international Kyoto Protocol and carbon-trading markets. Norms and principles have been established by the Kyoto Protocol to guide the creation of additional, verifiable, and permanent credits from biosequestration activities. This paper examines the proposed arrangements under the Australian Carbon Farming Initiative and Carbon Pricing Mechanism to determine whether they are consistent with those international norms and standards. This paper identifies a number of anomalies associated with the legal treatment of additionality and permanence and issuance of carbon credits within the Australian schemes. In light of this, the paper considers the possible legal implications for the national and international transfer, surrender and use of these offset credits.

The legal framework for Australia's carbon pricing mechanism : a critique

As part of the Australian Government’s Clean Energy Plan, the Government has attempted to harness the legal innovation of the tradeable emissions unit, within a capped carbon trading system, to reduce greenhouse gas emissions. Such an approach promises to send a price signal to the market which will influence emitting behaviours and reduce our emissions in a cost-effective manner. However, if the carbon trading scheme is to successfully achieve cost-effective emissions reductions then the carbon market must be supported by an appropriate legal framework. This paper will consider the key features of the Australian Carbon Pricing Mechanism, including the Carbon Farming Initiative, and critique whether it has all the hallmarks of an effective legal framework to reduce Australia’s net greenhouse gas emissions. The likely future of the trading scheme, following the 2013 elections, will also be addressed.

Assessment of the application of contingent valuation theory to bio-sequestered carbon

The issue of carbon sequestration rights has become topical following the United Nations Convention on Climate Change (United Nations 1992 at page 1414) and the subsequent Kyoto Protocol (United Nations Climate Change Secretariat 1998) which identified emissions trading as one of the mechanisms to reduce greenhouse gas emissions. Australian states have responded by creating a legal framework for the recognition of rights to bio-sequestered carbon. There is a lack of uniformity in the approach of each state to the recognition of these rights, which vary from the creation of new and novel interests in land to the adoption of more traditional rights such as a profit a prendre. Rights to bio-sequestered carbon are likely to have an impact on the utility, marketability, value and financing of rural land holdings. Despite the creation of the legal framework for recognition of rights to sequestrated carbon, there has been a delay in the introduction of a formalised carbon trading scheme in Australia. In the absence of an established carbon market, this paper addresses the applicability of contingent valuation theory to assess the value of bio-sequestered carbon rights to a rural land holder. Limitations and potential controversies associated with this application of contingent valuation theory are also addressed in this paper.

Crime and the commodification of carbon

Carbon will be the world's biggest market. Barclays was the first UK bank to set up a dedicated carbon trading desk to help clients, and Barclays Capital is the most active player in the emissions trading market having traded 300 million tonnes as at February 2007. (Barclays, 2007: 1)

Trade in 'Dirty Air' : carbon crime and the politics of pollution

‘Carbon trading fraudsters may have accounted for up to 90% of all market activity in some European countries, with criminals pocketing billions, mainly in Britain, France, Spain, Denmark and Holland, according to Europol and the European law enforcement agency.’ (Mason, 2009). ‘Carbon offset projects often result in land grabs, local environmental and social conflicts, as well as the repression of local communities and movements. The CDM approval process for projects allows little space for the voices of Indigenous Peoples and local communities – in fact, no project has ever been rejected on the grounds of rights violations, despite these being widespread’. (Carbon Trade Watch, 2013)

Towards a Systematic Framework for the Modelling of the Allocation of Carbon Dioxide Emission Quotas in China

The needs for effectively controlling carbon dioxide emissions and properly allocating carbon dioxide emission permits or allowances in China have never been so great. In this paper, a systematic multi-agent-based framework for the modelling and analysis of the allocation of carbon dioxide emission quotas in China is proposed. A carbon trading market model as the core of the activities of allocation management is constructed and discussed. In addition, examples of the modelling and simulation work are presented.

India’s Carbon Governance: The Clean Development Mechanism

Carbon Governance systems – institutional arrangements in place for mitigating greenhouse gas emissions – are different in emerging countries. Indeed, carbon is the same everywhere but Carbon Governance isn’t: in Brazil, the financial community is actively interested in carbon trading, but Chinese banks have hardly any interest in it; and while the Chinese government takes an active interest in providing capacity to project developers, the Brazilian authorities see their role uniquely as guarantors of environmental integrity of emissions reductions projects. In the case of India, carbon governance offers specific features of patterns and interactions mostly because India strongly developed the Clean Development Mechanism and its market. This article proposes a study to the research and understanding of how exactly carbon governance works in the Indian case, knowing that India is the second largest host of CDM projects.

A longitudinal study of carbon disclosure strategy: evidence from utility, energy and mining industries in the UK

The paper investigates how energy-intensive industries respond to the recent government-led carbon emission schemes through the content analysis of 306 annual and standalone reports of 25 UK listed companies from 2004 to 2012. This period of reporting captures the trend and development of corporate disclosures on carbon emissions after the launch of EU Emissions Trading Schemes (ETS) and Climate Change Act (CCA) 2008. It is found that in corresponding to strategic legitimacy theory, there is an increase in both the quality and quantity of carbon disclosures as a response to these initiatives. However, the change is gradual, which reflects in the achievement of peak disclosure period two years after the launch. It indicates that the new legislations have a lasting impact on the discourses rather than an immediate legitimacy threat from the perspective of institutional legitimacy theory. The results also show that carbon disclosures are an institutionalised practice as companies in the same industries and/or with same carbon trading account status appear to imitate and adopt the industry’s ‘best practice’ disclosure strategy to maintain legitimacy. The trend analysis suggests that the overall disclosure practice is still in its infant stage, especially in the reporting of quantitative and monetary items. The paper contributes to the social and environmental accounting literature by adopting both strategic and institutional view of legitimacy, which explains why carbon disclosures evolve in a specific way to meet the expectation of various stakeholders.