Determining the legal nature of carbon emission rights - International experience and recommendations for Vietnam

Abstract

A market for carbon emission rights is considered an effective mechanism to control emissions and to develop the economy. The nature of the market is the circulation of assets, so its stability depends on a clear identification of the legal nature of objects allowed to circulate. However, carbon trading markets worldwide have yet to reach a consensus on the legal nature of carbon emission rights. This article points out that national laws employ different approaches to define the legal nature of carbon emission rights, specifically: (1) as an administrative tool; (2) as an object of ownership, which it can be divided into either goods or financial instruments; (3) as an obbject of restricted ownership; (4) is determined flexibly. This article explores the factors in determining the legal nature of carbon emission rights, gives a general analysis on Vietnam’s laws on this subject, and proposes some recommendations for improvement.