Emission Allowances and Carbon Credits as Property: A Finnish Perspective

Abstract

Abstract 148Whether emission allowances and carbon credits constitute property is an interesting legal question in every private law system. EU ETS allowances and similar allowances are instruments that are used to settle obligations based on previous emissions. If the concept of property is defined at the level of rights, allowances should not be considered as property. Yet, they may qualify as objects that can be owned. We come to this conclusion in Finland where the concept of property is usually defined so that property consists of patrimonial rights. Furthermore, ownership of allowance is property. Similarly, CERs under Article 12 of the Kyoto Protocol and A6.4ERs under the Paris Agreement do not constitute property under Finnish private law but qualify as objects of ownership. The same findings apply to carbon credits issued by independent crediting mechanisms, presuming it is reasonable to conceptualize the credits at hand as objects of ownership.