Backes, Chris; Deketelaere, Kurt; Peeters, Marjan; Schurmans, Marijke --- "The Underestimated Possibility of Ex Post Adjustments: Some Lessons from the Initial Greenhouse Gas Emissions Trading Scheme" [2008] ELECD 419; in Faure, Michael; Peeters, Marjan (eds), "Climate Change and European Emissions Trading" (Edward Elgar Publishing, 2008)

Book Title: Climate Change and European Emissions Trading

Editor(s): Faure, Michael; Peeters, Marjan

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847208989

Section: Chapter 7

Section Title: The Underestimated Possibility of Ex Post Adjustments: Some Lessons from the Initial Greenhouse Gas Emissions Trading Scheme

Author(s): Backes, Chris; Deketelaere, Kurt; Peeters, Marjan; Schurmans, Marijke

Number of pages: 30

Extract:

7. The underestimated possibility of ex
post adjustments: some lessons from
the initial greenhouse gas emissions
trading scheme

Chris Backes, Kurt Deketelaere, Marjan
Peeters and Marijke Schurmans

1. INTRODUCTION
An ex post intervention within an emissions trading scheme is a governmen-
tal decision that changes the legal circumstances under which the market and
thus the market participants may operate. A specific example of such an ex
post intervention, which is the focus of this chapter, is the upwards or down-
wards adjustment of the amount of tradable rights (also called allowances) to
which a company is entitled. From a viewpoint of legal certainty, ex post
adjustments concerning allocated tradable allowances need careful attention.
Indeed, the withdrawal of issued traditional `permits', let alone modern trad-
able allowances, needs to be balanced between, on the one hand, the specific
legal position of the permit-holder, and, on the other hand, the specific policy
goal that motivates the administration to withdraw the permits. Secondly,
particularly for an emissions trading market, stability of the legal conditions
under which trade can occur is seen as an important stimulus for letting the
market work. Without confidence in the trading system, participants would be
reluctant to trade. Moreover, as with all environmental and other legislation,
the administrative tasks for implementing the emissions trading instrument
should be transparent and should be kept as feasible and simple as possible.
Following these considerations, the governmental competence to conduct ex
post adjustments with regard to allocated emissions rights needs meticulous
consideration. ...