The Case against Private Property in Carbon Assets: Why property rights in the carbon cycle are causing carbon policies to fail

Abstract

It is claimed that private property rights in carbon assets will both reduce carbon emissions and will increase investment in sequestration activities, thereby mitigating the effects of or solving climate change. Supposedly, property rights acting in a carbon market will assist emitters in transitioning to lower-emissions technology while creating an incentive for land managers to engage in rights-creating sequestration activities. This thesis focuses on biological sequestration and shows that property rights in carbon assets will hinder, rather than facilitate, carbon policy success.

This thesis begins with an examination of whether it is appropriate to assign property rights to a natural cycle. Because of the physical, legal, and moral inability to exclude others from the carbon cycle, this thesis rejects private property rights in carbon assets, which represent a portion of the carbon cycle. However, as regulators desire to actively manage the carbon cycle, the common justifications of private property are reviewed to determine whether any of these property theories can justify the creation of private property in carbon assets. Private property rights in carbon assets are rejected as the rights, and the consequences of the rights, are contrary to society’s social, legal, administrative, and environmental goals. Ultimately, carbon policies are more likely to be successful when carbon assets are held publicly rather than privately.

The conclusion of this thesis is significant as numerous governments have considered, or are considering, the creation of private property rights in carbon assets. Further, it is not evident that an academic analysis has previously been undertaken to determine whether creating property rights in the carbon cycle is appropriate or whether a property approach will reduce atmospheric carbon concentrations. The analysis in this thesis can play a role in creating successful and sustainable carbon policies.