| Strictly speaking, the emission rights system consists of three main process--capping, allocating, and trading. Among them, the capping process takes the responsibility of protecting the environment and creating the market, which constitutes prerequisite of the emission rights system; the trading process guarantees optimal allocation of scarce resources, which forms the logical end of the emission rights system. The initial allocation of emission rights plays a role of connecting the capping process and the trading process:by virtue of the initial allocation mechanism, shares of the cap must be distributed among resource users and potential resource users in the allocation process according to established distribution rules. Through the initial allocation mechanism, the relatively exclusive, measurable and tradable emission rights can be established, and as a result of that, the economic-efficiency-centered market trading mechanism is possible to start. Research on the initial allocation of emission rights mechanism can not only guide the practice of initial allocation of emission rights, but also perfect the emissions trading system itself.The first part of the dissertation is the preliminary analysis of the basic principle of the initial allocation mechanism. First of all, it is necessary to define the legal nature of the emission rights. By analyzing the plight of transferring the emission rights into the real right, the article points out that, in the situation of the diverse and integrated property rights, and the ever-increasing functional property, we should jump out of the ideas that ownership is the center of other rights, so that we can find the legal nature of the emission rights limited to the absolute real rights and relative obligation rights. With a reference to theories from "the New Property", the article points out that the legal nature of emission rights should be analyzed from the following aspects:First, the emission rights has the dual legal nature of private rights and public rights, which should be regulated by both public and private laws; secondly, the emission rights is the functional right, with the function of promotion, guidance and encouragement, and so on; thirdly, the protection for the emission rights has special feature:the nature of emission rights plays a vital role in the initial allocation process. Next, the article analyses the initial allocation mechanism of emission rights. Being a legal act, a legal process and a distribution relationship, the basic elements of the initial allocation mechanism, that is, the distribution of subjects, objects and the allocation rules between different subjects should be relatively fixed. The initial allocation of emission rights includes the following characteristics:integration of market means and management means under the guidance of executive authority; integration of profit allocation and resource allocation and the integration of various value orientations. Finally, the author analyses the theory on legal allocation subjects. The author declares that the subjects refer to legal persons or organization of legal community that take part in the initial allocation process in accordance to the law or agreement, enjoy rights and bear responsibilities. According to the different features of their rights and duties, the subjects in initial allocation process can be subdivided into allocation subjects and acceptance subjects. In some special circumstances, the state can be both an allocation subject and an acceptance subject. Allocation subjects refer to those executive bodies or associated agencies that determine the share of allocation according to the agreed allocation rules, enjoy relevant rights and bear duties. Acceptance subjects generally refer to those emission subjects that enjoy a certain amount of emission share according to the laws or regulations. Allocation subjects, acceptance subjects, together with other interest parties, form an allocation community.The second part of the dissertation discusses the basic rules of initial allocation of emission rights, including Prior possession, Present possession, equitable distribution and others. Prior possession is also known as Prior allocation, and is the initial allocation based on prior emission or other criterion of distribution. The legitimacy of Prior possession is fully supported in Locke’s and Nozick’s theory. Prior possession plays an important in an initial allocation, but it also faces some difficulties, for example, the choice of the base year, and other moral dilemmas. Present possession is also called grandfathering. It is an initial allocation of emission rights based on present emission, the latest emissions figures or other criteria. Present possession’s legitimacy can be found out both from current law, from Hume’s utilitarianism and from efficiency of law and economics. Present possession owns many advantages, including:the reduction of system cost for re-establishing allocation rules; bringing about increased efficiency; producing the expected effects of such rules. Nevertheless, the endowment effect caused by the present possession may result in "reluctant-to-sell psychology". From the long-term point of view, this type of allocation also reflects the idea that humans are independent of nature, which conflict with the idea of harmony between man and nature. Equitable distribution includes initial distribution based on fair opportunities, initial distribution based on fair results and diverse distribution based on the fairness of both opportunity and result. Dworkin’s equality theory of resources and the "Auction Suppose" demonstrates the legitimacy of the auction rules in the initial allocation of emission rights. Auction can be divided into sealed-bid auction and ascending auction. Auction rules guarantee equal bidding opportunities for each pollutant, emphasize the fair opportunities on the initial allocation emissions and bring fund for environmental management. Because of these advantages, auction rules have become the major allocation rule in theory and practice. However, auction rules also have some disadvantages; for instance, it may cause the pollutants to stop planning sewage and increase the burden of additional costs for emission subjects. Egalitarian allocation, which focus on fairness of results, also occupies a place in allocation of greenhouse gas. The uncertainty of global climate change causes the proliferation of egalitarian thought. Egalitarian allocation consists of contraction and convergence and so on.The third part of the dissertation gives a detailed description of the basic rules of the initial distribution. It reviews the allocation process of the open game of the United States "Acid Rain Program", and points out what can be learned from that experience:First, according to law, subjects (EPA) is endowed with the main responsibility to guarantee the smooth progress of the initial distribution. As an executive body, EPA is authorized by the federal government and directly responsible to the president. The legal status and responsibilities is to ensure the necessary conditions for the initial allocation, to express statutory authorization to bring environmental authorities as well as personnel and better equipment; Secondly, acceptance subjects was given an effective definition and orderly expansion according to the plan. After scientific evidence and public game, acceptance subjects was limited to fixed sources, homogeneous characteristics such as thermal power plants, and in accordance with mandatory and voluntary participation to determine the number, the number of effective protection in the main market effects of scale. The number of trial should not be too many and too complex at first, after certain period of trial, the scale can be gradually expanded; thirdly, there is a major distribution pattern based on one rule and the coexistence of multiple distribution rules. Which distribution rule to apply is up to the dominant role in the economic, political, technological and environmental conditions and the level of organic integration of the rules. In the "Kyoto Protocol", present possession met the needs of greenhouse gases of the participating countries. Furthermore, it took into account the existing interest of different countries, so that it could maximize the current benefits. Moreover, this distribution included a lower control costs. Emissions allocation rights mechanism based on per capita emission provided developing countries with greater survival and development space and so made it easier for them to accept. However, due to the difficulty in determining the base year and the loss of voice for developing countries, egalitarianism failed to appear in international law.The fourth part of the dissertation supplies some proposals for the initial allocation of emission rights mechanism of China. After reviewing the emission trading system of normative legal documents, the author analyzes the existing problems in the mechanism of China’s initial allocation of emission rights:in the first place, the emission system lacks a general consideration, and the phenomenon of fragmentization prevails in China, with the main interest staying on the level of "trading". In the second place, there is problem on allocation subjects and the distribution of its allocation rights, for instance, horizontally, the department’s interests and the lack of supervision power; vertically, virtualization of the sources of formal laws; and the low operability caused by various power allocation, etc.. In the third place, there are problems on the initial emission allocation rules, such as homogeneousness of allocation rules, difficulty in harmonizing efficiency, fairness and environmental protection, and the huge cost in fixed-price sale rules; alienation of auction rules, with a high risk of becoming capital game; different names on paid allocation, making it possible to increase the cost for the emission subjects. In the fourth place, there are problems on allocation data management rules, such as the lack of management system for the standard emission database and the lack of clear accountability system. Based on the above analyses, the author put forward the following suggestions:one, in terms of laws and regulations, the author holds that it is necessary to modify the existing laws and regulations to clarify total emission amount control system and implementation measures, to authorize environmental agencies the rights to allocate the initial emission, and to publish the national regulations on initial emission allocation rights. Two, in terms of initial emission allocation subjects, the state should clarify the Environment Bureau’s leading role in total emission control and initial allocation on the basis of integration of energy and environment policies; establish joint conference system and reporting system. Three, in terms of acceptance subjects, the state should consider factors such as homogeneousness, cost difference, technological means, market power, etc.. Combine compulsory and voluntary means together, so that it can gradually enlarge the number and scope of acceptance subjects. And for a certain long period of time, it should be mainly popularized in thermal power industry. Four, in terms of allocation rules, the state should establish a system with one major allocation rule and many other minor allocation rules. Finally, it comes to the viewpoint of the dissertation:the various rules on initial allocation of emission rights are widely applied in legislation or practice, but at the same time, they all possess certain limitations. Every rule has its advantages and disadvantages and in different geographical sectors, technology and other conditions, these advantages or defects of may be maximized or minimized. There is no allocation rule that can be confirmed to be superior to all the other allocation rules when taking into consideration all levels of the system. The choice of the rules for initial allocation of emission rights satisfy a number of value targets, so it ultimately depends on the system, economic and technological conditions functioning the dominant role in a specific time and place. |
