Abstract

http://ssrn.com/abstract=1583464
 
 

Footnotes (217)



 


 



Enabling Investment in Environmental Sustainability


Heather Hughes


American University - Washington College of Law

April 2, 2010

Indiana Law Journal, Vol. 85, No. 2, 2010

Abstract:     
This Article proposes an “environmental practices money security interest” (EPMSI) that could be added to Uniform Commercial Code (UCC) Article 9 to facilitate transactions that enable good environmental practices. EPMSI rules would grant priority over earlier investors to financers whose extensions of credit enable debtors to invest in improving environmental impact. This work suggests that we should not rely exclusively on government subsidies such as tax credits and subsidized loans to induce investments in improved environmental impact when we could also enact commercial law devices that do so. An EPMSI would add to states’ legislative efforts to address climate change by enabling companies to issue high-priority debt to finance improvements in sustainability. Article 9’s blend of first-in-time priority rules and later-in-time interests that enjoy exceptions to these rules is, essentially, about benefits and drawbacks of new money. As we consider these benefits and drawbacks, two points about Article 9 become important: first, legal scholars overstate the extent to which the purchase-money rules avoid dilution risk by limiting purchase-money collateral to new goods, and, second, scholars overlook the existence of production-money interests in agricultural finance in analyses of Article 9 and interests with later-in-time priority. Ultimately, levels of commitment to mechanisms for private funding of improved environmental sustainability, and of tolerance for risk of dilution to secured creditors’ positions, are for collective determination. Through making a concrete reform proposal, this Article intends to animate, in the context of UCC Article 9, questions about environmental costs and financing of improvements in sustainability.

Number of Pages in PDF File: 55

Keywords: secured transactions, environmental law, commercial law

JEL Classification: K2, K32, K11, K12, Q2, Q3

Accepted Paper Series


Download This Paper

Date posted: April 5, 2010  

Suggested Citation

Hughes, Heather, Enabling Investment in Environmental Sustainability (April 2, 2010). Indiana Law Journal, Vol. 85, No. 2, 2010. Available at SSRN: http://ssrn.com/abstract=1583464

Contact Information

Heather Hughes (Contact Author)
American University - Washington College of Law ( email )
4801 Massachusetts Avenue N.W.
Washington, DC 20016
United States
Feedback to SSRN


Paper statistics
Abstract Views: 850
Downloads: 97
Download Rank: 161,045
Footnotes:  217

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.296 seconds