Propertizing Environmental Attributes

56 Pages Posted: 27 Aug 2021 Last revised: 6 Dec 2021

See all articles by Katrina Wyman

Katrina Wyman

New York University School of Law

Adalene Minelli

New York University School of Law

Date Written: August 23, 2021

Abstract

Tangible environmental resources such as land and water have been the object of property rights and traded in markets for millennia. In a development largely unnoticed by legal scholars, technology now allows a new class of environmental resources that are much harder to see and touch to be measured, and potentially sold—environmental attributes. Some of these resources have already been partially packaged into property rights for sale by some governments and private actors, such as actual and avoided carbon emissions, and the environmental benefits of renewable power and electric cars. Other resources, such as avoided water use, remain unpropertized. Trading environmental attributes can help to achieve important societal objectives, such as decarbonizing the energy system, although there are also criticisms of using markets for these goals.

This article emphasizes that property rights need to be created in environmental attributes if policymakers and private actors wish to enlist markets to achieve societal goals. The article explains the steps involved in creating property rights in environmental attributes. Drawing on the approaches already used to create property rights in some of these attributes, the article identifies a menu of options for establishing property rights in attributes that currently can be measured and those that technology will allow to be isolated in the future. In addition, it applies this menu to recommend a first in time rule for establishing property rights in avoided electricity use from energy efficient appliances and other energy saving measures, a prominent example of the newer class of environmental attributes. A resource that policymakers have been seeking to harness for decades, energy efficiency is currently traded in some jurisdictions and trading could expand if the rules for initially allocating energy efficiency were clarified.

Suggested Citation

Wyman, Katrina and Minelli, Adalene, Propertizing Environmental Attributes (August 23, 2021). NYU Law and Economics Research Paper No. 21-18, Available at SSRN: https://ssrn.com/abstract=3910039 or http://dx.doi.org/10.2139/ssrn.3910039

Katrina Wyman (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

HOME PAGE: http://rb.gy/etxixk

Adalene Minelli

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

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