Climate Change: A Guide to Carbon Law and Practice

Citation

Bhattacharyya, S. (2010), "Climate Change: A Guide to Carbon Law and Practice", International Journal of Energy Sector Management, Vol. 4 No. 2, pp. 302-303. https://doi.org/10.1108/17506221011058740

The global carbon market has grown rapidly over the past decade or so and anyone familiar with these developments understands its complexity. According to the State and Trends of the Carbon Market 2009 by the World Bank, the value of the market has doubled between 2007 and 2008 and reached $126 billion by the end of 2008. The European Emissions Trading is the dominant mechanism in the market accounting for about two‐thirds of the market value. Other instruments like the credits from the Clean Development Mechanism (CDM), project implemented jointly (or JI), voluntary reduction, etc. play a minor at present. The global nature of the market and differences in the legal/regulatory arrangements for each instrument makes the subject very complex both for students and practitioners of the subject. This volume tries to address the legal challenges faced by businesses in this emerging market by providing a comprehensive picture of the legal and practical elements of the market. This is a timely volume and useful to a wider readership. The volume is presented in a non‐legal language that makes it accessible to non‐lawyers as well.

The volume is divided into four parts – introduction, carbon projects, carbon trading and carbon issues for lawyers. These four parts contain 17 chapters in total. Two introductory chapters indicate the importance of the subject for lawyers and trace the history of carbon law evolution. These are designed to provide an overall up‐to‐date understanding of the legal developments in this area.

The second part mainly focuses on project‐based carbon mitigation mechanisms – notably the CDM. This part starts with financing of projects and then discusses the project life. The sequencing is somewhat awkward here – the project concepts, regulatory and legal aspects should come first, financing comes thereafter. The chapter on financing mainly focuses on World Bank supported funding arrangements. While Global Environment Facility and other bank funding arrangements played an important role initially, the CDM and JI projects have also been funded through other mechanisms. Similarly, the chapter of project running provides a generic information and does not enter into the specifics of additionality, small scale projects and programme‐level activities. These aspects would have made the chapter more informative. Some reference to the CDM Executive Board decision on methodology and project approval could have been included as well.

The third part covers the trading aspects. It contains five chapters covering contracts, sale, and global market creation. Sale of carbon credits focuses on allowances produced by project‐based mechanisms but the key issue of pricing is not considered adequately. Similarly, the view from the trading floor focuses on ETS only, although other instruments are also traded. The chapter on creating a global carbon market essentially considered the European Emissions Trading System and did not address the relevant ideas of linking various markets, their compatibility and challenges, and integration of CDM as well as voluntary reductions into this.

The last part of the book raises issues for lawyers. This covered diverse issues like accounting and taxation, corporate social responsibility, competition, real estate and green city development, carbon regulation in the USA, and carbon sequestration. As can be imagines this is like a sundry section where any material that could not be fitted was accommodated. The sequencing and organization of the chapters does not follow any apparent logic.

The book has been written by industry professionals with practical experience on the subject. This is evident from the materials but the book is not written in an academic style as it does not refer to any other works in the area. A bibliography at the end of the book would have been useful for students and researchers, although the book's target audience is perhaps the practitioners. The organization of the book could have been improved by following a logical progression of ideas. In addition, the chapters could have provided a sense of linkage – each chapter was perhaps commissioned independently and they stand alone without necessarily providing any link with each other. This is a major weakness of the book.

Overall, the guide is informative and the authors have provided an easy‐to‐understand account of the legal developments in the carbon market. This will appeal to anyone with an interest in the subject and prove useful to those who are already involved or are planning to be involved in this fast‐growing business.