Legal Issues Related to Creation, Banking and Use of Emission Reduction Credits (ERCs). Part 2. The Public Trust Doctrine

摘要

This report presents an overview on which involves the creation of surplus pollution reductions (Emission Reduction Credits) at certain emission sources and use of these reductions to meet requirements applicable to other emission sources. The public trust doctrine holds that some public resources, notably land, are held in trust by the state for the public. Insofar as an Emission Reduction Credit (ERC) might be construed as a private right in a public resource (air), the doctrine may be of concern to states adopting an emissions trading program. At most, the public trust doctrine is common law, and presumably a properly enacted state regulatory program (enacted under state and federal statute) would preempt a common law doctrine. The only consistent reading of the public trust doctrine is that the state must administer public property in a way that ensures broad public use for all purposes. An emissions trading program is consistent with this end, allocating competing uses of a limited resource. An ERC program does not conflict with the public trust doctrine, and the doctrine should prove no obstacle to Emissions Trading.