Now it is time to evaluate the lessons of the two case studies and bringing out the special circumstances created by attempting to make an ETS under voluntary assent. The case studies where informative in two ways. It brought out what was needed in order for an ETS to be accepted and what the ETS should consist of.
Because under voluntary assent, a nation-state cannot be forced to either accept or comply with any treaties that they do not want to, there must be acceptance of the regulatory scheme.[EN40] In order to create acceptance, the signatories must feel that the treaty fairly addresses their concerns and is their best alternative. The major differences between the VOC and the NOx/SOx situation were that VOC previously had little monitoring and previous regulation. The lack of these two factors caused a lot of uncertainty.
The lack of monitoring and previous regulation of emissions on the global level can also have detrimental effects on the creation and acceptance of a GW-ETS. There is much uncertainty about the amount of chemicals that affect GW being emitted and how they affect the climate. A nation-state will not agree to limit their emission of greenhouse gases unless they are sure that the limit is a fair level. Because there are no global requirements on abatement, nation-states are able to pollute as much as they want. There is no threat of stricter regulations to force compliance like there was with NOx/SOx and they know that no regulations can be forced on them. Consequently, the biggest and first obstacle to be faced is for there to be agreement on the levels of abatement that each country should be responsible for.
Plan for Success
As highlighted by the earlier section, there needs to be an accurate assessment of each country's responsibility. In order to get this assessment, the emissions need to be monitored accurately. As done by Title IV, [EN41] all the countries need to agree on and implement a CEM device. This will give an accurate measurement of current emissions and a way to assure compliance.
Once countries have figured out what their current emissions are with the aid of the CEM devices, they can set out to develop emission caps for each country. The limits should be based on the total amount of greenhouse gasses that will not increase GW or maybe even a level that could reduce GW. The global limit should then be divided among all the nations. An equitable way to divide the allowances still has not yet been developed for the global problem. As of now the Kyoto Protocol ("Kyoto") [EN42] has set up limits on some countries [EN43] based on earlier emissions.[EN44]
After the limits of emissions have been determined, the next step of implementation can begin. In order to make implementation a success there needs to be reliable tracking of emissions, the price of an allowance should be set and there needs to be universal acceptance (at least close to complete agreement) of these restrictions.
The issue of tracking has not been dealt with under Kyoto.
There should be a provision that determines the price at which allowances should be traded for because the fluctuation of allowance prices can slow the progress of trading. The market is expected to determine the price of allowances, but that has not happened under the AR-ETS. There are also analogous external forces that affect the prices of allowances faced on the global level like those faced in the AR-ETS. These similar concerns are future regulations, changes in the cost of other forms of abatement and state regulations (nation-state regulations on the global level).
Handling future regulations and cost of other abatement choices will be the same on the global level. However, because of the use of voluntary assent in creating treaties, it is a bit harder to handle nation-states. Just as states tried to pass laws to protect their interests, one must believe that nation-states will try to pass rules that they feel will benefit them. Two ways to combat this would be to put a non-hindrance of trade clause in the treaty that created the ETS or to hope that the WTO would object to the rules that hindered trade. The problem with the non-hindrance clause is that it would be hard to monitor compliance. Multinational corporations who saw that their ability to capture more cost savings would probably bring most of the suits. The first hurdle to get over in this scenario would be to find standing in the treaty dealing with the ETS or another treaty to bring the case before the International Court of Justice ("ICJ").[EN45] Article 34 of the Statue of the ICJ says, "only states may be parties in cases before the Court."[EN46] However, even if standing was found, because nation-states are sovereign they neither have to agree to appear in court or abide by its ruling. This further stresses the needed for accountability, but under voluntary assent no one is liable unless they consent.
Universal acceptance of an ETS and limits on emissions has not happened globally. Only the countries that have been designated Annex I countries under Rio have been regulated.[EN47]
Finally, after the problems of implementation have been solved, the issue of punishing non-compliance must be dealt with. Enforcing the terms of the ETS have been dealt with in the Rio Convention.[EN48]
There are many failings in the handling of GW under an ETS so far. However, there is hope. The protocol system employed to deal with GW is a democratic process that adapts over time. Hopefully, if the guidelines for making a successful ETS put forward in this paper are referenced for the future protocols, an ETS for GW can be employed.