Currencies and the Commodification of Environmental Law

By Salzman, James; Ruhl, J. B. | Stanford Law Review, December 2000 | Go to article overview

Currencies and the Commodification of Environmental Law


Salzman, James, Ruhl, J. B., Stanford Law Review


INTRODUCTION

   Two major, integrally related trends define U.S. environmental law at the
   millennium. The first trend is to bring presently unregulated risks under
   the control of the regulatory system. The second trend ... is toward bigger
   bubbles--toward broader and broader trading among pollutants and even among
   various types of risk reduction....(1)

Picture a playground where children in business suits trade environmental protection like baseball cards. The front sides bear slick images of endangered species, drops of acid rain, and vanishing habitats. The flip-sides show all the statistics--population remaining, acreage consumed, who benefits from the wetlands, who is harmed by the pollution. And the kids sit huddled round in an excited circle, busily swapping cards. To snag Jamie's prized cattail wetlands, Ben must part with his cherished saltwater marsh.

There are differences, of course, between this imaginary playground and a market in real environmental commodities. A "bad trade" in baseball cards is in the eyes of the beholder and, at worst, damages only a child's ego. When parties trade environmental protection, though, what seems a good trade looking at the pictures may lose its appeal once we take a closer look at the statistics and the effects of the trade on the environment itself.

Over the last decade there has been a sea change in environmental law and policy, marked by growing interest in market-based instruments of environmental protection. In particular, approaches that explicitly commodify environmental impacts by creating markets for their sale are on the rise. These environmental trading markets (ETMs) now operate in a range of regulatory settings where parties exchange credits to emit air pollutants, extract natural resources, and develop habitat.(2) In fact, every major environmental policy review in the last five years has called for even greater use of ETMs.(3) Markets for environmental commodities represent the new wave of environmental protection and, despite critiques both subtle and shrill, they are still building.

ETMs have provided an enormously fertile area for scholarship. Articles have explored the mechanics of trading programs,(4) debated the advantages of trading over command-and-control regulation,(5) and, most recently, assessed the application of ETMs in the international sphere.(6) Within this wealth of literature, however, a basic aspect of trading has largely escaped attention. Perhaps because it is so obvious, there has been scant consideration of the simple question--what is actually being traded?

If one compares trading programs, they all seem to share a basic feature. The CFC, fisheries, and proposed greenhouse gas ETMs, for example, all exchange commodities that appear to be fungible. One molecule of CFC, kilo of halibut, or ton of carbon dioxide seems much the same as another, both in terms of identity and impact. It is trading apples for apples (or pork bellies for pork bellies). Thus ETMs are considered a type of commodity market, where environmental credits go to the highest bidder. And for good reason, since the Chicago Board of Trade now sells rights to emit sulfur dioxide alongside pork bellies, orange juice, and grain futures.(7)

Indeed ETMs must assume fungibility--that the things exchanged are sufficiently similar in ways important to the goals of environmental protection--otherwise there would be no assurance that trading ensured environmental protection. While the precondition of fungibility may seem self-evident, this core assumption turns out to be more problematic than it first appears.

As an example of why fungibility matters, consider wetlands mitigation banking. This policy permits developers, once they have taken steps to avoid and minimize wetland loss, to compensate for wetlands that will be destroyed through development by ensuring the restoration of wetlands in another location. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Currencies and the Commodification of Environmental Law
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.