Emission trading and green finance: New frontiers and drawbacks of private environmental governance

Abstract

‘Economic models’ for the protection of environment, as opposed to ‘command and control’ models, apply market incentives to induce private actors to adopt environmentally responsible behaviors. Such models mainly rely on private law tools, such as property and contract. This paper analyzes social implications and regulatory limits of two of those models from an ecological perspective: the longstanding ‘emission trading system’ and the more recent use of financial instruments specifically aimed at the development of environmentally sustainable projects (green bonds).