Economic analysis of carbon credit laws

Since the 1900s, there has been a great deal of deliberation and research regarding the state of the environmental degradation, which has been a steady and ever-increasing phenomenon enhanced by the industrial revolution which has spread across the length and breadth of this planet. Scientific evidence has always pointed out irresponsible human activities and industrial pollution and waste as a primary reason of this degradation. The field of modern international environmental law has its origins in a dispute between the United States and Canada over air pollution damages in Washington State from an ore smelter in Trail, British Columbia. ¹ The resolution of this dispute established the norm of customary international law that it is the state’s duty to avoid letting its activities produce harm in other states. Failing that duty, a state is liable to compensate for environmental damages. ² International environmental law in the 1950s and 1960s proceeded almost exclusively in the form of such customary laws. In the 1970s, treaties began to codify the customary norms of international environmental law. The 1980s and 1990s witnessed a proliferation in the magnitude, complexity and scope of international environmental law treaties. ³ No longer content to merely codify existing norms, these new treaties imposed new duties and standards on states and other actors. In response to this scientific evidence, the global community agreed in 1992 to an international treaty, the United Nations Framework Convention on Climate Change. The treaty requires countries to cooperatively consider what they could do to limit average global temperature increases and the resulting climate change and to cope with whatever impacts were, by then, inevitable. As of June 2013, the treaty has been ratified by 195 parties. ⁴