Statutory Entitlements as Property: Implications of Property Analysis Methods For Emissions Trading

Legislatures are increasingly developing novel, tradeable statutory entitlements, such as transferable licences or allowances, to respond to a range of social and environmental issues. However, the statutes that establish such entitlements commonly overlook the nature and scope of the legal interests, personal or proprietary, which may exist in relation to an entitlement. As a result, courts are increasingly dealing with issues that stem from the uncertain legal nature of statutory entitlements. Issues that have arisen include whether a statute dealing with property transfers is applicable to a particular statutory entitlement, whether a regulator must pay compensation for withdrawing an entitlement or whether a statutory entitlement is capable of supporting rights that are enforceable against third parties. To determine the legal nature of statutory entitlements, courts undertake a property analysis that involves considering the attributes of a statutory entitlement against particular indicia of property. In this article, we focus on the diff erent conceptions of property and its indicia in the United States, Australia, the United Kingdom and Canada. This comparative analysis illustrates the distinct approaches being adopted to resolve the uncertain legal nature of statutory entitlements. Using emissions trading schemes as a case study, we explore how the diff erent property analyses adopted impact the rights and liabilities of parties as well as the functioning of statutory entitlement schemes.