Stefano Solari (University of Padova)
Coase, in his seminal 1960 contribution to the notion of social costs, introduced the idea of individual legal position, including a whole set of organizational and rule arrangements in which the allocation of resources takes place. This includes property rights in strict terms and general rules affecting the use of property, as well as the way governance of exchanges is organized. This is an explicit acknowledgement that property rights were intended by Coase as a far more complex notion than a simple, typical real right. The idea of transaction cost, which is a very synthetic notion, further highlighted the complexity of factors affecting the pursuit of economic interests. Research from the law side also contributed to study the legal position of the individual beyond the synthetic notion of property rights. Reich (1964, 1990b) underlined the conventional and interdependent nature of all economic socially defined engagements. Some years earlier, Grey (1980) developed the idea of bundle of rights, which allows individuals to sell off bits and pieces of a thing to various persons. This notion exploded the core of property rights. The literature that followed Coase (1960) developed these ideas in a set of instruments to analyse legal arrangements and the problems in the design of markets. This idea of legal position has been important for shaping markets of immaterial rights able to reallocate exploitation rights, as for the case of transmission frequencies. That has propelled new markets and eased the tradability of economic rights so that markets for pollution rights have been established. Governments have been able to steer markets to achieve specific targets. Recently, the European Trading Scheme has been extended to the control of carbon emissions. During the last year, the price of a ton of carbon passed from 9 to 50 euros. The aim of the paper is analysing the notion of individual legal position and its development in relation to the organisation of the European Trading Scheme in carbon emissions. It defines what is able to define a specific economic right and the limits of this approach. It studies how and to which extent this idea has produced new commodities, rights to perform certain actions, access rights, etc. Finally, it studies how such rights are organised in a market and highlights the advantages and the unresolved issues connected to this new market (ETS).