Abstract
The New Zealand Emissions Trading Scheme (‘NZ ETS’) does not create private property rights in either the atmosphere or greenhouse gases. Neither does it confer a private property right to emit greenhouse gases. Rather, it employs a very restricted private property right that can only be used for an extremely limited range of purposes. In particular, the primary purpose of the private property right at the heart of the regime is simply to enable its holder to discharge a liability that arises as a consequence of undertaking activities that result in greenhouse gas emissions. This observation is important because it addresses the criticism that environmental management regimes which employ private property to solve the tragedy of the commons actually create ‘rights to pollute’. The structure of the NZ ETS neatly avoids creating such a right and this suggests that the risks associated with using private property as a tool of environmental management can be ameliorated. More generally, the way the NZ ETS utilises private property indicates that private property itself may be far more flexible than is often acknowledged. This may provide a further source of support for a number of modern property law theories that stress private property’s essentially social function.