The European Union Emissions Trading System (EU ETS) is the largest mandatory programme of its kind. The entitlements in emissions allowances (emissions entitlements) combine public and private law characteristics: allowances are tradable, commercially valuable regulatory instruments. This dual nature reveals a new interdependency between public and private law mechanisms in the context of climate change policy. This article argues that achieving the requisite level of emissions reductions is contingent on the viability of the emissions market, and that both are dependent on the definition of emissions entitlements. This view is supported by a case study which identifies the practical and serious consequences of the absence of a legal concept of emissions entitlements. The United States (US) Acid Rain Program offers useful lessons on the treatment of emissions entitlements. They can be further defined by analogy with similar rights regimes. Their nature is highly relevant to the emissions market, particularly to the commercial contracts that constitute it.
