An emissions trading scheme is likely to be an important component of the post-Kyoto global regime for reducing greenhouse gas emissions, primarily for economic reasons. Like most tradable permit schemes that have thus far been adopted, notably in the United States and Europe , it is expected that a global greenhouse gas emissions trading scheme will be based on the ‘grandfathering principle’, allocating entitlements to emitters on the basis of existing\ud levels of emissions. The paper argues against this common practice as being ethically problematic and, more broadly, that the desirability of tradable permit schemes depends in\ud large part on how social and political implications have been incorporated into their design. A case is made for the allocation of emission entitlements on an equal per capita basis to all individuals, but for the management of entitlements by specially designated community bodies\ud (Community Carbon Trusts) on behalf of citizens. Such an approach, based on the notion of ‘individuals-in-community’, is not only ethically more defensible, but also has the potential to enhance local/regional capacity to mitigate and adapt to climate change, to promote\ud sustainable development, and to enhance democracy, without compromising the economic rationale (cost-efficiency) for the adoption of emissions trading.\u
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