Abstract
The legal institution of carbon trading, introduced by the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC), is expected to provide a cost-effective way of GHG reduction in the Annex I Countries. Article 2(1) of the Kyoto Protocol clearly defines that the main purpose for the Annex I Countries taking actions in achieving their individual quantified emission limitations and reduction commitments is to promote sustainable development of these countries. However, whether the carbon trading introduced by the Kyoto Protocol qualifies to do so is still under debate. This thesis demonstrates the legitimacy from the development of international environmental norms and the applicability from the theory of a tradable pollution permits scheme. The thesis proves that the carbon trading can promote sustainable development only when certain conditions are fulfilled. After illustrating the relationship between carbon trading and sustainable development, the thesis investigates five typical legal institutions of carbon trading; two are under UNFCCC while the others are not. From the comparative law, the thesis endeavors to establish a framework of feasible legal institutions, which is in compliance with the rule of law and in observance of a sustainable development perspective. In the end, the thesis, by means of the framework, checks two potential legal documents for building domestic legal institutions: “the Air Pollution Control Act” and “the Draft Greenhouse Gas Reduction Acts.” The finding described in this thesis provides useful information for building a feasible legal institution of carbon trading in Taiwan.