Most market-based regulatory proposals to limit GHG emissions include provisions that allow market participants to seek reductions outside the regulated system. These reductions are typically referred to as offsets.
Offsets are attractive because they can expand the available pool of low-cost reduction options, particularly in the near future. Many potential offset projects, however, present challenges because the emissions reductions they generate are difficult to measure or, in the case of sequestration, carry risks of impermanence. The challenge is to design an offset program that incentivizes reductions while also ensuring their integrity.
Forest Carbon Index
Will REDD Really Be Cheap?Allen BlackmanResources, Winter 2010
Offsets: Incentivizing Reductions While Managing Uncertainty and Ensuring IntegrityDaniel S. HallAssessing U.S. Climate Policy OptionsIssue Brief #15
Conserving the Climate: Scaling-up Global Markets for Forest CarbonNigel Purvis, Erin MyersIssue Brief 08-02
Policies to Reduce Emissions from Deforestation and Degradation (REDD) in Tropical Forests: An Examination of the Issues Facing the Incorporation of REDD into Market-Based Climate PoliciesErin C. MyersDiscussion Paper 07-50
Key elements andtargets of ClimateChange Bills Introducedin the 111th Congress
Emission Allowance Allocations Under The American Power (Kerry-Lieberman) Act (.xls)