Discussion Paper

International Greenhouse Gas Offsets Under the Clean Air Act

Apr 7, 2010 | Nathan Richardson

Abstract

Offsets, and in particular international offsets, have been advanced as an important tool in climate policy, capable of significantly reducing the costs of emissions reductions. As attention turns to theexisting Clean Air Act as a potential vehicle for general reduction of greenhouse gas emissions, an important question is whether regulation under the statute is compatible with international offsets. This paper analyzes the regulatory programs under the Clean Air Act that are the most likely candidates for greenhouse gas regulation and concludes that many of them are legally incompatible with international offsets. Those programs that might permit use of international offsets have other problems that make them unpopular choices for greenhouse gas regulation. To the extent that Clean Air Act regulation depends on state action, state law and constitutional limitations appear to offer more barriers than opportunities foruse of international offsets. These conclusions have implications for the costs and flexibility of climate policy under the Clean Air Act.