GHG offsets are a central feature of most regional and national cap-and-trade systems. A greenhouse offset credit represents a tonne of carbon dioxide equivalent (CO2e) reduced, avoided or sequestered by a project implemented specifically to compensate for emissions occurring elsewhere.

Several existing modeling studies estimate the technically and economically achievable supply of GHG offsets from uncapped sources in the United States. This article examines how the design of offset protocols – and the corresponding rules for eligibility, measuring, verifying and awarding offsets – might impact actual offset crediting and the realization of GHG mitigation potential.

The presented analysis demonstrates how rules for each of these factors could impact the supply of offset credits, as well as the emissions-reduction benefits of an offset program. Findings indicate that although lenient offset rules and protocols may bring several times more credits to market than a conservative approach, these gains in offset supply would come at a significant cost to the effectiveness of the cap-and-trade system in achieving its central purpose: reducing overall GHG emissions.

In particular, lenient rules and protocols could conceivably lead U.S. emissions to exceed legislative targets by as much as 500 million tonnes CO2e in 2020.

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