Document Type


Publication Date

Winter 2014


California is implementing the most comprehensive global warming regulatory program in the United States. A key part of this program is its cap-and-trade system. Integral to the cap-and-trade requirements are provisions for offsets, whereby companies, to meet their caps, can purchase credits from certain unregulated entities whose activities are deemed to have resulted in real and additional emission reductions. California has attempted to avoid the Kyoto Protocol's project-by-project lengthy and problematic review of offsets with a performance standard approach for domestic offsets and a sector approach for international offsets. Offsets, even if done right. raise serious environmental justice questions as to who will benefit and who will be harmed as offsets are granted. California's approach, however. also raises questions about how real these offsets will be, which has already lead to litigation. International offsets are even more troublesome. California needs to reconsider its approach and further limit the availability of these offsets if the program is to have integrity, achieve its goals and avoid environmental justice concerns.

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