CARBON OFFSETS: EXAMINING THEIR -- CARBON OFFSETS: EXAMINING THEIR -- Contents -- Preface -- Carbon Offsets: The U.S. Voluntary Market Is Growing, but Quality Assurance Poses Challenges for Market Participants -- Why GAO Did This Study -- What GAO Recommends -- What GAO Found -- Abbreviations -- Results in Brief -- The U.S. Voluntary Market Is Growing Rapidly with Limited Federal Oversight -- The Market Includes a Range of Participants, Prices, and Transaction Types -- Project Developers Generate Offsets from a Wide Range of Activities -- The Scope of the Market Is Uncertain, but Supply Is Growing Rapidly -- The Federal Government Plays a Small Role in the Market -- Commodity Futures Trading Commission -- Department of Agriculture, Forest Service -- Department of Energy, Energy Information Administration -- Department of the Interior, U.S. Fish and Wildlife Service -- Environmental Protection Agency -- Federal Trade Commission -- U.S. House of Representatives, Office of the Chief Administrative Officer -- A Variety of Quality Assurance Mechanisms Are Available and Used, but Information on the Credibility of Offsets Is Limited -- Quality Assurance Mechanisms Are Available and Applied to Offset Projects, but the Extent of Their Use Is Uncertain -- Market Participants Face Challenges in Ensuring the Credibility of Offsets -- Information Provided to Consumers Offers Limited Assurance of Credibility -- Both Increased Federal Oversight and the Use of Offsets in Climate Change Policies Involve Trade-Offs between Cost and Credibility -- More Oversight of the Voluntary Market Involves Trade-offs between Credibility and Cost -- Offsets Could Lower the Cost of Future Mitigation Policies but Increase Uncertainty about Achieving Emissions Reductions -- Concluding Observations -- Appendix I: Objectives, Scope, and Methodology.

Appendix II: Description of Offset Project Types -- Appendix III: Volume and Number of Offset Projects by State in 2007 -- Appendix IV: Description of the Purchase of Carbon Offsets by the Chief Administrative Officer of the House of Representatives -- Appendix V: Summary of Stakeholder Responses to Interview Questions -- Appendix VI: Summaries of Selected International, Regional, and State Programs -- Appendix VII: Selected Carbon Offset Standards Appendix -- End Notes -- Measuring and Monitoring Carbon in the Agricultural and Forestry Sectors -- Summary -- Purpose of Measuring Forest and Agricultural Carbon -- Decisions Needed in Setting Measurement Requirements -- Scale and Baseline -- Periodicity -- Verification -- Measurement Techniques -- On-Site Measurement -- Indirect Measurement with Off-Site Tools -- Estimation Using Process Models or Inferences. -- Considerations for Congress -- End Notes -- Potential Offset Supply in a -- Cap-and-Trade Program -- Summary -- Mitigation Potential -- Policy Choices -- Economic Factors -- Emission Allowance Price -- Other Factors -- Introduction -- What Is a Cap-and-Trade System? -- Factors Affecting Offset Supply -- Mitigation Potential -- Elements of Uncertainty -- Competition for Land Use -- Bio fuel Production -- Estimates from Agriculture and Forestry Activities -- Mitigation Potential Estimates in Context -- Estimates from Other Activities -- Policy Choices -- Design of the Cap-and-Trade Program -- Scope of the Cap -- Eligible Offset Types -- Offset Protocols -- Set-Asides -- Actions in Other Nations or U.S. States -- Other Policy Influences -- Economic Factors -- Emission Allowance Price -- Other Factors -- Offset Use in a Cap-and-Trade Program -- End Notes -- Regulating a Carbon Market: Issues Raised by the European Carbon and U.S. Sulfur Dioxide Allowance Markets -- Summary -- Introduction.

The European Emissions Trading System (ETS) -- Background -- What is Regulated -- How Exchanges Are Regulated -- Lessons from the ETS -- The U.S. Sulfur Dioxide Trading Program (Title IV) -- Background -- Administering the Program: The Environmental Protection Agency (EPA) -- Allowance Accounting -- Allowance Auctions -- Interface with Electricity Regulation: The Federal Energy Regulatory Commission (FERC) and State Public Utility Commissions (PUCs) -- Background -- FERC Allowance Accounting -- State Public Utility Commissions -- Allowance Transactions -- Internal Transfers -- Over the Counter: Cash Market, Futures and Options -- Regulation of Allowances as an Exempt Commodity: Commodity Futures Trading Commission (CFTC) -- Definition -- Regulation of Trading Venues -- Lessons and Observations from Title IV Program -- Implications for a Future U.S. Carbon Market: Regulatory Issues -- An Efficient Trading and Pricing Mechanism -- Fraud and Manipulation -- Investor Fraud -- Inside Information -- Market Manipulation -- Transparency versus Confidentiality -- Concluding Remarks -- Appendix: Regulation of EU Emissions Exchanges -- European Climate Exchange (ECX) -- BlueNext -- Nord Pool -- European Energy Exchange (EEX) -- End Notes -- The Role of Offsets in a Greenhouse Gas Emissions Cap-and-Trade Program: Potential Benefits and Concerns -- Summary -- Introduction -- Offsets: An Overview -- Voluntary Offsets -- Offset Types and Examples -- Biological Sequestration -- Renewable Energy Projects -- Energy Efficiency -- Non-CO2 Emissions Reduction -- Policy Alternatives to Offsets -- Potential Benefits of Offsets -- Cost-Effectiveness -- Potential Co-Benefits -- Potential Benefits to Developing Nations -- Other Potential Domestic Benefits -- Potential Concerns -- Supplementarity -- Integrity Concerns -- Additionality -- Measurement -- Double-Counting.

Permanence -- Leakage -- Delay of Technology Development -- Transaction Costs -- Concerns in Developing Nations -- Considerations for Congress -- End Notes -- Sequestration of Carbon Dioxide Hearing - Kelly Testimony( -- National Mitigation Banking Association and Mitigation Banking -- Carbon -- Forestry Projects -- Conclusion -- Voluntary Carbon Offsets: -- Overview and Assessment -- Summary -- Introduction -- What Are Carbon Offsets? -- The Size of the Voluntary Carbon Offset Market -- Carbon Offset Integrity Issues -- Additionality -- Baseline Determination -- Double Counting -- Permanence -- Carbon Offset Types and Potential Integrity Concerns -- Biological Sequestration -- Renewable Energy Projects -- Energy Efficiency -- Reduction of Non-CO2 Emissions from Specific Sources -- Supplementarity -- Assessment of Carbon Offset Sellers -- Congressional Activity -- Conclusions -- End Notes -- Chapter Sources -- Index.