Climate Change Issues: Options for Addressing Challenges to Carbon Offset Quality

Carbon offsets are reductions in greenhouse gas emissions in one place to compensate for emissions elsewhere. Examples of offset projects include planting trees, developing renewable energy sources, or capturing emissions from landfills. Recent congressional proposals would have limited emissions from utilities, industries, or other "regulated entities," and allowed these entities to buy offsets. Research suggests that offsets can significantly lower the cost of a program to limit emissions because buying offsets may cost regulated entities less than making the reductions themselves. Some existing international and U.S. regional programs allow offsets to be used for compliance with emissions limits. A number of voluntary offset programs also exist, where buyers do not face legal requirements but may buy offsets for other reasons. Prior GAO work found that it can be difficult to ensure offset quality--that offsets achieve intended reductions. One quality criterion is that reductions must be "additional" to what would have occurred without the offset program. This report provides information on (1) key challenges in assessing the quality of different types of offsets and (2) options for addressing key challenges associated with offset quality if the U.S. adopted a program to limit emissions. GAO reviewed relevant literature and interviewed selected experts and such stakeholders as project developers, verifiers, and program officials. This report contains no recommendations.