Given widespread public concern about global warming, the U.S. is moving to adopt absolute constraints on overall carbon emissions, most likely coupled with a cap-and-trade system that will provide opportunities for the trading of validated emission reductions. Congress is actively engaged on the issue, with both Senate and House leaders promising to pass climate change legislation that includes mandatory limits on emissions and market-based mechanisms for achieving emissions reductions. California already has enacted legislation that constrains carbon emissions, and state officials are working to design a market-based system. 

Many businesses and individuals are taking action to voluntarily reduce their carbon footprint by making investments in projects that offset emissions they cannot avoid. A growing retail market has developed in the U.S. for these carbon offsets, driven by the desire to become carbon neutral. In addition, as Congress, California, and other jurisdictions consider (or, in the case of California, begin to implement) regulatory constraints on carbon emissions, legislators and policymakers are evaluating what role carbon offsets should play in a market-based regulatory system. 

To further explore these carbon offset issues, the Stanford Woods Institute hosted a two-day workshop with environmental researchers and leaders from the public and private sectors. Led by Woods Visiting Professor David Hayes, participants examined a range of issues including: identifying the appropriate balance between requiring primary emissions reductions by regulated entities and allowing such entities to generate credits from carbon offset projects; and establishing a statutory and/or regulatory approach for defining the rules and standards, and the validation and enforcement mechanisms, that should govern the use of carbon offsets as part of a mandatory carbon scheme. By December 2007, the Stanford Woods Institute will release a white paper that summarizes key points raised during the dialogue and sets forth legislative and administrative recommendations for addressing carbon offsets. 

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Getting Credit for Going Green