Greenhouse gas offsets are an established climate policy option. The market for project-based carbon emission reductions has been under development for the past 15 years. The Kyoto Protocol, the European Union Emissions Trading System, the Regional Greenhouse Gas Initiative and Oregon's Carbon Dioxide
Standard are just a few examples of regimes that are using carbon offsets as part of an overall greenhouse gas reduction strategy.
In the US, greenhouse gas offsets have begun to play a substantial role in existing and proposed regulations. Oregon began requiring new power plants to offset part of their CO2 emissions in 1997. California's Assembly Bill 32 requires regulations be promulgated by 2012 that mandate emission reductions from the electrical, industrial and commercial sectors. At the regional level, RGGI allows an entity to use offsets to meet approximately 50 per cent of the required emissions reductions (or 3.3 per cent of total emissions). At the national level, the Climate Change White Paper issued by Senators Domenici and Bingaman includes a discussion about an offset pilot program, and the reintroduced McCain-Lieberman Climate Stewardship Act allows entities to use offsets for up to 30 per cent of their required reductions.
The first regulation of a greenhouse gas in the US occurred with the state of Oregon's Carbon Dioxide Standard, passed by the Oregon Legislature in 1997. The Oregon Carbon Dioxide Standard requires that new power plants built in the state offset a portion of their CO2 emissions in order to obtain a site permit. To accomplish this, the power plants pay money on a fee-per-ton basis to The Climate Trust, a Portland-based non-profit that uses the money to buy offsets from greenhouse gas reduction projects. The Climate Trust has assembled one of the largest portfolios of regulatory grade carbon offsets in the country, and has earned a national and international reputation as a leader in offset quality.
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