Energy Security and Climate Initiative

Energy Security and Climate Initiative Working Papers

Paper

Carbon Offsets, Reversal Risk and U.S. Climate Policy

July 2009, Yihsu Chen, Matthew D. Hurteau, Bryan K. Mignone and Brent Sohngen

One controversial issue in the larger cap-and-trade debate is the proper use and certification of carbon offsets related to changes in land management. Bryan Mignone, Matthew Hurteau, Yihsu Chen and Brent Sohngen show how reversal risk associated with such instruments could be properly internalized in a crediting framework and how this framework itself could be used to manage prices in the future carbon market.

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