Does the bills cap and trade program allow US domestic offsets?
Yes. The bill authorizes up to 1 billion tons annually of domestic offsets, with rigorous per-entity limitations on the percentage of domestic offsets. The bill authorizes the U.S. Department of Agriculture (USDA) to establish a program for determining baselines, additionality, leakage, and other requirements for U.S. domestic offsets. What terms does the bill set for other nations to gain access to the U.S. carbon market? The bill allow up to 1 billion tons annually of international offsets to come into the U.S. carbon market, with rigorous per-emitter limitations on international offsets. The limit may be increased to 1.5 billion tons if insufficient domestic offsets are available. While international offsets will trade at 1:1 through 2016, starting in 2017 emitters must tender 5 international offsets for every 4 tons of U.S. compliance. According to the Committee, this trading ratio will reduce carbon emissions by up to an additional five percentage points below 2005 levels by 2020.
