What are the concerns about incorporating offsets into a cap-and-trade system?
Concerns associated with the incorporation of offsets into a cap-and-trade system include:[6] Damage to the integrity of the cap. If offsets are not real and additional reductions in emissions or increases in sequestration, they will not maintain the environmental integrity of the program and may undermine the carbon market linked to the offsets program. As a result, offsets policies often include approaches for addressing issues of additionality, leakage, and impermanence. While greenhouse gas accounting is straightforward and easy to verify for some activities, for others it is much more complicated. Unfortunately, the complicated activities also tend to be the ones with the greatest mitigation potential, especially in the case of domestic offsets. Diverting attention from fossil fuel reductions. Offsets in a cap-and-trade system are intended to increase flexibility for compliance, thus reducing overall costs of compliance. One concern is that allowing capped entities to use offsets
