Offsetting in Mandatory Systems

Mandatory Cap-and Trade Systems

Mandatory cap and trade systems require entities in sectors regulated under the cap to account for their emissions, and then to achieve compliance with emission cap requirements through a combination of mechanisms including internal emission reductions, trade and purchase of emission allowances and/or purchase of offsets.

European Trading System (EU-ETS)
Australian Carbon Pollution Reduction Scheme
Canada’s Offset System for Greenhouse Gases
New South Wales Greenhouse Gas Reduction Scheme ( NSW GGAS)
Regional Greenhouse Gas Initiative (RGGI)
Western Climate Initiative (WCI)


Other Mandatory Systems

In addition to cap and trade systems, there are other mandatory systems that establish greenhouse gas (GHG) emission reductions targets for regulated entities. Unlike the cap and trade systems, these do not provide for emission allowances to be traded among regulated sources, but they do allow offsets to serve as a compliance mechanism to meet emission reduction requirements. Below are links to more detailed descriptions of the offset features of three such systems:

Alberta-Based Offset Credit System
US State Power Plant Rules (OR, WA, MA)
British Columbia Emission Offset Regulation