GHG Reduction Strategies as Potential "Offset Credits"

Focus Area

Climate Change


Air Quality, Environmental Process







Research Idea Scope

Current climate change legislation before the US Congress includes provisions for a cap and trade program, where the government guarantees emissions reductions by setting a mandatory cap on aggregate emissions below the existing pollutant levels, and providing sources covered under the cap emission allowances equal to the cap that can be bought or sold (traded). The emissions cap declines over time until the desired aggregate emissions cap is achieved. Such cap and trade programs typically include an offset feature that allows covered sources to meet their mandatory cap by using emission offset credits. An emissions offset is a credit for “additional” emission reductions not required by an emission cap or any regulatory program. 
Several strategies have been identified for reducing GHG emissions resulting from mobile transportation sources (e.g., improving operational efficiency, reducing VMT and travel demand via pricing, increasing transit usage, promoting modal shifts, freight operations and enforcement). Some of these strategies, and the associated systems and infrastructure improvements, might be appropriate as offsets that entities (e.g., utility companies) operating under the cap and trade program can “purchase”, thereby providing a potential funding source for these transportation strategies.
This research will investigate the processes, procedures and information required for transportation improvements to qualify as emission offsets. In general, to qualify as an emission offset, the reduction must be real, permanent, quantifiable, enforceable, and in addition to any cap or regulatory requirement. The necessary protocols, appropriate models for estimating the GHG reductions, and the technologies for monitoring and measuring the GHG reductions will also be examined, along with the overall cost-effectiveness of having a transportation project qualified as an offset.
Related Work
·        Cap and trade programs as defined in Waxman-Markey (House) and Kerry-Boxer (Senate)
·        European Union Emission Trading Scheme
·        Moving Cooler report
·        NCHRP 20-24 (59), “Strategies for Reducing the Impacts of Surface Transportation on Global Climate Change:   A Synthesis of Policy Research and State and Local Mitigation Strategies”
Depending on the final form of the climate change legislation, the results of this effort could be very important and useful in documenting the necessary procedures and protocols for identifying appropriate projects and then qualifying these transportation projects as offset credits, thereby providing additional funding sources for deploying and operating transportation improvements.

Urgency and Payoff

The results of this project would be used by owners of transportation infrastructure and systems, in cooperation with MPO’s and trade associations, to identify transportation projects that might qualify as offset credits in the carbon markets, to determine the cost – effectiveness of pursuing this option, and to follow the necessary protocols and procedures for qualifying such projects as credits.  
EffectivenessThis research would promote a greater understanding in the transportation community regarding cap and trade mechanisms and the potential of promoting transportation improvement projects as offset credits. Given the potential complexity of the protocols and procedures in qualifying projects as offset credits, coupled with the uncertainty of carbon market pricing (e.g., cost per metric ton of CO2), such information would be critical before pursuing this potential funding source.

Suggested By

RNS. Sponsoring Committee: A0020T, Special Task Force on Climate Change and Energy Source Info: Special Task Force on Climate Change & Energy January 2010 Workshop