Estimates of Future Supply of International Greenhouse Gas Offsets: A Critical Review

The report finds that projections for international greenhouse gas offset supply vary by billions of tons annually, with marginal abatement curve (MAC) based estimates being highly optimistic compared to those based on historical market trends. While gross supply is expected to exceed U.S. demand by 2020, net availability will be constrained by competition from other nations, developing countries' own mitigation commitments, and significant uncertainties in program design and market infrastructure.

• Estimates of international offset supply vary significantly depending on the methodology used. Studies relying on marginal abatement curves (MACs) as supply curves are highly optimistic; for instance, US EPA's MACs suggest 6.4 billion tons CO2e could be available annually from developing countries by 2020. In contrast, carbon market observers using historical trends estimate supply between 1.5 and 2.5 billion tons per annum.
• Gross international offset supply is projected to exceed the demand of U.S. entities under current Congressional cap-and-trade designs by 2020. Projected supply ranges from 1.5 to over 6 billion tons CO2e, while U.S. demand is estimated between 0.4 billion tons CO2e (CBO) and nearly 1.3 billion tons CO2e (US EPA) for the Waxman-Markey bill.
• The net supply of offsets available to the U.S. will likely be reduced by competition from other governments and entities with emission obligations, such as those in the EU. Additionally, mitigation measures undertaken by developing countries as part of their own contributions (e.g., NAMAs) could further constrain supply.
• There is a systematic difference between top-down and bottom-up modeling approaches for avoided deforestation. Bottom-up analyses tend to show greater abatement potentials at lower costs, whereas top-down models are better at accounting for supply and demand market interactions and transnational leakage.
• Many offset supply assessments fail to systematically consider critical program design and market factors. Key missing or under-analyzed elements include the stringency of crediting methodologies, the establishment of international governance structures, and the lag times required for the administrative and technical scale-up of crediting infrastructure.
• The report identifies that the lack of analysis regarding the interaction between future offset supply and the demands implied by future emission targets is a major weakness in international climate negotiations.

APA

Erickson, P., Lazarus, M., & Kelly, A. (2010). Estimates of Future Supply of International Greenhouse Gas Offsets: A Critical Review. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/SEI-ProjectReport-Erickson-EstimatesOfFutureSupplyOfInternationalGreenhouseGasOffsets-2010.pdf

Chicago

Erickson, Peter, Michael Lazarus, and Alexia Kelly. Estimates of Future Supply of International Greenhouse Gas Offsets: A Critical Review. Stockholm Environment Institute, 2010. https://www.sei.org/mediamanager/documents/Publications/SEI-ProjectReport-Erickson-EstimatesOfFutureSupplyOfInternationalGreenhouseGasOffsets-2010.pdf.

Wikipedia

{{cite report |last1=Erickson |first1=Peter |last2=Lazarus |first2=Michael |last3=Kelly |first3=Alexia |title=Estimates of Future Supply of International Greenhouse Gas Offsets: A Critical Review |publisher=Stockholm Environment Institute |date=2010 |url=https://www.sei.org/mediamanager/documents/Publications/SEI-ProjectReport-Erickson-EstimatesOfFutureSupplyOfInternationalGreenhouseGasOffsets-2010.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{erickson2010estimates, author = {Erickson, Peter and Lazarus, Michael and Kelly, Alexia}, title = {{Estimates of Future Supply of International Greenhouse Gas Offsets: A Critical Review}}, institution = {Stockholm Environment Institute}, year = {2010}, url = {https://www.sei.org/mediamanager/documents/Publications/SEI-ProjectReport-Erickson-EstimatesOfFutureSupplyOfInternationalGreenhouseGasOffsets-2010.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }