Outside The Cap

This policy brief by the World Resources Institute discusses the design of carbon offset programs within a cap-and-trade system, specifically focusing on the challenges of quantifying and verifying reductions from uncapped sectors to ensure the integrity of greenhouse gas (GHG) caps.

• Carbon offset programs must employ strict quantification, verification, and enforcement standards to prevent the compromise of greenhouse gas (GHG) caps. Certain mitigation activities, particularly those involving forest or soil carbon sequestration, are less likely to meet these rigorous criteria than other types of projects.
• While offsets can lower costs and increase compliance options for a U.S. cap-and-trade program, they are not the only way to reduce emissions in uncapped sectors. Policymakers should evaluate offsets alongside other tools, such as subsidies or complementary regulations like GHG performance standards.
• The document argues that policymakers should prioritize the most efficient means of achieving GHG reductions over the maximal inclusion of offset options. This means excluding reductions from offset programs if they can be achieved more cost-effectively through different policy mechanisms, as the costs of overcoming certification challenges for some projects may be avoidable.
• When designing a U.S. carbon offset program, policymakers are advised to determine acceptable levels of uncertainty regarding measurement, baselines, and leakage, and to establish mechanisms for compensating for reversals in carbon sequestration.

APA

World Resources Institute (n.d.). Outside The Cap. https://www.wri.org/research/outside-cap

Chicago

World Resources Institute. Outside The Cap. n.d. https://www.wri.org/research/outside-cap.

Wikipedia

{{cite report |author=World Resources Institute |title=Outside The Cap |url=https://www.wri.org/research/outside-cap |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendoutside, author = {{World Resources Institute}}, title = {{Outside The Cap}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/outside-cap}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }