I filed these comments with the California Air Resource Board after their preliminary determination to invalidate credits generated by the Clean Harbors facility that destroyed ozone depleting substances. After the California Air Resource Board moved forward with a smaller invalidation, Ecosystem Marketplace’s Despite Market Outcry, California Voids Some Carbon Offsets article quoted me:

“It’s not good news, but I don’t think it’s market-destroying news either,” said Peter Weisberg, Program Manager, The Climate Trust….The ARB should consider alternatives to buyers’ liability such as a buffer account to cover these types of losses, Krausse, Weisberg and other stakeholders suggested. Quebec – the Canadian province partnering with California on carbon trading via the Western Climate Initiative – established a buffer pool that sets aside 4% of offsets to cover reversals or invalidations. In discussions with Oregon and Washington, which are both considering options to comply with upcoming federal carbon regulations, Weisberg has encouraged them to follow Quebec’s model or the approach of voluntary standards in ensuring offset integrity rather than California’s approach. However, he also noted that there are potential solutions to the risk created by California’s buyers’ liability provisions, including insurance policies designed specifically to cover the invalidation risk. “It’s definitely an unfortunate risk,” he said. But “we still think this is a risk that can be managed.”

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