4 August 2010: The Organisation for Economic Co-operation and Development (OECD) has released a paper in its Environmental Working Papers series titled “Buying and Cancelling Allowances as an Alternative to Offsets for the Voluntary Market – A Preliminary Review of Issues and Options.”

Authored by Anja Kollmuss and Michael Lazarus, this working paper deals with voluntary purchasing of carbon credits to remove them from the market. It discusses two situations in which an actor would do this: when one is interested in “tightening the cap” of a national cap and trade system; and one where an actor reduces its own emissions and subsequently buys credits to ensure others are not permitted to increase their emissions as a result. The paper further explores cases where these practices are already an option, including: the EU’s Emissions Trading Scheme (EU ETS); the Regional Greenhouse Gas (GHG) Initiative in the US; and the SO2 market under the US Acid Rain Program. [The Working Paper]