Idea In Brief
The Problem
Markets for carbon trading function poorly, and many traded offsets do not actually perform as promised.
Why It Happens
Without robust protocols for monitoring offsets and in the absence of proper accounting mechanisms, market-based approaches to reducing atmospheric GHG will be vulnerable to misrepresentation and fraud.
The Solution
This article presents an accurate and auditable accounting framework based on five accounting principles. The first two define what can and cannot be counted as an offset and what may or may not be traded. The remaining principles set out basic accounting guidelines for offsets.