Department of Forestry Forest Carbon and Climate Program

Cap-and-Trade Voluntary Market An overview of a business’ voluntary purchase of allowances or offsets to meet an individually-set target for emissions.

Carbon Offset Cycle: Offsets represent emission reductions that have been achieved outside of the capped sector

Equation for Creating Credits: This is a simple representation of the formula used to create carbon credits.

Tragedy of the Commons: An overview of how perceived costs and benefits create individual rational decisions that lead to collective irrationality.

Cap-and-Trade Market Activities and Offsetting: Forestry activities that increase the carbon dioxide absorption of forests include afforestation, reforestation, active forest management, or avoided deforestation.

Cap-and-Trade Involuntary Market: An overview of a business’ required purchase of allowances or offsets to meet a mandated GHG emissions allowance.