Why Not Carbon Offsets?
While there are some reliable carbon offsets available for purchase – landfill methane reduction projects in particular can provide verifiable, additional CO2 reductions – a vast number of voluntary carbon offsets are riddled with accountability hurdles. The hurdles are numerous and, among other problems, include double-counting, verification, additionality, and simple outright fraud. These problems crippled the effectiveness of the Clean Development Mechanism in the Kyoto Protocol and caused the collapse of the once-largest global carbon market, the Chicago Climate Exchange. For a detailed and well-referenced description of the problems plaguing traditional voluntary carbon offsets, see here.

Why Not RECs?
The market for, and veracity of, RECs is superior to carbon offsets. RECs tend to be individually serial numbered, domestic, and easy to verify. For the most part there is not fraud. There is, however, an additionality hurdle for RECs. Many renewable energy projects that sell RECs would have been built without the RECs. This is not entirely bad – the RECs make the renewable energy developers more profitable, which absolutely encourages more renewable energy development – but it does mean the carbon value from RECs is not necessarily 1:1.

Why Carbon Allowances?
In 10 States in the US every power plant is required by law to purchase one permit for every ton of CO2 it emits. The permits are sold at open quarterly auction, and the number of available permits is fixed; any party that buys and permanently removes permits from the market causes one ton fewer of CO2 emissions to be emitted per permit. Participation in these markets is not voluntary; power plants caught operating without permits are fined heavily by the State governments. Enforcement is rigorous, and State governments have raised $3bb+ in revenue from the auctions and see them as a significant source of revenue. Every permit is individually serial coded, there are no international offset projects, and each permit is tied to one ton of CO2 reductions.

Why Carbon Lighthouse Association?
Carbon Lighthouse Association is a 501c3 not-for-profit entity, and the only non-bank / non-power plant to regularly participate in the two US markets for carbon allowances (RGGI on the East Coast, and California’s AB32). 100% of proceeds are used to purchase and eliminate carbon allowances, or operate the non-profit. Currently the non-profit’s administrative burden is <2% of proceeds.