Turned Offset

Leading banks suggest regulation of carbon-offset market

Not long ago, the phrase "carbon offset" was a kind of magic. Investing in far-off green projects, the thinking went, made up for emissions at the source. Poof! But complications arose, and now a group of more than 10 major banks wants to move toward regulating the market -- at least the voluntary offsets that aren't government-regulated. The standards floated by the cabal -- including Morgan Stanley, Citigroup, and Deutsche Bank -- would cover such basics as making sure emissions cuts are "measurable, verifiable, and permanent" and keeping credits from being sold more than once. "We need to prevent confusion and ensure that there is public confidence," says Imtiaz Ahmad, VP of European Carbon Investors and Services. The banks also need to get their act together before a U.S. carbon-trading market emerges, which many expect to happen post-Bush. Said one trader: "The E.U. emissions trading scheme is going to look like a sideshow to the U.S. and other embryonic programs in a few years' time."