The Effects of Performance Standards on Offsets Supply Under H.R. 2454

Nicholas Institute Discussion Memo on H.R. 2454 American Clean Energy and Security Act of 2009

Author(s): David Cooley, Lydia Olander, Brian Murray

Published: August 2009

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The American Clean Energy and Security Act (H.R. 2454), recently passed by the House, contains potentially contrasting provisions for uncapped activities: offsets for the cap-and-trade program and regulatory performance standards for stationary sources.  If performance standards regulate uncapped activities that would otherwise be allowed to produce offsets, the standards could impact offsets supply.  The magnitude of the impacts, however, will depend on how the standards are set.