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

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. This primer provides an initial rough assessment of the intersection of the offsets and performance standards provisions. Because in-depth quantitative analysis of this question is not possible at this time, it is simply a first attempt to explore which parts of the offsets supply could be affected.