Carbon Offsets and Environmental Impacts: NEPA, the Endangered Species Act, and Federal Climate Policy

Carbon offsets have been an integral part of recent climate policy proposals, but there are questions about how a carbon offsets program would interact with existing environmental laws. Laws such as the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA) require federal agencies to assess the potential impacts their actions would have on the environment. Such assessments can be lengthy and time consuming, and they could delay the establishment of an offsets program or the approval of individual projects. This paper examines how the type of offsets program proposed in recent climate legislation would be affected by the requirements of NEPA and the ESA. The authors suggest a range of policy options that would allow an offsets program to address any potential conflicts with these laws, while still meeting their requirements.