"It's like the wild west"

This lengthy piece in CFO Magazine makes a solid case for buying carbon credits now, on the cheap, in anticipation of rising prices for carbon credits in a few years when regulation looms. It sounds like most of the executives they spoke with see plenty of room for a voluntary market once the caps are in place and expect to use their purchased credits to meet required cuts.

But here's the rub: Everyone seems to agree the available credits vary wildly in quality and obviously doubt many of them will qualify under the eventual cap-and-trade. That should be obvious to anyone who's done much research into the current batch of sellers of carbon credits and the prices they charge.

This demand in cross-border CO2 projects has led to problems. Stories have already appeared in The Financial Times and elsewhere about manufacturers in India purposely building factories with excessive greenhouse-gas emissions so they can sell the reduction credits. In addition, several reports have documented cases in which sellers of credits have miscalculated carbon baselines, thus bumping up CO2 reductions. "You've got guys saying, 'Hey, we'll get you an offset if you give us some money,'" says Clean Air Watch's O'Donnell. "It's like the Wild West."

The article and the executives and specialists quoted are particularly tough on reforesting projects - don't tell the Super Bowl organizers.