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marketplace, accelerating and deepening the housingcrash. For renewables, the economic crisis of 2008-2009spells a transition from the equipment shortages endemicduring boom years that preceded it to supply-chain glut inthis climate of credit shortage. Supply of commoditiessuch as silicone have increased in the face of risingdemand, likely leading to great decreases in price.So how do we double renewable energy? The mostimportant action is policy implementation, especially theloan guarantee program, transmission permitting, and, toa lesser extent, the Stimulus Grant Program offered in lieuof the ITC. Also key to the health of the sector is newpolicy—whether it be an RES or carbon tax. Lastly, capitalavailability has to be present to see any substantialinvestments take off.Environmental Offsets andCreditsDeforestation is the second largest contributorto global carbon emissions behind only thepower generation industry.Founder of Canopy Capital Limited, MichaelNaylor conveyed that tropical rainforests cover1.2 billion hectares of land, an area larger thanEurope, and store a quarter of all the carbon onland. Every day, deforestation emits CO2 equivalentto 12.5 million people flying from New York toLondon. Tropical deforestation emits about 1.5billion tons of carbon each year—more than theentire global transport sector. Every year,deforestation emits the same amount of CO2 as580 mid-size coal-fired power stations, equivalent tothe total annual CO 2emissions of the US or China.Unless action is taken, the impact of forestemissions on climate change will cost around $1trillion a year by 2100.Carbon Financing and TradingThe current financial crisis is fosteringstructural, behavioral, and regulatory changes.Michael Zimmer of Thompson Hine LLPcalled for the financing of companies,innovation and technology–not just projects.Among other changes, internationaldiversification of industry is undermined, andtherefore many non-US markets have fallenworse than US markets. When liquidity is deepand credit available, developing economiesthrive. With such velocity and credit constraints,those developing markets fall harder. Look forvalues of risk modeling and ratings agencies todiminish in value. Sophisticated risk modelinghas experienced its downfall for derivatives,dynamic hedging. Consolidation in industry andfinancial sector concentration will become morepowerful. Loss of investment bank capacity,financial innovation and smaller, medium-sizedinstitutions will mean higher interest rates andfees. Financial concentration means differentscale, aversion to smaller projects like renewables,and increased conflicts of interest withcontinued price volatility. Managing multipleroles in securities underwriting, carbon trading,lending, investing, secondary market developmentand money management will prove daunting.The lack of a common American standardmakes defining an offset and following theguidelines set forth even more important.A carbon offset credit (or “offset”) is an instrumentreflecting the value of the direct reduction, avoidance orsequestration of a unit of carbon dioxide equivalent (CO 2e)that is generated from an unregulated sector or facility.Certain common attributes that define a high-value offset:• Additional – A project must not be required byany regulatory or legal mandate and shouldclearly be beyond “business as usual”.• Permanent – Emission reductions must bepermanent and appropriate contingenciesshould be instituted for sequestrationprojects that carry a risk of reversal.• Real – Tradable offset credits should only beawarded after emission reductions haveoccurred.• Verified – At inception, projects, baselines,and protocols should be reviewed andapproved by an independent third-party.American Council On Renewable EnergyExecutive Summary Report 47