For example, a hypothetical offset provider could generate a given number of carbon offsets, then sell those same offsets to multiple buyers. If the offsets or their sale are not registered with a reliable third party, it may be very difficult detect that multiple sales have taken place.

Alternatively, a hypothetical utility company could build a wind power plant to comply with regulatory requirements, distribute the resulting electricity to consumer at a higher cost as “green power” and finally sell RECs from the project in the voluntary offset market.

This hypothetical company would thereby be claiming credit for the same avoided emissions three times:

• Once, by using them to comply with regulations.
• Twice, by charging consumers higher prices for clean energy.
• Three times, by claiming and selling RECs from the project.

In order to prevent the double counting of emission reductions:

• Offset companies should register and retire their offsets once they sell them.
• Carbon offsets generated from renewable energy projects should not also be sold as Renewable Energy Credits.
• Projects carried out to meet regulatory requirements (like renewable portfolio standards) should only generate RECs for reductions beyond compliance.