Stacking Opportunities and Risks in Environmental Credit Markets
Environmental credit markets for mitigating impacts to wetlands, endangered species, water quality, and carbon emissions have been established throughout the United States. Recently, there has been much debate about whether a conservation project should be allowed to produce credits for multiple markets, a practice broadly referred to as credit stacking. But producing stacked credits for multiple markets using one conservation action is not itself controversial; rather, it is the resulting transactions—the sale or transfer of the stacked credits—that can be contentious. Agency rules regarding the relationship between environmental credit markets are not clear and sometimes conflicting. Despite this, projects are moving forward that establish frameworks for selling stacked credits. To reduce uncertainty for both ecosystems and markets, it is critical to establish coordinated policies and regulations to ensure that environmental mitigation markets result in real, verified, and additional mitigation, especially when credit stacking is involved.