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Understanding the Voluntary Carbon Market: Why Companies Buy Carbon Credits, Why the Volunta…

May 2009

<i>Bloomberg Law Reports — Sustainable Energy</i>

William A. Tanenbaum, Partner and Chair of the Technology, Intellectual Property & Outsourcing Group and member of the GreenTech and Sustainability Group, and Sapna W. Palla, Counsel and member of the GreenTech and Sustainability Group, authored a featured article in the May 2009 issue of Bloomberg Law Reports on Sustainable Energy. "Understanding the Voluntary Carbon Market: Why Companies Buy Carbon Credits, Why the Voluntary Market Will Coexist with Future Mandatory Regulation, and Why Contracts Should Allocate Carbon Credit Ownership" addresses the eight principal reasons why companies voluntarily buy carbon offset credits in the U.S. when they are under no legal obligation to do so. It also addresses why the voluntary carbon market will continue, and will remain commercially important, even if proposed federal cap-and-trade mandatory greenhouse gas emission control legislation is enacted. In addition, the article addresses why many commercial agreements likely will include provisions allocating carbon credit ownership and trading rights in the near future, and how existing business models based on old assumptions will be revisited in light of the cost of buying carbon credits.

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