Insurance covers invalidation of Calif. carbon offset credits

Parhelion Underwriting Ltd. has partnered with the Climate Action Reserve, which is the Los Angeles-based carbon offset registry for North America, to offer insurance products for California’s Cap-and-Trade program for greenhouse gas emissions.

The product provides coverage against invalidation of compliance offset credits that were transitioned from credits issued by the Climate Action Reserve, London-based Parhelion, which specializes in environmental and energy insurance, said Wednesday in a statement.

“Invalidation of offset credits has been a concern for the market, especially for compliance buyers,” Gary Gero, president of Climate Action Reserve, said in a statement. “While the reserve has a well-established reputation for its knowledge and experience in reviewing offset projects and ensuring that offsets have real environmental integrity, we are always looking for ways to further protect our account holders and market participants.”

Policy limits are based on the volume and monetary limit of the offsets. Called Parhelion California ARB Offset Credit Invalidation, the insurance program covers California Environmental Protection Agency Air Resources Board offset credits that were transitioned from reserve-issued registry offset credits or early action offset credits.

For more information, contact Julian Richardson of Parhelion at JHR@parhelion.co.uk.