June 14, 2009.  Carbon-emission caps are financially dangerous, so their designers build in "safety valves" one way or another. The EPA has found that Waxman's cap will cut our emissions 39% instead of the claimed 83%. But even that ... is optimistic because EPA analyzed the draft bill which allows 1 billion foreign offsets, and that has now been amended to 1.5 billion.

Foreign offsets are the biggest loophole, and they have several drawbacks. First, the money paid for allowances can be recycled to consumer dividends, green investment, or to pay off the national debt. Not so with the $16 to $71 billion a year we will be sending to China or wherever.

But, if offsets are a cheaper way to reduce carbon, then it might be worth it. But the foreign offset programs tend to be corrupt. Even the Danish company that serves as the U.N.'s most trusted watchdog got suspended for not watching last December. But what's worse is that China and all developing countries will think, "If we commit to a cap or a carbon tax, we will need all our best offset projects to meet our own commitment and we so that will cut into our offset profits." This is one reason developing countries will not make binding commitments.  source