1 An Overview of Carbon Offsets from Agriculture Jimena González-Ramírez 1 , Catherine L. Kling 2 , Adriana Valcu 3 This research is part of a regional collaborative project supported by the USDA-NIFA, Award No. 2011-68002-30190, “Cropping Systems Coordinated Agricultural Project (CAP): Climate Change, Mitigation, and Adaptation in Corn-based Cropping Systems.” The authors also appreciate support from a Cooperative Agreement with USDA, Economic Research Service “The supply of greenhouse gas offsets from agriculture and their water quality effects in the Upper Mississippi River Basin.” Keywords: GHGs, carbon policy, conservation practices, carbon supply curves, additionality, leakage. Abstract While climate change has largely been removed from the federal policy agenda of the United States in the near term, the continued reliance on fossil fuels as a dominant energy source leaves many analysts to conclude that climate policy will eventually reappear on that agenda. We present a review of recent research related to the design and implementation of one instrument for greenhouse gas (GHG) reduction: offsets. As these are implemented, policy makers must understand the way these programs work. In this review, we describe the basic features of carbon offset markets, along with the potential supply of offsets from agricultural sources and associated cost considerations. In this discussion we highlight the role of institutional design of contracts and transactions costs. We then turn to the benefits of including offsets in policies to reduce GHGs and complete the review with a discussion of the challenges in implementing the programs. 1. Introduction 1 Graduate Research Assistant, Department of Economics, Iowa State University; email: majimena@iastate.edu 2 Professor of economics at Iowa State University and head of the Resource and Environmental Policy Division at CARD; email: ckling@iastate.edu 3 Graduate Research Assistant, Department of Economics, Iowa State University; email: amvalcu@iastate.edu