Graduation Year


Date of Submission


Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts


Environment, Economics, and Politics (EEP)

Reader 1

Serkan Ozbeklik

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This thesis examines the determinants of the usage of carbon offsets within the California cap-and-trade program for greenhouse gas emissions. It also investigates the relationship between a firm’s investment in offsets and its financials for publicly traded companies. Entity-level data from 2013 to 2020 was used, which was sourced from the California Air Resources Board. Multiple regression analysis was used to investigate factors that correlated with offset usage and whether offset usage correlated with EBITDA. Dummy variables indicating geographic location and economic sector of each entity were used as controls. The analysis found that total covered emissions and privately owned status were positively correlated with usage of offsets. This may suggest that profit-maximizing behavior is a determinant of investment in offsets. Future research could study the correlation between offset usage and market capitalization or demographic data.