Some investment firms, utilities and other stakeholders want to be able to trade carbon offsets created by more energy efficient buildings, refrigerators, and\/or light bulbs in the developing cap-and-trade market. Others, however, question that strategy and point to the complexities involved in measuring the avoided global warming emissions resulting from energy efficiency measures. What role, if any, should energy efficiency play in a greenhouse gas cap-and-trade market was debated during a February 26-27 international conference on greenhouse gas emissions trading schemes in San Francisco. \u201cEnergy efficiency\u2019s role in mitigating greenhouse gas emissions is beyond doubt. But, the jury is still out\u201d on whether to make it a key part of carbon trading, said David Nemtzow, energy consultant, during the Carbon America Conference. \u201cWe must consider the analytical, political and administrative burden in setting up efficiency offsets,\u201d he added. In order for carbon offsets produced by efficiency measures to qualify as tradable emission offsets several hurdles must be overcome, according to experts. First, stakeholders say there must be proof that the actions actually saved energy and reduced greenhouse gases. The second hurdle is showing that the resulting energy conservation did not occur as part of \u201cbusiness as usual\u201d and would have been implemented regardless of climate protection requirements. That is, the so-called \u201cfree rider\u201d concept. That business as usual theory could apply to California\u2019s AB 32 law that aims to curb greenhouse gases, federal law, or the European Union\u2019s climate protection directive. For example, lower energy use arising from a building retrofit undertaken because of the cost savings would not qualify as bona fide efficiency-created offsets. Double counting also should be avoided, according to experts. That is, energy efficiency measures used to meet a set carbon cap can\u2019t then be turned around and sold as emission offsets. There is also the problem of deciding who should own the efficiency offset--the end user, utility, home builder or appliance manufacturer. \u201cThe California miracle\u201d--the state\u2019s ability to keep per capita energy consumption flat since 1970 because of stringent building and appliance codes--was used in the conference to highlight the stand alone benefits of efficiency measures. However, some in the efficiency sector want tradable efficiency certificates. In addition, the California Public Utilities Commission insists that efficiency measures are key to meeting AB 32\u2019s target of curbing emissions to 1990 levels by 2020. Investor-owned utilities, like Pacific Gas & Electric and Southern California Edison, also stand to reap $400 million if they get within reach of set efficiency levels. \u201cEnergy efficiency will be part of cap-and-trade discussions,\u201d said Greg San Martin, Pacific Gas & Electric climate protection program manager. San Martin, who works with representatives from western states attempting to develop a regional trading market, noted that efficiency is the most effective way to meet climate change protection goals. Editors\u2019 note: For a more detailed version of this story, please see our sister publication E=MC2 \u2013 Energy Meets Climate Challenge \u2013 energymeetsclimate.com.