This article examines the governance of international carbon offsets, analyzing the political economy of the origins and governance of offsets. We examine how the governance structures of the Kyoto Protocol's Clean Development Mechanism and unregulated voluntary carbon offsets differ in regulation and in complexity of the chain that links consumers and reducers of carbon, with specific consequences for carbon reductions, development, and the ability to provide “accumulation by decarbonization.” We show how carbon offsets represent capital‐accumulation strategies that devolve governance over the atmosphere to supranational and nonstate actors and to the market.

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Decarbonising the power system holds a critical role in climate change mitigation. Recent developments in technology are helping change the current centralized paradigm into integrated distributed clean energy resources. In spite of these developments, radical transformation is not occurring at a speed to effectively meet environmental targets, mostly due to the incumbent carbon lock-in trajectory. We argue, therefore, that business model (BM) innovation dynamics are key drivers in accelerating the low carbon power system transition, often operating irrespective of the underlying technology. We combine BM theory with the multi-level perspective on sociotechnical transitions to present a useful framework to analyze this potential transition. This paper presents the application of this framework characterizing relevant BM dynamics of niche and regime business actors, and supporting these with illustrative examples. Particularly, we find that new actors of the distributed energy business are achieving market scale by offering financially innovative BM that do not require upfront costs from customers. Higher penetrations of renewable energy sources in liberalized electricity markets are destabilizing the historical BM of large centralized utilities through erosion of wholesale prices. Furthermore, a shift towards distributed and dynamic energy resources further challenges incumbents and might bring opportunities for BMs focused on active customer participation and social value creation. As these tendencies are expected to accelerate, we find analyses of BMs will have important relevance for future power system transition research. 1. Introduction The electrical power system holds a central role in meeting emission targets for climate change mitigation. In order to keep mean temperature rise within 1.5-2 o C relative to pre-industrial levels, as suggested by the IPCC and restated in the 2015 UNFCCC Paris Agreement (IPCC, 2013; UNFCCC, 2015), feasible energy transformation pathways [developed with Integrative Assessment Models] require significant reduction in energy intensity (i.e. efficiency), a radical electrification of the energy system, and a fast decarbonisation of the electricity sector (Kriegler et al., 2014; Rogelj et al., 2015). But considering that electricity corresponds to just 18% of total energy consumption, and 67% of its primary source is fossil based (IEA, 2014), this scenario requires a challenging technological and systemic revolution in this sector. This shift is not occurring at the speed required: wide scale renewable energy technologies and carbon-saving innovations have faced significant resistance when attempting system-wide diffusion (Bumpus et al., 2014; Geels, 2014). Resistance comes from a complex structure of actors mostly centered around fossil fuel incumbent firms that have been locked into sustaining carbon intensive business models (BMs)(Dangerman and Schellnhuber, 2013; Unruh, 2000). Recent increases in electricity prices, reduction in renewable technology manufacturing costs, and g...

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