http://www.nytimes.com/2014/05/30/science/a-price-tag-on-carbon-as-a-climate-rescue-plan.html?ref=us

As part of its plan, the state decided to allow emission-lowering projects in sectors not covered by the cap-and-trade system, such as forestry and farming. These “offset projects,” which can be located anywhere in the United States, are subject to strict auditing. The projects create credits that can be sold in the California market.