Carbon Offsets


In general, offsets credits are given to worthwhile activities — tree planting, methane capture at farms, and protection of the rainforest. However, the emissions reductions created by these projects might have happened without financial incentive of offsets payments, and so they should not be allowed to substitute for real emissions reductions required by regulation.

Further, there are many ways that offsets are open to fraud [1, 2, 3].


  • For example, Chevron was recently awarded a multimillion dollar offsets project for agreeing to stop burning their gas flares in Nigeria. But it has been illegal to flare gas in Nigeria since 1984, so it is questionable why Chevron should be rewarded for simply not breaking Nigeria’s laws [4].

  • Conflict of Interest


Offset projects employ inspectors to verify that a project works. But since the people who purchase the offsets pay these verifiers, there is a clear conflict of interest that is actively avoided in, for example, the auditing industry [5].


  • Offset Costs < Carbon Permits


Serious scientists and economists often state the fastest way to solve this problem is to make CO2 emission more expensive. Offsets cost less than carbon permits [6]; so they do make it cheaper for companies to continue business as usual and allow them to not really reduce their emissions. This undermines the logic of scientists and economists and does not address the primary problem of serious emissions reductions.


Frequently Asked Questions:


Question: Are offsets needed to incentivise the sequestration of carbon?

Answer: The cheapest form of sequestration is the sequestration you never had to do, and a carbon price is the best way to keep fossil fuels in the ground.


Question: Are offsets needed to keep businesses from being hit too hard?

Answer: Offsets are ultimately unverifiable, and they add complexity that is unnecessary for just getting started.



  1. Hoag, Hannah. “The problems with emissions trading”. Nature. Nov 25, 2011.
  2. Elgin, Ben and Einhorn, Bruce. “China: Climate Change Or Hot Air?”. Dec 9, 2009. Bloomberg Businessweek.
  3. Rosenthal, Elisabeth and Lehren, Andrew W. “Profits on Carbon Credits Drive Output of a Harmful Gas”. New York Times. August 8, 2012.
  4. Wysham, Daphne.“Nothing More Than Hot Air: The World Bank’s Perverse Incentives to Pollute Continue Preempting a Better, More Principled Way Forward”. Posted online: June 1, 2011. Global Policy Forum.
  5. “Conflict of Interest”. Miriam-Webster, 2013. Reed, Stanley and Scott, Mark. “In Europe, Paid Permits for Pollution Are Fizzling”. April 21, 2013. New York Times.
  6. Reed, Stanley and Scott, Mark. “In Europe, Paid Permits for Pollution Are Fizzling”. April 21, 2013. New York Times.