Carbon Offsets Cannot Be Our Primary Solution to Climate Change

The current carbon offsets market incentivizes corporations to shift the moral responsibility of reducing emissions to others. Drastic reform is needed to guarantee a true reduction in global emissions.

As an international student, I take a 17,000 kilometer roundtrip to Penn twice a year, resulting in a few thousand kilograms of carbon dioxide emissions. Given that air travel is my only viable option, I could choose to “cancel out” the carbon impact of my flight by buying a small portion of a solar project, for example. While this kind of offsetting is a great way to raise individual consciousness about environmental impacts, it is not ideal when scaled to the level of massive corporations.

About 100 companies are responsible for 71% of global emissions. A major facet of these firms’ climate strategies is carbon offsetting which entails investing in a carbon mitigation project to counteract their carbon footprints. Unfortunately, carbon offsets do not incentivize behavioral change. Given our current climate crisis and the difficulty of accurately quantifying the effects of carbon offsets, we should be racing to remove carbon dioxide from the atmosphere instead of allowing these companies to release more emissions while relying on carbon offsets.

There are three main reasons why we should not bank of carbon offsets:

Difficult to Measure. The impact of carbon offsets is often difficult to measure and predict accurately. For example, the Lionshead fire in Oregon destroyed a forest that California had issued more than 2.6 million offset credits to the Confederated Tribes of Warm Springs to protect. While there are legal avenues to address these unintentional reversals, these scenarios reveal the riskiness of the functionality of carbon offsets.

Unsurprisingly, the European Commission published a 2017 study revealing that 85% of carbon offset projects under the UN’s Clean Development Mechanism failed to reduce emissions. These findings demonstrate the pressing need of oversight and regulation in this field.

Avoiding Local Problems. Several carbon offset projects fail to address moral implications of their impact to specific communities. 75% of offsets purchased within California’s cap-and-trade system have been for projects out-of-state, such as the aforementioned Warm Springs project. As a result, Californians do not directly benefit from emissions reductions—they inhale the same toxic air from locally polluting companies. These carbon offsets will not address the full damages of emissions until a portion of their payments are reinvested into the affected communities through environmental interventions such as local building retrofits or urban greening.

Offsets can also be harmful to communities where the project is located. Studies show that carbon offset projects that protect the Amazon forest threaten to displace indigenous people. Moreover, these projects speed up the deforestation of areas of the Amazon that have not been protected by offsets.

Distorting Climate Action. Carbon offsets tend to give the public a distorted image of corporations’ climate actions. Carbon offset projects are immensely publicized by firms as marketing schemes to depict themselves as climate conscious. Unfortunately, not only do many firms fail to divulge the possible negative impacts of their carbon projects, some also turn around to spend even more on advertisements promoting fossil fuel industries and lobbying against climate policies.

For example, while British Petroleum was a major player in California’s cap-and-trade system, it also contributed $13 million to a campaign blocking a carbon tax in Washington state and spent over $50 million to control climate policies in 2018. Corporations’ two-faced approach to climate action is unacceptably misleading to society and deplorably harmful to our environment.

Carbon offsets, as they are currently being implemented, are like taking a painkiller for the broken arm that is climate change. As a concept, they have much potential to help meet climate goals, but the current market requires drastic reform to its level of regulation, oversight, and infrastructure to guarantee a true reduction in global emissions.

It is impossible for corporations to adequately limit climate change without fundamentally changing their behavior. Investing in climate mitigation projects should not be an opportunity to shift the moral responsibility of reducing emissions to others, nor a pass to engage in environmentally harmful actions. While carbon offsets may be an easy mechanism to take climate action, in the end, the most climate-friendly action is not emitting carbon.

This insight is a part of our Undergraduate Seminar Fellows’ Student Blog Series. Read work from other students and learn more about the Undergraduate Climate and Energy Seminar.

Ayina Anyachebelu

Undergraduate Seminar Fellow
Yina Anyachebelu is an undergraduate student in the Huntsman Program studying business analytics in Wharton and international studies in the College of Arts and Sciences. Anyachebelu is also a 2021 Undergraduate Student Fellow.