Carbon Offset Problems We Need to Know

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This post is the continuation of our previous blog post, Understanding Carbon Offsets and Terminology.

One of the ways that companies and businesses can meet their net-zero emissions target is by purchasing carbon offsets.

But how can they ensure these carbon offsets are effective, that the carbon markets work, and the money they are paying pull out their emissions from the atmosphere?

And what are the risks if these carbon markets are not delivering on their promises to offset emissions?

Some studies and articles are starting to identify the problems surrounding carbon markets.

For example, a study, “Systematic over-crediting of forest offsets”, that Grayson Badgley and colleagues conducted finds that California’s forest carbon offsets program has engaged in over-crediting.

According to their report,  29.4% of the offsets equivalent to 30 million metric tonnes of CO2, and worth approximately $410 million, do not reflect real climate benefits.

California’s forest carbon offset is the most extensive program that exists so far, with more than $2 billion. The program plays a central role in the state’s cap-and-trade program, and a considerable part of the carbon credit that are being sold are from the forest projects.

According to the authors, over-crediting stems from an accounting problem. In California, how they establish a baseline or the amounts of carbon stored in a forest is to calculate the average over vast forest areas. But this calculation method presents some problems – they average over huge spaces and very different species.

Species of trees matter in terms of how much carbon they store. Some forests have much better forest quality than others, and averaging these better quality forests with lesser quality ones will not give an accurate average. Hence, the result is a skewed baseline which is not correct.

George Monbiot’s article, “Carbon offsetting is not warding off environmental collapse – it’s accelerating it“, claims big oil companies are not only exploiting carbon offsets to continue with their emissions but also accelerating environmental collapse. He says:

“wealthy companies are using the façade of ‘nature-based solutions’ to enact a great carbon land grab”, and rather than committing to leave fossil fuels in the ground, oil and gas firms continue to prospect for new reserves while claiming that the credits they buy have turned them “carbon neutral”.

Monbiot mentions the French company Total, which plans to develop new oil fields in the Republic of Congo and off the coast of Suriname. To justify these projects, the company will pay the government to protect existing forests and plant fast-growing trees in a savannah area.

But if drilling goes ahead, Manibiotcontinues, it will “break open a region of extremely rich forests and wetlands that sits on top of the biggest peat deposit in the tropics, potentially threatening a huge natural carbon store” and the savannah area that will be planted with trees could be detrimental to the animals that as their habitat will be disturbed and changed. Furthermore, the project will likely displace the local people who own the land.

Monbiot says less secure stores replace fossil fuels buried below. Wildfires in North America have burned the forest used as corporate offsets. Thus, it is getting harder to prove that these offsets have made a difference, he added.

Also, there is not enough land on the planet to absorb all GHG emissions – it will take five times the size of India and more than all the farmlands combined needed to pull out all the CO2 in the atmosphere, according to Oxfam.

So, should corporates and businesses stop using carbon offsets?

Carbon markets have their place in the fight against climate change. When carbon offset projects and accounting methodologies employ a high degree of transparency and credibility, carbon markets incentivise the protection of forests and essential carbon sinks.

Third parties with no financial or commercial interest in the project should calculate the baselines.

However, oil and gas companies and government should not rely on offsets alone but address the root of the problem – reducing emissions by leaving fossil fuels in the ground and decarbonising economies.

Friends of the Earth Policy says that for carbon offsetting markets to work reliably, each project would need to meet these criteria:

  • It should be additional or unlikely to happen without the intervention.
  • Permanent or prevent the release of CO2 for hundreds of years.
  • Do not leak or should not move emissions elsewhere; for instance, the protection of forest in one area should not lead to deforestation in another.
  • Local and indigenous people should agree to the project.
  • Be used for genuine residual emission and not an excuse to carry on business as usual or a cheaper alternative to mitigation.

To know more about the carbon credits, you can listen to the Climate Now podcast, “What’s Wrong with Carbon Offsets? with Mark Trexler and Derik Broekhoff“.


Monbiot, G. (2022, January 26). Carbon offsetting is not warding off environmental collapse – it’s accelerating it. The Guardian. Retrieved from

Clarke, J., Howard, E., & Barratt, L. (2021, October 25). Doubts over Shell’s ‘diver carbon neutral’ claim. Unearthed. Retrieved from

Badgley, G., Freeman, J., Hamman, J., Haya, B., Trugman, A., Anderegg, W., & Cullneward, D. (2021, April 29). Carbon plan. Retrieved from

Childs, M. & de Zylva, P. (2021, October 22). A dangerous distraction – the offsetting con. Friends of the Earth Policy. Retrieved from

What’s Wrong with Carbon Offsets? With Mark Trexler and Derik Broekhoff. (2021, July 30). Climate Now. Retrieved from

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