In response to the ongoing climate crisis, governments worldwide are setting regulatory caps on emissions so corporations can gradually reduce their pollution until they eventually reach “net-zero” or “carbon-neutral” emissions. Transnational corporations the world over, including Apple, Shell, Mercedes Benz, and countless others, have been making weighty claims of being on track to achieve net-zero within the next three decades. While these seem like commendable, well-intentioned commitments within an extractive and exploitative industrial system, the majority of these companies have no intention to substantially reduce their emissions at all. Instead, they plan to achieve net-zero by investing in “carbon-positive” projects such as planting or protecting trees, or regenerative farming, to “offset” the carbon they emit. Carbon offsets have quickly become the most popular measure to “combat” climate change, with some of the biggest polluters in the world advertising it as the great fix for the ongoing crisis.
Before we dive into our contention with offsets, it’s important to get on the same page about how they work. Say you run a factory powered by coal. Coal contains carbon that plants and trees pull out from the atmosphere through photosynthesis over millions of years. When you burn coal, the carbon captured within it is discharged into the atmosphere in the form of CO2 at an unnatural rate, which in turn causes the earth to heat up.
Now, let’s say your country has an emissions cap on net pollution, and to continue production, you are mandated to either reduce your emissions or offset them elsewhere. Reducing emissions is, of course, the more difficult and expensive path. It requires you to invest in greener technologies and restructure your business, supply chain, and the products and services you offer to be less exploitative and extractive. The easier and much cheaper path is to continue burning coal and hire a third party to remove, or offset, a certain amount of carbon from the atmosphere for a small fee. On paper, you do this by investing in projects such as planting or protecting trees, regenerative farming, or green energy in your business’ name, and an offsetting agency provides you with a certificate of proof that you have indeed offset your emissions. By submitting this certificate to your government, you are legally permitted to continue burning coal, so long as your net pollution (total carbon emitted minus total carbon offset) is below your country’s emissions cap.
The idea of offsets appears enormously appealing in theory because it promises a twofold market-based solution: First, it holds companies responsible for balancing out their emissions with carbon-positive projects. Second, it offers monetary compensation to those who are actually doing the work of capturing carbon. However, like all market-based solutions, offsets reduce the problem to a simple issue of supply and demand, falling severely short of addressing important social and ecological concerns. Our problem with carbon offsets is both structurally and functionally rooted in these concerns, and the questions surrounding them, such as: Why are some of the biggest polluters in the world advocating for offsets in the first place? What does it take to truly “capture” carbon? What sort of activities are being justified in the name of carbon capture? How is the market for offsets regulated? Who sets the prices of offsets? Which communities are being centred in the process? Which parts of the world are responsible for emitting, and which do the hard work of offsetting emissions?
The closer we get to these answers, the more obvious it is that offsets don’t really address any of the fundamental issues of climate change. In fact, they often do more harm than good. Of all climate solutions, carbon offsets, especially in the way they are governed now, are arguably the greatest greenwashing* scam of our time. Let’s dive into why.
*Greenwashing is the process of capitalising on the growing demand for sustainability by conveying misleading information about how a company’s practices, products, and services are environmentally sound.
CARBON OFFSETS ALLOW CORPORATIONS TO AVOID REAL EMISSION REDUCTION
According to Reuters, one-fifth of the world’s largest publicly listed corporations have committed to net zero emissions before 2050. However, the bulk of them are relying on offsets rather than direct emission reductions to meet their targets. Carbon offsets allow corporations to continue polluting and even exceed their regulatory emission caps, so long as they offset their pollution elsewhere.
The reason offsets exist in the first place is painfully clear: so corporations and governments can avoid reducing emissions and continue to accumulate profits at the expense of people and the environment, while meeting regulatory requirements. Greenpeace refers to it as “a bookkeeping trick intended to obscure climate-wrecking emissions.” As they state, “it’s tree planting window dressing aimed at distracting from ecosystem destruction.”
Carbon offsets are not just the cheap way out of real emission reduction — they inherently perpetuate exploitative and extractive industrial practices.
CARBON CAPTURE INVOLVES MORE THAN JUST PLANTING TREES
The biggest technical flaw of carbon offsets comes from the misunderstanding of what it takes to remove carbon from the atmosphere and capture it in the ground. Activities like planting trees or regenerative farming fulfil the role of pulling carbon from the atmosphere. But, as professor Liz Carlisle puts it, “the thing about carbon is that there’s nothing particularly valuable about simply getting it into the ground. To make a difference for the climate, much of that carbon has to stay underground for a long time.”
The carbon cycle is a natural process that takes hundreds of years, and the combined effort of millions of microorganisms, plants, animals, the soil, and the communities that protect and nurture biodiversity. Each of these actors has a crucial role to play. Plants absorb atmospheric carbon dioxide during photosynthesis and secrete sugars, oxygen, carbohydrates and other carbon-rich nutrients into the soil to feed fungi, bacteria and other microorganisms. As these microorganisms grow in number, they create intricate structures that branch out and store more and more carbon over hundreds of years. During this process, if the soil is disturbed through heavy tillage, erosion, or deforestation, these structures break down once again, and release carbon back into the atmosphere. To really capture carbon, the soil has to be managed by the entire ecosystem, including the communities that live on the land itself, through Indigenous practices such as conservation tillage, cover cropping, and crop rotation.
However, offsets reduce the process of carbon capture to transactional projects and activities that in reality compensate for far less emissions than what is reported on paper.
MOST OFFSET PROJECTS ARE OFTEN NOT OFFSETTING ANYTHING
The key to any successful carbon offset project is the claim of additionality — proof that the project will provide an extra reduction of carbon that wouldn’t otherwise have happened. For instance, planting a tree that wouldn’t otherwise be planted or saving a tree that is scheduled to be uprooted. However, in many cases, claims of additionality are ambiguous, largely exaggerated and based on bogus projects undertaken by unregulated, private third-party registries.
John Oliver unpacked this in a recent episode of his show. Oliver brought in examples of corporations like JP Morgan and Disney investing millions of dollars in the Nature Conservancy, which Bloomberg has labelled “the world’s largest environmental group” — an organisation at the forefront of the carbon offset scam. The Nature Conservancy has enabled these corporations to claim that they’re protecting forests and sanctuaries that aren’t threatened to begin with, driving massive amounts of money to the hands of the wealthy landowners whose lands encompass those forests. Oliver explains that the offset market is filled with projects such as these. Now, you can even pay to defer uprooting a tree for as short as 12 months, which Oliver compares to being as ridiculous as selling a carbon credit for holding your breath for 15 seconds.
It is not that the carbon offset market is corrupted by a handful of badly implemented projects that malign the true potential for the goodness of offsets. The real problem is that the regulations around offsets are so weak today that there is neither incentive nor compulsion to run a legitimate project in the first place. As it stands, virtually anyone can set up a carbon offset registry and start listing projects and sell credits at ambiguous rates, without being accountable to the public or any government authority. Oliver demonstrated this all too well in his episode, when he legally set up a registry called “Oliver’s Offsets.” (Oliver threatened to saw down a tree in his studio if his viewers didn’t help him raise 10,000 carbon credits at $1 per credit; each delaying the destruction of the tree by exactly one minute).
OFFSETS COMMODIFY NATURE
As ridiculous as the current governance of the carbon offset market sounds, regulation is still besides the point. Carbon offsets are not just flawed in practice, they’re fundamentally flawed in concept. They are rooted in the idea that we can put a price tag on nature — that there is a justified market cost for devastating our lands, our waterways, our animals, our communities. But we are in a climate crisis in the first place because we have allowed corporations and governments to do exactly that — to continue to put the need for market growth over life itself.
The market demand for carbon offsets is rising exponentially, and is expected to grow into a US$100 billion market by 2030, with some of the largest corporations in the world investing heavily in purchasing and privatising common lands and displacing communities. Offsets are becoming the go-to tool for these corporations because they let corporations convert nature into a tradable commodity, while externalising social and ecological costs. It is designed to overlook the unequal contributions of different players in carbon emissions, the function of various ecosystem actors in the carbon cycle, the violent history of the land itself, and the role of communities that have been protecting the soil and biodiversity since time immemorial.
OFFSET PROJECTS DO NOT CENTER GRASSROOTS COMMUNITIES
Nearly everything we know about environmental conservation and sustainability is derived from the lived experiences and knowledge of peasant and Indigenous communities. Indigenous communities alone protect 80 percent of the world’s biodiversity, including the plants, animals, microorganisms and natural resources that all play a paramount role in capturing carbon.
In the last decade, many popular conservation efforts, like regenerative farming, have appropriated Indigenous knowledge and techniques such as rotational grazing, crop diversification, and agroforestry, without regarding the restoration of Indigenous agency as central to the regeneration of the environment. Offset projects are currently being weaponised to actively and systematically displace and impoverish peasant and Indigenous communities worldwide, in order to privatise and commodify the natural environment, and sell it in the market to the highest bidder.
As you’re reading this, the Kichwa community of the Peruvian Amazon are fighting against the violent imposition of a REDD+ offset project that is both invisibilising and criminalising them for their role in forest conservation. The government and NGO-run project rely on a fortress conservation model that actively excludes the role of Indigenous communities in nature conservation, following the rhetoric of ‘humans being separate from nature and inherently harmful to it.’ Because Indigenous agency is not centred, the Kichwa people, and so many others are being violently displaced from their territories and restricted (even criminalised) for their traditional practices such as hunting, collecting forest produce, and nurturing the forest through rotational agroforestry.
In another case, the Oakland Institute published a report exposing an exploitative carbon offset project in Uganda headed by Green Resources, a Norwegian-registered plantation forestry company. Green Resources acquired licences to two government-owned Central Forest Reserves in Uganda, a total of over 11,864 hectares. They’ve used the licences to set up forest plantations (monocropping trees on a massive scale), enabling them to sell offsets to corporations for the trees planted. The project has disrupted the lives of 8,000 villagers who had freely accessed the public land in the past to grow food, graze animals, collect forest resources, and engage in cultural activities. Many have been forcefully evicted from their lands, and have reported that the chemicals used on the forest plantation have poisoned their crops, animals, and waterways.
The unfettered extraction and destruction of the environment, and the mass displacement of peasant and Indigenous communities from their lands historically and at present have always been driven by the privatisation and commodification of nature. And yet, offsets are a continuation of the same sinister system, offering a classic market-based solution to a profoundly socio-ecological problem. The impact of offset projects on the Kichwa community and the villagers in Uganda are not isolated cases, but rather microcosms of a much larger geographical pattern of what offset projects look like the world over.
OFFSET PROJECTS MIRROR OUR COLONIAL HISTORIES
The pattern of offset projects worldwide bears a striking resemblance to a history we’re all too familiar with — countries of the Minority World* violently and systematically setting up massive projects in the Majority World**, imposing structural changes to their economy, commodifying their resources, displacing and impoverishing their people, and dictating how to conserve lands and forests to communities who have lived there for thousands of years.
*Minority World refers to the countries traditionally referred to as “developed,” and emphasises that while these countries tend to impose their will on the rest of the world, they are in fact, the minority.
**Majority World refers to the countries traditionally referred to as “developing,” who in fact make up the majority of the world's population.
The design is deliberate. Carbon offsets are an extension of the colonial value system, and as such, they are designed to piggyback on the structural inequalities created by colonialism and capitalism. The Minority World countries that have accumulated their wealth through subjugation and unfettered resource extraction continue to profit from their monopoly on emissions, while the Majority World suffers the social and ecological costs of pollution and the burden to clean up the mess.
A JUST CLIMATE SOLUTION IS HOLISTIC AND REPARATIVE
A true, long-term solution to the climate crisis is one rooted in social justice; one that is strictly regulated; one that forces corporations to immediately halt exploitative and extractive practices and work towards real-zero as opposed to net-zero emissions; one that necessitates the protection and preservation of all actors in the carbon cycle, and recognises carbon capture as a social and ecological process and not a transactional act that commodifies nature; one that is led by and centred around the agency of peasant and Indigenous communities that protect biodiversity; one that confronts and repairs the structural inequalities induced by colonialism and capitalism, and restores the sovereignty of the Majority World.
There’s a reason that carbon offsets are gaining so much popularity today. They create the illusion that the crisis is solvable without major changes to the current exploitative and extractive system. They allow Minority World countries to continue plundering the Majority World’s resources and disenfranchising its people. They give corporations the opportunity to profit and accumulate even more wealth while branding themselves as our saviours. They let us continue enjoying the privileges we do today at the cost of many other communities and rest easy because “we’ve done our part.” And they help sideline serious conversations about the systemic changes we need to truly avert the path of the crisis.
This critique isn’t intended to instil a sense of defeat, but rather to install a sense of purpose. There is a lot of work to be done to repair, redress, and rebuild, but we will not get far if we are investing all our resources and energy in replicating the same systems that feed off the exploitation and extraction of communities. Luckily for us, there is no dearth of just and sustainable solutions and systems. In fact, there is an abundance of systems in which communities have coexisted symbiotically with nature for thousands of years. And yet, rather than learning from these communities and allowing them to lead us, we continue to impose reforms that further strip them of their agency. The way out is in welcoming these communities to guide us in collectively reimagining new systems fundamentally rooted in sovereignty and care.