New Scientist: Carbon offsets are one of the five worst ideas of the 21st century
Along with Bitcoin, Social media, Alternative fuels, and Effective altruism.
“They offered so much promise, but ultimately turned sour,” New Scientist writes. “These are the most disappointing ideas since the turn of the millennium.” One of these ideas is carbon offsets.
Michael Le Page, who has been a journalist with New Scientist for the past 11 years writes that offsetting “sounds like such a simple idea”. A polluting corporation can offset its emissions by buying carbon offsets from projects that reduce or avoid CO₂ emissions, or remove CO₂ from the atmosphere. The hope is that the offsetting project cancels out the corporation’s emissions.
Except, of course, that rarely happens in reality. And I would disagree that carbon offsets ever offered any promise, apart from to the fossil industry, which saw offsets as a way of continuing to profit from business as usual for as long as possible.
Le Page runs through the fundamental structural problems inherent in all carbon offsets:
Counterfactual baselines: Offset projects are based on a story about what would have happened in the absence of the project. Obviously, when the project goes ahead, there is no way of proving what would have happened. Le Page gives the example of a plot of land that is planted with trees. Carbon offsets are sold based on how much carbon the trees removed from the atmosphere. The assumption is that no trees would grow without the reforestation project. But it is possible that trees could have naturally regrown, resulting in a more biodiverse forest than a plantation. A biodiverse forest is more resistant to droughts and diseases than a monoculture plantation. The result of the tree planting is more CO₂ in the atmosphere, not less.
Additionality: Carbon offsets can only be issued to projects that would not have happened without the carbon finance. “This is easy to fake,” Le Page points out. Professor Myles Allen at the University of Oxford tells Le Page that, “With a good enough accountant, there seem to be unlimited ways of proving additionality.”
Exaggerated benefits: Many offsets are based on avoided emissions by protecting forests — REDD projects. A long list of academic papers, investigative journalism, and NGO reports in recent years has exposed the fact that many of these projects have exaggerated the number of carbon credits generated. “And that can have real consequences,” Le Page writes. “People might, say, take more flights because they think their emissions are being offset, when that is far from the case.”
Alternative to investing in greener tech: Instead of investing in cleaner technology, corporations can continue polluting while buying carbon offsets and claiming to be addressing the climate crisis.
Permanence: Particularly with nature-based offsets there is no way of guaranteeing that the carbon will remain stored for as long as needed. When fossil fuels are burned, some of the CO₂ remains in the atmosphere for a very long time. “A CO₂ storage period of less than 1,000 years is insufficient for neutralising remaining fossil CO₂ emissions,” according to a 2024 paper published in Nature. Trees can be killed by wildfire, drought, or disease — all of which are getting worse as the climate crisis intensifies.
Le Page ends by referring to the Oxford Offsetting Principles, developed by Myles Allen and colleagues. The first two words of the Principles are the most important: “Cut emissions”.
A brief history of offsetting
To be pedantic, carbon offsets raised their ugly heads well before the 21st century. Back in 1977, Freeman Dyson, a theoretical physicist and mathematician, decided that it should be possible “to plant enough trees and other fast-growing plants to absorb the excess CO₂ and bring the annual increase to a halt.”
Carbon Brief goes back even further in its 60-year history of carbon offsets to 1960 and Ronald H Coase’s paper, “The Problem of Social Cost”.
The first land-based carbon offset scheme was in 1988. A tree planting scheme in Guatemala was supposed to offset the emissions from a new coal-fired power plant in the USA. Mark Trexler, who was hired by the World Resources Institute to oversee the project told Carbon Brief that,
“No one ever thought that carbon offsets were going to save the world. That just wasn’t the way we were thinking about this. We were thinking: this is an interim measure until public policy gets going. It was a way of getting the conversation started. No one then thought that we would be doing offsets 35 years later.”
A Child Not Yet Born, but Already Registered:
What a News Story Reveals About What a “Real” Carbon Credit Is**
A recent human-interest news story described an absurd situation:
a child had not yet been born, but the name was already registered;
the living conditions were not yet prepared, yet publicity had already begun.
In parenting news, this sounds ridiculous.
In carbon markets, however, the same logic is increasingly being sold as innovation.
In several high-profile carbon project narratives today, carbon credits have not yet been issued—none exist in any official registry—yet tokens, “natural asset” claims, and RWA-style financial stories are already circulating. This is no longer a question of aggressive marketing. It is a question of institutional misalignment.
If the carbon credit does not yet exist, what exactly is being sold?
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1. The Benchmark Has Always Been There: NDC Is Not Background Noise
To understand what constitutes a real carbon credit, the starting point is not a pitch deck, but the Nationally Determined Contribution (NDC).
Under the framework of the UNFCCC, every country has formally submitted its NDC. This means governments have already declared:
• which sectors will reduce emissions,
• which forests and lands will absorb carbon,
• at what scale and over what timeframe,
• and that these outcomes count toward national targets.
This is not a vision statement.
It is a sovereign commitment.
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2. The Current Reality Is Clear:
Today’s “Net Removals” Belong to the NDC
Whether we are talking about:
• natural forest carbon sequestration,
• government-led protection, restoration, or afforestation,
• or forest management already required by law,
all resulting net removals are, by default, part of the national NDC.
Unless there is an explicit authorization, registry recognition, and corresponding adjustment (CA), these outcomes are:
• not corporate assets,
• not private property,
• and not tradable mitigation outcomes.
This point is not optional.
Without acknowledging it, all downstream carbon-credit narratives collapse.
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3. When Can a Private Carbon Credit Legitimately Exist?
The answer is simple—and extremely strict:
You must do better than what the government is already doing.
“Better” here does not mean better storytelling or bigger numbers. It means demonstrable facts that withstand regulatory scrutiny:
• the outcome would not have occurred under existing policy,
• it is not mandated by law,
• it is not already counted toward the national NDC.
This is additionality above the NDC baseline, not below it, and not parallel to it.
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4. Why This Line Matters
If a project does not exceed what the state has already committed to do, yet still issues credits or financial instruments, the result is straightforward:
• public mitigation outcomes are privatized,
• the same tonne of CO₂ is claimed twice,
• structural double counting is created.
Under the Paris Agreement architecture, this is not a grey area.
It is a red line.
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5. Returning to the News Metaphor
A child not yet born, but already registered.
A carbon credit not yet issued, but already financialized.
The forest is still under validation.
The tokens are already circulating.
This is not about whether a project might succeed in the future.
It is about selling possibility as if it were already an asset.
That is not climate finance foresight.
It is the premature monetization of public climate governance outcomes.
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6. One Sentence That Defines a Real Carbon Credit
A real carbon credit is not defined by what you claim to do,
but by whether you can prove that—without you—the government could not have achieved that outcome, and that the government explicitly agrees to allocate that portion to you.
As long as the NDC benchmark exists,
any carbon narrative that avoids this question—
no matter how large the tonnage, how long the timeframe, or how sophisticated the financial packaging—
is ultimately just a competition in storytelling.
Chris, another important article on the inherent limitations of carbon offsetting. The article seems accurate to me. The New Scientist article will no doubt upset quite a few people, including the Bitcoin Bros.
One issue with voluntary carbon markets is the psychology. My experience with carbon market practitioners is that they don't want to admit the structural limitations of the voluntary market when they have a financial stake in it. This is also true for other aspects of the sustainability sector, including natural capital and circular economy. The root cause, in my opinion, is an incomplete theoretical and philosophical foundation.
To help resolve these failings of carbon markets, I recommend using the Carbon Market Matrix in Figure 8 (p. 45) of my working paper:
https://zenodo.org/records/17341212
This matrix-based approach may—for the first time—explain the complete picture for carbon pricing (as a market-based approach) by addressing the theories of A. C. Pigou (1920) and R. Coase (1960) and the full spectrum of costs and risks.
Thanks for your Substack. Keep going.
Delton