Carbon trading proponents argue that companies that buy carbon credits decarbonise faster than companies that don’t buy carbon credits. In 2023 and 2024, a series of reports came out pushing this argument.
The reports were written by carbon credit ratings firm, Sylvera, financial services provider MSCI Carbon Markets (previously known as Morgan Stanley Capital International), and the pro-carbon trading website Ecosystem Marketplace all push this argument.
Obviously, all three organisations have an interest in promoting carbon credits.
However, there is only one peer reviewed study on this topic. Published in Nature Communications in September 2025, it is written by Niklas Stolz and Benedict Probst both from the Group for Sustainability and Technology at ETH Zürich.
In their study, which is titled, “The negligible role of carbon offsetting in corporate climate strategies,” Stolz and Probst write that,
While industry reports claim that credit purchasers decarbonise faster, rigorous evidence is missing. Here, we provide an in-depth analysis of 89 multinational companies’ historical emission reductions and climate target ambitions. Based on self-reported environmental data and more than 400 sustainability reports, we find no significant difference between the climate strategies of companies that purchased credits and those that did not.
“Meta straw man debate”
Carbon Market Watch recently commissioned a report by the Oeko-Institut, a German environmental research institute. The authors of the report carried out a literature review and interviews with companies. The Oeko-Institut report also includes a discussion about the additional information that would be necessary to develop a study that would investigate rigorously whether there is a causal link between carbon credit use and corporate climate action.
The authors conclude that, “it would be inherently challenging to develop a robust and representative study design that would be suitable to empirically test whether the use of carbon credits has a causal effect on internal emission reductions”.
In a new policy briefing, Carbon Market Watch calls on those pushing the narrative that carbon credits result in faster decarbonisation to stop doing so. Carbon Market Watch describes it as a “meta straw man debate”.
While time and resources are wasted on this topic, the climate crisis continues to worsen. Carbon Market Watch points out that the focus must be on cutting emissions now.
“Causation and correlation are not synonyms”
Last year, the Dutch NGO Centre for Research on Multinational Corporations (SOMO) published a series of myth-busting articles: “Facing the facts: carbon offsets unmasked”. One of the articles addresses the myth that companies that offset their emissions decarbonise faster.
SOMO notes that the correlation between buying carbon credits and decarbonising is “questionable at the very least”. Even if such a correlation exists, SOMO writes, it does not demonstrate causation. “Causation and correlation are not synonyms.”
None of the three 2023 reports by carbon trading proponents (Sylvera, MSCI, and Ecosystem Marketplace) state the relationship between buying carbon credits and the reduction of scope 3 emissions. Scope 3 emissions are often by far the largest part of companies’ footprints.
By excluding scope 3 emissions, companies could give the impression that they are decarbonising while in reality their emissions are increasing.
SOMO critiques each of the reports:
Ecosystems Marketplace’s report lists the top buyers of carbon credits, many of which are Big Polluters. The top three are Delta Air Lines, TotalEnergies, and Shell. All three, as SOMO points out, have been subject to legal action by activists over their on-going contributions to the climate crisis.
Sylvera’s report selected 102 companies — 51 of which bought carbon credits and 51 of which did not. Sylvera provided no clear information about how the companies were selected. The names of the companies are not disclosed.
MSCI’s report acknowledges that “multiple criteria” should be used to evaluate each company’s performance. 22% of the carbon credits covered in the report are bought by the energy sector. But companies that bought carbon credits had reduced emissions by only 1.7% and those that didn’t by 1.3%. And scope 3 emissions showed no significant reduction.
A dangerous distraction
MSCI’s report concludes with a question: “Existing data is insufficient to determine causality — are climate leaders more likely to use carbon credits or are carbon-credit users more likely to become climate leaders?”
The underlying assumption is that carbon credits have something to do with addressing the climate crisis.
Which they do not.
The reality is that carbon trading is a dangerous distraction from the urgent need to leave fossil fuels in the ground. As Friends of the Earth International pointed out in a 2009 report.
And as a 2025 study found, it would be better to leave fossil fuels in the ground than attempt to offset ever-increasing emissions:
In a statement, Benja Faecks, the author of the Carbon Market Watch policy briefing explains that,
“Carbon credits have become a comforting myth, not a catalyst for genuine corporate climate ambition. The unhelpful narrative that buying credits accelerates real decarbonisation runs counter to the evidence and distracts us from meaningful action. Instead of fixating on weak correlations, we must speed up real innovation, supplier engagement, and the structural and sectoral changes needed to truly extinguish the fire in our own house.”
This is the ninth in an occasional series of REDD myths on REDD-Monitor.
It is also necessary to address a broader and more uncomfortable reality: non-compliant carbon credits have become one of the most damaging illusions in today’s global climate finance landscape.
These credits do not meaningfully contribute to climate mitigation. They are not reconciled with national accounts, are not authorized by host-country governments, and do not produce mitigation outcomes that can be credibly claimed under the Paris Agreement. Yet they continue to be marketed as “climate action,” attracting capital, publicity, and corporate claims.
In practice, this is not climate finance—it is capital extraction. Funds are diverted away from nationally governed mitigation pathways, adaptation needs, and Paris-aligned mechanisms, and instead flow into projects that exist outside sovereign accounting systems and lack legal or environmental integrity. The result is not additional climate action, but distortion: distorted incentives, distorted disclosures, and distorted public understanding of what climate contribution actually means.
This is why the proliferation of non-compliant credits is not a marginal technical issue. It is arguably one of the single largest obstacles to effective climate finance today. It allows capital to circulate without accountability, enables green claims without corresponding mitigation, and undermines trust in carbon markets precisely at the moment when alignment with national registries and Paris-era governance is essential.
If climate finance is to be credible, it must move away from unverifiable, non-authorized credits and return to its core purpose: funding mitigation and adaptation that is real, accountable, and embedded within sovereign climate frameworks. Anything else is not a contribution to climate action—it is a distraction from it
Excellent breakdown of the causality problem. The whole thing basically collapses into circular logic once you question wheter climate leaders buy credits or credits make climate leaders. What's especially clever about the Stolz/Probst study is how it sidesteps this by just comparing actual historical reductions, which completely undercuts the industry narratives. The scope 3 exclusion in those reports also kinda exposes the game being played where companies look like they're improving while total footprints keep expanding.