Carbon offsetting has been a cornerstone of climate mitigation strategies, enabling corporations and individuals to compensate for their greenhouse gas emissions by investing in projects that purportedly reduce or sequester an equivalent amount of CO₂.

However, recent analyses have cast doubt on the effectiveness and integrity of many offset projects. This article delves into the systemic challenges facing carbon offsets, evaluates their role in climate action, and explores potential pathways forward.

The Systemic Challenges of Carbon Offsets

1. Over-Crediting and Non-Additionality

A comprehensive review published in Annual Reviews in October 2025 highlights that carbon offsetting schemes often fail to deliver genuine emission reductions due to deep-rooted systemic flaws. The study identifies over-crediting—issuing more credits than the actual emissions reduced—and non-additionality—projects that would have occurred without the offset funding—as prevalent issues in voluntary carbon markets. These problems are not isolated to a few bad actors but are fundamental to the system. Alarmingly, only 16% of carbon credits actually result in real emission reductions, according to a separate meta-analysis.

2. Impermanence and Project Leakage

Carbon sequestration projects, such as reforestation and afforestation, face challenges related to impermanence—the risk that stored carbon may be released back into the atmosphere due to events like forest fires or land-use changes—and leakage, where emission reductions in one area lead to increased emissions elsewhere. These issues undermine the long-term effectiveness of offset projects and complicate efforts to achieve net-zero emissions.

3. Double-Counting and Verification Failures

The integrity of carbon offset projects is further compromised by double-counting, where multiple entities claim the same emission reductions, and verification failures, where independent auditors overvalue credits or fail to detect fraudulent activities. For instance, a study reviewed 95 carbon credit projects registered under Verra, the world's largest voluntary carbon credit registry, and found signs of systematic flaws with the auditing process, suggesting that carbon credits often fail to accurately represent actual emission reductions.

The Role of Standards and Regulatory Bodies

In response to these challenges, organizations like the Integrity Council for the Voluntary Carbon Market (ICVCM) have developed the Core Carbon Principles (CCPs), a set of science-based standards aimed at ensuring the credibility and effectiveness of carbon offset projects. The CCPs establish rigorous thresholds on disclosure and sustainable development, providing a framework for high-quality carbon credits.

Despite these efforts, the widespread adoption of such standards remains limited, and many offset projects continue to operate without stringent oversight, perpetuating the systemic issues identified earlier.

Evaluating the Efficacy of Tree Planting as an Offset Strategy

Tree planting has been a popular method for offsetting emissions; however, its effectiveness is contingent upon several factors. A study published in Communications Earth & Environment reveals that planting trees alone is not a viable solution to offset the carbon dioxide emissions from burning the fossil fuel reserves held by the 200 largest oil, gas, and coal companies.

To fully offset these emissions through tree planting, all the land across North and Central America would need to be covered in trees, which is not practically achievable. The cost to these companies for such a massive planting initiative would be $10.8 trillion—surpassing their total market value of $7.01 trillion. Furthermore, if charged for the social costs of their carbon reserves, at about $185 per metric ton, companies would face severe financial losses.

Additionally, sustainability constraints halve the land available for tree planting. A recent study published in Science reveals that the potential for using tree planting to meet climate targets is significantly constrained by sustainability considerations. While planting and restoring forests across an area comparable to the size of India could store up to 40 gigatonnes of carbon by mid-century, this estimate assumes optimal locations are used.

When sustainability factors such as biodiversity, water availability, and land use are considered, the area viable for tree planting is halved, highlighting the need for careful site selection and strategic planning to maximize climate benefits.

The Path Forward: Moving Beyond Offsetting

• Given the systemic challenges and limitations of carbon offsetting, the focus must shift towards direct emissions reductions. This includes:

• Transitioning to Renewable Energy: Investing in and adopting renewable energy sources to replace fossil fuels.

• Enhancing Energy Efficiency: Implementing energy-saving measures across industries and households.

• Promoting Sustainable Practices: Encouraging sustainable agriculture, transportation, and manufacturing processes.

While carbon offsetting can complement these efforts, it should not be viewed as a substitute for genuine emission reductions.

Looking Ahead

Carbon offsetting, in its current form, faces significant systemic challenges that undermine its effectiveness as a climate mitigation tool. While standards and regulatory bodies aim to enhance the credibility of offset projects, widespread adoption remains limited, and many projects continue to operate without stringent oversight. Given these issues, the primary focus must be on direct emissions reductions to achieve meaningful progress in combating climate change.