6. The Offset paradox

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We face a familiar debate: Is carbon offsetting a vital component of a holistic climate strategy that incentivises emission reductions—or is it merely a distraction, potentially substituting real, on-the-ground reductions at the source?

The rationale behind offsetting is simple: A company reduces its emissions as much as it reasonably can and then uses carbon credits to offset the rest. These two actions–reducing and offsetting–are meant to go hand in hand. 

Here is why: If you commit to offsetting, you automatically put a price on every ton of CO₂. Hence, you have an incentive to reduce emissions, as every ton you eliminate translates into cost savings. 

In this way, carbon offsetting is meant to complement and encourage, and not to substitute carbon reductions. On top, the funds raised from carbon offsets are to be invested in projects that help reducing and removing carbon mostly in vulnerable countries. 

But here’s the paradox: If a climate target includes both internal reductions and external offsets, critics worry it can mask overreliance on offsets. Instead of using offsets to complement reductions, some fear companies might take an “either, or” approach—focusing more on buying credits than cutting emissions.

As a result, what was designed to be a robust and comprehensive climate strategy risks being dismissed as greenwashing.

What do you think? Is the theory that carbon offsetting sparks carbon reductions – and vice versa – flawed?

In this series, two leading authorities in carbon uncover the secrets and contradictions of an entire industry – in the most fun and engaging way. Through 32 curated Carbon Paradoxes, you'll learn everything essential about this field, starting with the tensions we must address to make environmental markets thrive.

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