Carbon offset markets are unfair to communities in Borneo & beyond (commentary)

I write this while waiting for my tablet to die. Tomorrow, I’ll return to air-conditioning, stable WiFi and refrigeration, but here in Long Moh, deep in the remote Upper Baram region of Sarawak, there has been no electricity for two weeks. The fans sit useless and mocking in the corners, and a sudden downpour is the only relief that cuts through the muggy heat.

Communities here are among the least responsible for climate change, yet they’re already living with its sharpest edges. Each year in Malaysia, we now hear stories of children suffering permanent brain damage or death during heat waves because they simply played in the sun. In a place without air-conditioning, 1° Celsius (1.8° Fahrenheit) of global warming is not a statistic — it is a threat to life. And now, through carbon offsetting projects, these same communities are being asked to save the world from a crisis they did not create — often with little say, and even less reward.

I have traveled here with local NGOs SAVE Rivers and Sahabat Alam Malaysia, which are leading community workshops on carbon credit and offset projects. Rumors abound that this region — one of Sarawak’s last remaining strongholds of intact tropical forest — has been earmarked for a carbon project courtesy of a timber company with a decades-long track record of trying to chop it all down.

It is the same company that these communities have resisted for decades, defending their forests with determination and courage. The idea is this: the company would be paid handsomely, not for restoring forests, or planting trees, but for doing nothing — for not following through on the destruction it had planned in the first place. “Avoided planned deforestation” is one of the most dubious categories of carbon credits — and in the case of Baram, it’s like paying a burglar for deciding not to rob your house.

Meanwhile, the communities who have fought tooth and nail to keep these forests standing are not being rewarded with handsome sums for their efforts. The carbon credits (and the cash) flow primarily to the license holders, not to the Indigenous people who protect these lands. In the case of the Upper Baram, logging was halted not by corporate goodwill, but by community resistance. So, the carbon being “offset” is, in truth, entirely imaginary.

While listening to the workshop, it’s difficult not to be distracted by a hornbill couple playing in the trees across the booming Moh River, and the troop of short-tailed macaques gleefully tearing into their breakfast. The landscape is both breathtaking and vulnerable. It is exactly this beauty, this living forest, that makes the Upper Baram so valuable in a world newly obsessed with monetizing carbon.

SAVE Rivers and Sahabat Alam Malaysia are working to get ahead of the company, to speak plainly with communities about what these projects may mean in practice. They bring knowledge and examples from other areas of Malaysia and around the world, with a message of caution: the promises of carbon markets rarely translate into justice on the ground. Carbon offset projects routinely dismiss customary land tenure, and often kick communities off the lands they use.

SAVE Rivers explains that international fossil fuel companies and other polluters are using carbon offsets to avoid reducing their own emissions. They do this not by actually reducing pollution or using fewer resources, but by outsourcing their guilt to someone else.

One extractive industry funds another, while communities are sidelined. Even the state of Sarawak stands to gain only a mere 5% in tax revenues, while rural infrastructure remains sorely lacking. One village I visited had a cellphone tower but no signal; the next had signal, but no electricity. Against this backdrop, the notion that the world’s wealthiest countries and companies cannot simply consume less rings a little hollow.

A 2025 Mongabay investigation found that many carbon offset projects have overstated their impact, ignored Indigenous rights, and failed to deliver promised benefits. In tropical forest regions, only 1% of climate finance reaches Indigenous communities, despite their proven role in preventing deforestation.

During the workshops, facilitators ask villagers how the climate has changed. “Hotter,” says one. “More floods,” another adds. The seasonal rhythms are shifting. Fruiting periods are disrupted, rice harvests are less reliable, and wild animals are harder to find. Food security is becoming a real concern.

How we choose to finance the next phase of climate action matters. Indigenous communities, are, in many cases, the last and most effective stewards of the world’s remaining forests. In Sarawak, that much is undeniably true.

The villagers of the Upper Baram are not responsible for the crisis we face, but the forests they have protected may well hold part of the solution. If we are to meet this moment with integrity, we must direct funding not toward those who have sought to profit from destruction, but to those who have quietly and consistently stood in its way.

Carbon markets must be scrutinized, and justice must be at the center of any climate solution worth its name.

Fiona McAlpine is communications and project manager for The Borneo Project, a nonprofit working with Indigenous communities in Malaysian Borneo.

Related audio from Mongabay’s podcast: A discussion of how potential dam projects could impact rivers and Indigenous communities in Borneo with SAVE Rivers director Celine Lim, listen here: 

 See related coverage:

False claims of U.N. backing see Indigenous groups cede forest rights for sketchy finance

Indigenous people get less than 1% of climate funding? It’s actually worse (commentary)