Carbon offsets have failed for 25 years, and most should be phased out

Academics at the University of Oxford and the University of Pennsylvania have conducted the most comprehensive review of evidence on the effectiveness on carbon offsetting to date and concluded the practice is ineffective and riddled with “intractable” problems. The review is published in the Annual Review of Environment and Resources.

Carbon offsets are projects that generate credits meant to represent the reduction, avoidance, or removal of greenhouse gas (GHG) emissions from the atmosphere. The first carbon offset was generated in 1989. The authors call for the phasing out of most credits except those generated by permanent carbon dioxide removal.

“We must stop expecting carbon offsetting to work at scale. We have assessed 25 years of evidence and almost everything up until this point has failed,” says co-author Dr. Stephen Lezak, researcher at the Smith School of Enterprise and the Environment. “The present market failures are not due to a few bad apples but rather to systematic, deep-seated problems, which will not be resolved by incremental changes.”

“We hope our findings provide a moment of clarity ahead of COP30: These junk offsets—the ones not backed by permanent carbon removal and storage—are a dangerous distraction from the real solution to climate change, which is rapid and sustained emission reductions,” says lead author Dr. Joseph Romm, Senior Research Fellow at the Penn Center for Science, Sustainability and the Media.

The most severe issues uncovered by the research are nonadditionality (generating credits without reducing emissions), impermanence, leakage, double counting, “perverse incentives,” and the “gameability” of crediting systems, where bad actors have been able to routinely circumvent even well-designed rules. Far from solving these problems, Article 6 of the Paris Agreement, which was finalized at COP29, simply restated “long-ignored tenets of carbon market development, with the specious expectation that this time the outcomes might differ significantly,” the authors say.

“Despite efforts to implement safeguards, carbon offset projects continue to face documented cases of weak accountability, risking the perpetuation of neocolonial patterns of appropriation. While nature-based projects can deliver local benefits, these should be financed through mechanisms other than carbon credits, such as contribution claims where projects are financed while still ensuring that purchasing entities are responsible for reducing their own emissions,” says co-author Amna Alshamsi, a doctoral researcher at the University of Sussex’s School of Global Studies.

Previous research has shown how offset programs routinely overestimate their climate impact, in many cases by as much as a factor of 10 or more.

Going forward, all offset markets should prioritize developing high-integrity, durable CDR and storage—with long-term measurement and verification—the authors conclude, while recognizing that effective and scalable CDR may not be possible, and will certainly require intensive research and investment.

This approach aligns with the Oxford Offsetting Principles, which encourage companies to reduce emissions first and foremost, and to transition to durable carbon removal offsetting for residual emissions.