Carbon offsets sound elegant in theory. Emit a ton of carbon here, fund a project that removes or prevents a ton there, and the math balances to zero. Companies proudly claim carbon neutrality while continuing business as usual.

But the offset market has a fundamental problem: it often creates an illusion of climate action while enabling—sometimes even accelerating—actual emissions. The accounting looks clean. The atmosphere doesn't care about accounting.

Understanding why offsets fail isn't about rejecting market mechanisms for climate action. It's about recognizing which approaches create genuine environmental value and which merely shuffle numbers on a spreadsheet while the planet warms.

Additionality is the core question in offset quality: would this emission reduction have happened without the offset funding? If a forest was already protected, paying to protect it again doesn't remove any carbon. You've purchased a certificate, not a climate benefit.

Testing additionality proves surprisingly difficult. Project developers have strong incentives to claim any activity as additional—that's how they generate offset credits. And proving a negative (that something wouldn't have happened) invites creative storytelling.

Studies consistently find massive additionality failures. Research on REDD+ forest protection projects found that 94% of credits examined didn't represent genuine emission reductions. Renewable energy projects in regions where clean energy was already economically competitive claimed credits for building what market forces would have built anyway.

The problem compounds over time. As clean technologies become cheaper and regulations tighten, more activities become standard practice. What genuinely needed offset funding in 2010 might happen automatically by 2025. But offset registries rarely retire credits when circumstances change.

Takeaway

An offset without proven additionality isn't a climate solution—it's permission to emit purchased with accounting fiction.

When you emit CO₂ by burning fossil fuels, that carbon affects the climate for centuries to millennia. When you store carbon in a forest, that storage lasts until the forest burns, dies from disease, gets logged, or succumbs to drought intensified by climate change itself.

This temporal mismatch creates hidden liabilities. Companies claim carbon neutrality based on forest credits while those forests face escalating risks. The 2020 California wildfires released carbon equivalent to years of the state's emission reduction efforts—including from forests that had generated offset credits.

Nature-based offsets face a cruel paradox: climate change makes the ecosystems we're counting on for storage less stable. Rising temperatures increase wildfire risk, pest outbreaks, and tree mortality. The tool we're using to address climate change becomes less reliable precisely because climate change is advancing.

Buffer pools—reserves of extra credits held against reversal risk—theoretically address this. In practice, buffer pools consistently underestimate actual reversal rates. They assume historical risk patterns predict future ones, ignoring that we're entering climate conditions with no historical precedent.

Takeaway

Matching century-scale emissions with decade-scale storage isn't offsetting—it's deferring the problem to whoever inherits the unstable carbon accounting.

Insetting redirects offset investment into emission reductions within a company's own value chain. Instead of paying someone elsewhere to plant trees, you fund efficiency improvements at your suppliers, transition your logistics to electric vehicles, or invest in regenerative agriculture for your raw materials.

The advantages compound. Insetting directly reduces your scope 3 emissions—often 70-90% of a company's total footprint—rather than claiming to neutralize them through external projects. The reductions are more verifiable because you control the systems being changed. And the investment builds long-term resilience in your own operations.

Insetting also solves the additionality problem more cleanly. When you pay a supplier to adopt cleaner technology they couldn't otherwise afford, the causal chain is clear. The investment made the change possible. There's no counterfactual guessing game about what would have happened anyway.

The approach requires more work than purchasing certificates. It means understanding your supply chain deeply, identifying high-impact intervention points, and building partnerships rather than transactions. But this harder path produces genuine emission reductions that improve your operations while contributing to actual climate progress.

Takeaway

Real climate impact comes from changing the systems you control, not from paying others to claim they changed systems you can't verify.

The offset market's failures aren't inevitable features of market-based climate solutions. They're symptoms of a system that prioritized transaction volume over environmental integrity, that made purchasing climate virtue easier than earning it.

Better frameworks exist. High-integrity offset standards with rigorous additionality testing, realistic permanence accounting, and conservative crediting can create genuine value. Insetting strategies can redirect climate investment toward verifiable impact.

The choice isn't between offsets and doing nothing. It's between climate accounting that satisfies spreadsheets and climate action that actually changes what enters the atmosphere.