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Carbon Offsets - Greenwashing or a legitimate Tool to Fight Climate Change?

Criticism of carbon offsetting is not hard to find and a lot of it is valid. Is it better to reduce emissions instead of offsetting them? Of course. Many think that carbon offsets fall short of expectations and draw attention away from more pressing challenges and urgently needed solutions, meaning simply cutting emissions.

However, carbon offsets are not intended to replace direct action but rather to enhance it or, in certain cases, to be the only option. As an example, airplanes can't fly without fossil fuels, at least until electric airplanes become a realistic option. The solution, therefore, is to compensate for emissions. I will say again: carbon offsets are not meant to replace direct actions to reduce carbon emissions but to complement those direct actions and assist in reducing overall global emissions. 

Other than just reducing emissions, offsetting remains the best practice to control environmental pollution and emissions but needs strict regulation and oversight. The EU ETS or Emissions Trading System as the largest carbon market globally offers an example of how policies can drive action and force companies to reduce their emissions and compensate when the results of the reduction efforts are not sufficient. However, the EU ETS is far from perfect, as highlighted by the World Wild Fund in their report from 2021.

WWF-ETSWWF's proposal to improve the EU ETS. Source:

Where do the accusations of greenwashing come from?

Not every carbon offset program offered is legitimate. There are issues with double-selling assets and natural resources and at times no way to track those. However, the vast majority of carbon offset platforms offer legitimate, verified projects.

Many see "net-zero pledges" as problematic exactly because they can reduce the urgency and necessity of reducing emissions, allowing companies to keep polluting, while simply purchasing their way out of emissions regulations.

The impacts of voluntary carbon offset projects can be very hard to measure, which is why Meliora works only with projects with a measurable real-life impact.

Lastly, some companies, while perhaps having their collective hearts in the right place, offer consumers the chance to offset their "carbon footprints" and make a difference, when the reality is that the vast majority of carbon emissions are created by a limited number of corporations.


The Advantages of Carbon Offsetting

The disadvantages, or rather criticisms are clear, but what about the upsides?

Carbon offsetting benefits both sides of the process by increasing the opportunities for companies to lower their carbon footprint while aiding environmental projects, carbon reduction and removal projects, and renewable energy installations that cannot always be self-financed or are unable to raise the necessary capital to scale.

Many firms cannot reduce their emissions as effectively as they would like. This can arise when a company wants to do more yet already has a tiny footprint (say a small software development company, as an example). Other industries, such as shipping or heavy equipment, currently have no low-carbon options to meet market expectations. Companies can offset emissions that they are unable to totally eliminate on their own by contributing to the financing of emission-reducing projects.

Although many buyback purchases are optional, they are necessary for some regions to comply with local laws and standards and avoid penalties. Another advantage of the carbon offset system is that it provides regulators with the tools they need to implement environmental policy.

Other companies rely on compensation to state unequivocally that all or a portion of their operations are "carbon neutral," if not "carbon negative." It also provides a platform for these companies to track their carbon footprint. Many customers nowadays prefer doing business with such companies.