"Offsets Without Abatement: How Carbon Markets Undermine Climate Action & How To Fix Them" by Seeun Jang
Article Title: Offsets Without Abatement: How Carbon Markets Undermine Climate Action & How To Fix Them
Author: Seeun Jang
Date Published: October 18, 2026
Publication: Agora Review
Category: Opinion Article
Discipline(s): Environmental Economics, Climate Policy
Keywords: carbon offsets; voluntary carbon market; additionality; leakage; permanence; carbon pricing; climate policy; decarbonization
Suggested Citation: Jang, Seeun. “Offsets Without Abatement: How Carbon Markets Undermine Climate Action & How To Fix Them” Agora Review, October 18, 2026.
Download Full Article PDF
Abstract
Carbon offset markets have emerged as an increasingly popular alternative to direct emissions reductions, allowing individuals and organizations to pay for reductions or removals elsewhere through activities such as reforestation, forest protection, or clean-energy projects. In theory, offsets can lower the global cost of emissions reduction by allowing actors with high abatement costs to finance reductions where they can be achieved more cheaply. They may also channel investment toward developing regions, supporting employment, land rights, and access to clean energy. However, a deeper examination reveals that most carbon offset markets are deeply flawed and that, without better regulation and oversight, they risk undermining the environmental goals they are designed to serve. This article examines three major effectiveness problems: additionality, leakage, and permanence. Many projects fail to represent reductions that would not otherwise have occurred, protecting one area can simply shift harmful activity elsewhere, and stored carbon can later be released through wildfire or land clearing. These vulnerabilities are compounded by misaligned incentives throughout the certification process. Project developers, standard setters, verification bodies, and buyers can all benefit from inflated credit volumes, producing systematic “offset inflation” in which claimed emissions reductions exceed the reductions that actually occur. Carbon offset markets may still hold potential, but making them work will require a dramatic overhaul of the system. Greater transparency, clearer public reporting, stronger oversight, and reforms that reward rigorous scrutiny rather than the volume of credits issued could help restore market integrity. Ultimately, offsets may still serve as a valuable complement to conventional carbon taxes and direct decarbonization efforts, but their success will depend less on their elegant economic logic than on whether they can be redesigned and governed with sufficient rigor.
Author’s Note
My interest in this topic grew partly out of working on BinGo, an app concept I co-created to help people find public trash and recycling bins. One thing I learned from that experience was that if you make the ‘right’ choice easier or more rewarding, people are more likely to make it. That revelation made me interested in the larger question of how incentives can be used to shape environmental behavior, not just for individuals, but for entire markets. That’s what initially drew me to the topic of carbon offsets, because they also rely on incentives to address an environmental issue. If one company can eliminate a ton of emissions only at great cost while another project can eliminate the same amount much more cheaply, it makes sense to direct resources toward the cheaper reduction. In theory, everyone benefits. The problem is that incentives only work when they are pointed in the right direction. In the current offset market, developers make more money when they generate more credits, certifiers benefit from approving them, and buyers often prefer cheaper offsets. That creates a system in which almost everyone has something to gain from making an offset look better than it really is. The deeper I dove, looking at issues such as additionality, leakage, and permanence, the more I realized that a market designed to reward climate action can end up rewarding the appearance of climate action instead. I still think there is something valuable in the basic idea behind carbon markets. My argument is not that offsets should disappear completely, but rather that the incentives governing them need to change. For me, that is the more interesting lesson. Markets can, in fact, help solve environmental problems, but only when the rules make actually doing good more rewarding than simply looking good.
References
[1] United Nations. Causes and effects of climate change [Internet]. United Nations; n.d. [cited 2025 Dec 16]. Available from: https://www.un.org/en/climatechange/science/causes-effects-climate-change
[2] van der Ploeg F. Carbon pricing under uncertainty. Int Tax Public Finance. 2021;28(5):1122–1142. Available from: https://doi.org/10.1007/s10797-021-09686-x
[3] Bushnell JB. The economics of carbon offsets [Internet]. National Bureau of Economic Research; 2010. Available from: https://www.nber.org/system/files/chapters/c12156/revisions/c12156.rev0.pdf
[4] Battocletti V, Enriques L, Romano A. The voluntary carbon market: market failures and policy implications [Internet]. European Corporate Governance Institute; 2023. Available from: https://www.ecgi.global/sites/default/files/working_papers/documents/thevoluntarycarbonmarket.pdf
[5] Newlin J, Moffa A. Partial additionality. NYU Environmental Law Journal. 2025. Available from: https://nyuelj.org/wp-content/uploads/2025/02/Newlin-Moffa-Partial-Additonality.pdf
[6] West TAP, Börner J, Sills EO, Kontoleon A. Overstated carbon emission reductions from voluntary REDD+ projects in the Brazilian Amazon. Proc Natl Acad Sci U S A. 2020;117(39):24188–24194. Available from: https://doi.org/10.1073/pnas.2004334117
[7] Trencher G, Nick S, Carlson J, Johnson M. Demand for low-quality offsets by major companies undermines climate integrity of the voluntary carbon market. Nat Commun. 2024;15:6863. Available from: https://doi.org/10.1038/s41467-024-51151-w