Alternatives to offsetting

The document argues for a shift from the 'compensation' model of carbon offsetting to a 'contribution' model known as beyond value chain mitigation (BVCM). It examines several climate impact funds—including 1% for the Planet, Frontier, and Milkywire—finding that while they generally support high-impact climate action and avoid misleading neutrality claims, there is a systemic need for clearer BVCM metrics and more explicit guidance on corporate claims to prevent greenwashing.

• The traditional 'tonne-for-tonne' offsetting model is fundamentally flawed because a single carbon credit cannot reliably counterbalance one tonne of CO2 on climate-relevant timeframes and often lacks a physical link to the buyer's operations.
• A peer-reviewed study indicated that over 80% of carbon credits from more than 2,000 projects (totaling 812 million credits) likely have a significantly lower climate impact than claimed.
• The European Union is prohibiting offsetting claims for goods and services, such as 'carbon neutral milk' or 'climate neutral flights', starting in September 2026 to combat greenwashing.
• Climate impact funds generally prioritize funding over financial returns, which increases the likelihood of supporting high-impact projects and reduces the risk of low-quality outcomes common in the voluntary carbon market.
• The lack of uniform BVCM impact metrics can be a disadvantage for comparability, but it also allows funds to support 'high-hanging fruit'—transformative, high-risk, or early-stage projects that do not fit strict carbon crediting mechanisms.
• Many climate impact funds act as an oversight body, using technical and scientific expertise to vet projects and monitor outcomes, which can enhance the integrity of funded activities compared to traditional carbon markets.
• BVCM contributions should be viewed as a corporate responsibility for ongoing emissions damage rather than optional philanthropy, provided that internal decarbonization remains the absolute priority.
• There is a critical gap in the landscape regarding clear guidance for companies on the specific wording of claims they can make after contributing to impact funds, which increases the risk of unintentional greenwashing.

APA

Nilles, L. O., & Pavia, E. (2025). Alternatives to offsetting. Carbon Market Watch. https://carbonmarketwatch.org/wp-content/uploads/2025/12/2025_12_Briefing_alternatives_to_offsetting.pdf

Chicago

Nilles, Lindsay Otis, and Edoardo Pavia. Alternatives to offsetting. Carbon Market Watch, 2025. https://carbonmarketwatch.org/wp-content/uploads/2025/12/2025_12_Briefing_alternatives_to_offsetting.pdf.

Wikipedia

{{cite report |last1=Nilles |first1=Lindsay Otis |last2=Pavia |first2=Edoardo |title=Alternatives to offsetting |publisher=Carbon Market Watch |date=November 2025 |url=https://carbonmarketwatch.org/wp-content/uploads/2025/12/2025_12_Briefing_alternatives_to_offsetting.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nilles2025alternatives, author = {Nilles, Lindsay Otis and Pavia, Edoardo}, title = {{Alternatives to offsetting}}, institution = {Carbon Market Watch}, year = {2025}, month = nov, url = {https://carbonmarketwatch.org/wp-content/uploads/2025/12/2025_12_Briefing_alternatives_to_offsetting.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }