Is Corporate Offsetting a Good Idea?

Abstract

Corporate offsetting is the practice of compensating for ongoing greenhouse gas emissions by funding, through the purchase of carbon credits, projects that seek to mitigate climate change. Offsetting has proven highly contentious in a world in which the scientific consensus holds that emissions must be cut quickly and significantly to prevent the worst consequences of climate change. This article assesses corporate offsetting and asks whether it has anything to offer. Against the backdrop of a high-stakes dispute over ‘Scope 3’ emissions – a type of indirect emissions – this article argues that offsetting and the voluntary carbon market can play a role as supporting tools for funding mitigation projects in a subset of cases where firms lack the power to influence Scope 3 emission sources.