Finance

Carbon Offsets, a Much-Criticized Climate Tool, Get Federal Guidelines

The Biden administration on Tuesday laid out for the first time a set of broad government guidelines around the use of carbon offsets in an attempt to shore up confidence in a method for tackling global warming that has faced growing criticism.

Companies and individuals spent $1.7 billion last year voluntarily buying carbon offsets, which are intended to cancel out the climate effects of activities like air travel by funding projects elsewhere, such as the planting of trees, that remove carbon dioxide from the atmosphere, but that wouldn’t have happened without the extra money.

Yet a growing number of studies and reports have found that many carbon offsets simply don’t work. Some offsets help fund wind or solar projects that likely would have been built anyway. And it’s often extremely difficult to measure the effectiveness of offsets intended to protect forests.

As a result, some scientists and researchers have argued that carbon offsets are irredeemably flawed and should be abandoned altogether. Instead, they say, companies should just focus on directly cutting their own emissions.

The Biden administration is now weighing in on this debate, saying that offsets can sometimes be an important tool for helping businesses and others reduce their emissions, as long as there are guardrails in place. The new federal guidelines are an attempt to define “high-integrity” offsets as those that deliver real and quantifiable emissions reductions that wouldn’t have otherwise taken place.

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