The market for offsets is booming as companies seek to burnish their green credentials. But only some investments make a difference.

Last week, JetBlue announced it will offset its 15 billion to 17 billion pounds of greenhouse gas emissions by purchasing carbon credits and pumping cleaner-burning aviation fuel into planes landing at San Francisco International Airport. Great! Or is it? American corporations across the economy are trying to build up their green credentials, and carbon offsets seem to be the hammer of choice.
Investment and university pension funds, cement manufacturers, home heating distributors, tech giants like Google and Amazon, and the ride-sharing firm Lyft all say they are reducing their carbon footprint through similar offsets. Yet some critics worry the programs are an excuse to not take tougher measures to curb climate change. If not done right, the purchase of offsets can act as a marketing campaign that ends up providing cover for companies climate-harming practices.
When a company buys offsets, it helps fund projects elsewhere to help reduce greenhouse gas emissions, such as planting trees in Indonesia or installing giant machines inside California dairies that suck up the methane produced by burping and farting cows and turn it into a usable biofuel. What offsets dont do is force their buyer to change any of its operations.
Supporters of offsets say they are only an acceptable tool once companies have done everything they can to pollute less, such as tightening up manufacturing processes, cutting down on office heating, or making deliveries trucks run on cleaner fuels. Purchasing carbon offsets is clearly better than doing nothing, says Cameron Hepburn, who directs Oxford Universitys economics of sustainability program. They can also help finance emerging green practices, technologies, and services that otherwise might struggle to find customers. We know we will have to remove a lot of carbon dioxide from the atmosphere, and offsets are helpful in priming that market, Hepburn says. But he and others caution that carbon offsets still need third-party verification to make sure they do what they are supposed to do, and that the specific carbon-reducing action wouldnt have been taken otherwise.
Thats where it gets messy, says Barbara Haya, a research fellow at the University of California, Berkeley, where she studies the effectiveness of carbon offset programs. What would JetBlue have done if they couldnt buy offsets, Haya says. Would they have put money into efficiency of the planes, or invested in future biofuels to create a long-term alternative to fossil fuels? Thats the fundamental question we have to ask for voluntary offsets: How much is it taking the place of real long-term solutions?
Haya points to JetBlues investment in sustainable aviation fuel as a big plus, unlike some airlines that only buy the offset and continue with business as usual. Haya is helping the University of Californias 10 campuses become carbon neutral by 2025. To reach that goal, the university system will have to both cut back on energy use and purchase offsets. Because solar and wind power are now price-competitive with fossil fuel-generated electricity in California, using those renewable sources of energy is good for the planet and helps the university reduce its emissions, but it wont qualify as a carbon offset, Haya says.
Instead, the big push in California now is for forest regeneration (namely, planting more trees) and changing farming practices. Disney, ConocoPhillips, and Poseidon Resources bought $6.7 million worth of offsets to restore and replant a 100-acre parcel of a state park in the mountains west of San Diego. In 2018, the latest year for which data is available, such nature-based solutions accounted for a reduction of 100 million metric tons of CO2 globally, according to a recent report by the nonprofit group Forest Trends. That reflects about $300 million in purchased offsets.