Companies can hide carbon offsets that don't work — as long as nobody local notices

A World Bank study found that companies report their carbon offsets differently depending on who's watching. When local communities can see the offset project, companies report lower numbers. When visibility is low, they report higher numbers — suggesting they're inflating claims when nobody's checking. This means carbon offset markets reward opacity, not actual emissions reductions.

Carbon offsets are supposed to let companies pay for emissions cuts elsewhere instead of cutting their own. But if companies can game the reporting based on who's watching, the whole system becomes a way to buy credibility without buying actual reductions. The structural problem is simple: there's no cost to lying if you control who sees the data. Companies face pressure to show emissions progress to investors and regulators, but they face no penalty for overstating offset quality if the communities where those offsets happen can't verify the claims or don't have a way to report back.