Skip to main content

The Ethics of Carbon Neutrality: A Critical Examination of Voluntary Carbon Offset Providers


In this article, we explore the world’s response to the increasing impact of carbon emissions on the sobering threat posed by global warming: the carbon offset market. Though the market is a relatively new one, numerous offset providers have quickly emerged under both regulated and voluntary regimes. Owing to the lack of technical literacy of some stakeholders who participate in the market, no common quality or certification structure has yet emerged for providers. To the contrary, the media warns that a relative “cowboy” atmosphere prevails in the current environment, and that there are “widespread instances of people and organizations buying worthless credits that do not yield any reductions in carbon emissions” (Harvey and Fidler, Financial Times, 2007). At this point in the evolution of the market, only a handful of offset provider-rating schemes exist; and, even these systems leave consumers with few answers when they seek to find a means by which to ensure that the said systems are having their intended impact. The purpose of this article is, first, to provide a grounded understanding of the nature of the offset market, a tendency toward carbon neutrality as a possible point of equilibrium, and the ethical tensions that surround it from the perspective of the consuming public. Second, we outline the standards environment for offset providers to illustrate most effectively the need for a single set of criteria among providers that is readily understandable by the common consumer stakeholder. We then explore the differences among the providers and articulate the specific criteria upon which providers may be evaluated by this particular stakeholder constituency, by bringing together best practices based on currently available analyses. Finally, we share the results of preliminary data collection in connection with 117 offset providers and highlight early findings. These findings allow us comparing providers effectively and efficiently on a common scale that services both providers, who thereby have greater guidance for self-assessment purposes, as well as consumer stakeholders, who then have the ability to make useful and more informed choices about carbon emission reduction in the future.

This is a preview of subscription content, access via your institution.


  1. Aristotle: 2009, Nicomachean Ethics bk. III, ch. 12, l. 1119b, trans. Lesley Brown and David Ross (Oxford University Press, Oxford).

  2. Ball, J.: 2008, ‘Two Carbon-Market Millionaires Take a Hit as U.N. Clamps Down’, The Wall Street Journal, April 14,

  3. Banerjee, R. and A. Rao: 2007, ‘The Ethics of Carbon Trading’, The Economic Times, Dec. 11,

  4. Barry, J., 1999. Rethinking Green Politics. London: Sage.

    Google Scholar 

  5. Bentham, J. 1907. An Introduction to the Principles of Morals and Legislation. Oxford: Clarendon Press.

    Google Scholar 

  6. Broekhoff, D.: 2007, ‘Testimony Before the House Select Committee on Energy Independence and Global Warming’, in Voluntary Carbon Offsets: Getting What You Pay For (U.S. House of Representatives), July 18,

  7. Business for Social Responsibility: 2006, Offsetting Emissions: A Business Brief on the Voluntary Carbon Market (The Ecosystem Marketplace, San Francisco)

  8. Business for Social Responsibility. 2008. Offsetting Emissions: A Business Brief on the Voluntary Carbon Market. The Ecosystem Marketplace. Feb.

    Google Scholar 

  9. Copping, J.: 2007, ‘Carbon Offsetting Schemes not so Green’, The Telegraph, Aug 20.

  10. DePalma, A.: 2006, ‘Gas Guzzlers Find Price of Forgiveness’, The New York Times, April 22.

  11. Dhanda, K. 1999. A Market-Based Solution to Acid Rain: The Case of Sulfur Dioxide (SO2) Trading Program. Journal of Public Policy & Marketing, 18(2): 1-15.

    Google Scholar 

  12. Dincer, I., M. Rosen, 1998. Current and Future Perspectives on Energy Use and Environmental Impact. International Journal of Environment and Pollution. 10(2): 240-253.

    Article  Google Scholar 

  13. Doyle, P. and T. Erdmann: 2010, ‘Using Carbon Markets to Fund Forestry Projects: Challenges and Solutions’, DAIdeas 6, 3.

  14. Economist: 2006a, ‘Upset About Offsets’, The Economist 380(8489).

  15. Economist: 2006b, ‘Sins of Emission’, Economist 380(8489).

  16. Elgin, B.: 2007, ‘Another Inconvenient Truth’, BusinessWeek, Mar. 26,

  17. Environmental Data Services: 2008, ‘ENDS Guide to Carbon Offsets’,

  18. Eraker, H.: 2000, ‘CO2lonialism: Norwegian Tree Plantations, Carbon Credits, and Land Conflicts in Uganda’, NorWatch,

  19. Fleming, J. R. and B. R. Knorr: 1999, ‘History of the Clean Air Act’, American Meteorological Society,

  20. Friedman, T.: 2007a, ‘It’s Too Late for Later’, New York Times, Dec. 16,

  21. Friedman, T. L.: 2007b, ‘Live Bad, Go Green’, The New York Times, July 8,

  22. Gaba, Jeffrey. 1999. Environmental Ethics and Our Moral Relationship to Future Generations: Future Rights and Present Virtue. Columbia Journal of Environmental Law. 24:249.

    Google Scholar 

  23. Gore, A.: 2007, ‘So, Al Gore, What’s the One Thing We Can All Do to Tackle Climate Change?’, The Independent, July 7,

  24. Gosseries, A.: 2008, ‘Theories of Intergenerational Justice: A Synopsis’, Sapiens 1, 1,

  25. Hamilton, K., R. Bayon, G. Turner and D. Higgins: 2007, ‘State of the Voluntary Carbon Markets 2007: Picking up Steam. San Francisco: Ecosystem Marketplace & New Carbon Finance’,

  26. Hamilton, K., M. Sjardin, T. Marcello and G. Xu: 2008, Forging a Frontier: State of the Voluntary Carbon Markets (Ecosystem Marketplace & New Carbon Finance, San Francisco),

  27. Hamilton, K., M. Sjardin, A. Shapiro and T. Marcello: 2009, ‘Fortifying the Foundation: State of the Voluntary Carbon Markets 2009. A Report by Ecosystem Marketplace and New Carbon Finance’,

  28. Hanlon, M.: 2007, ‘The Carbon Cop-Out’, Daily Mail, Jan. 15,

  29. Harvey, F.: 2008, ‘Warning on Quality of CO2 Offsets’, Financial Times, Apr. 16,,dwp_uuid=3c093daa-edc1-11db-8584-000b5df10621.html.

  30. Harvey, F. and S. Fidler: 2007, ‘Industry Caught in Carbon ‘Smokescreen’’, Financial Times, April 25.

  31. Haya, B.: 2007, Failed Mechanism: How the CDM is Subsidizing Hydro Developers and Harming the Kyoto Protocol (International Rivers, Berkeley CA),

  32. Intergovernmental Panel on Climate Change: 2007, ‘Summary for Policymakers’,

  33. Kant, I.: 1996, ‘Groundwork of the Metaphysics of Morals’, in: M. Gregor (ed.), Practical Philosophy, The Cambridge Edition of the Works of Immanuel Kant (Cambridge University Press, Cambridge).

  34. Kollmuss, A., H. Zink and C. Polycarp: 2008, Making Sense of the Voluntary Carbon Market: A Comparison of Carbon Offset Standards (WWF, Germany).

  35. Levinas, 1999. Alterity and Transcendence. Athlone Press: London, UK.

    Google Scholar 

  36. Morgan, G. 2008. Everyone’s Profiting from Carbon Offsets. Too Bad the Environment Isn’t. The Globe and Mail. Jan. 21: B2.

    Google Scholar 

  37. Mouawad, J.: 2010, ‘Carbon Market Could Grow 33% This Year’, New York Times, Jan. 29,

  38. Patagonia, Inc.: 2009, ‘The Footprint Chronicles’,

  39. Point Carbon: 2009, ‘Carbon Market Monitor’, Jan 14,

  40. Public Broadcasting Service: 2003, ‘Deadly Smog’, Jan. 17,

  41. Raupach, M. R. et al.: 2007, ‘Global and Regional Drivers of Accelerating CO2 Emissions’, Proceedings of the National Academy of Science 104(24), 10288–10293,

  42. Rawls, J.: 1971, A Theory of Justice (Harvard University Press, Cambridge).

  43. Revkin, A.: 2007, ‘Carbon-Neutral is Hip, But is it Green?’, The New York Times, 29 April.

  44. Richardson, A.: 2006, ‘Carbon Credits – Paying to Pollute?’, 3 rd Degree,

  45. Rosenthal, E.: 2009, ‘Obama’s Backing Raises Hopes for Climate Pact’, New York Times, March 1,

  46. Russell, J.: 2007, ‘Are Emissions Offsets a Carbon Con?’, Ethical Corporation,

  47. Schneider, L.: 2007, Is the CDM Fulfilling its Environmental and Sustainable Development Objectives? An Evaluation of the CDM and Options for Improvement. Report Prepared for WWF by Öko-Institut E.V. Berlin (November, 2007).

  48. Singer, P.: 1993, Practical Ethics, 2nd ed. Cambridge University Press, Cambridge.

    Google Scholar 

  49. South African Human Rights Commission (SAHRC): 2009, ‘Comment to Parliament, Portfolio Committees and Select Committees on Climate Change, November 11.

  50. Stavins, R.: 2010, `In Defense of Markets', An Economic View of the Environment,

  51. Stern, L. N.: 2009, ‘Copenhagen Agreement Could Give us a ‘50-50 Chance’ of Avoiding Global Warming of more than 2°C’,

  52. Taylor, D.E. 2000. “The Rise of the Environmental Justice Paradigm: Injustice Framing and the Social Construction of Environmental Discourses.” American Behavioral Scientist 43(4):508–580.

    Google Scholar 

  53. Trexler Climate + Energy Services, Inc.: 2006, A Consumer’s Guide to Retail Carbon Offset Providers (Clean Air – Cool Planet, Portsmouth, NH),

  54. Union of Concerned Scientists: 2009, ‘Global Warming’,

  55. United Nations, Department of Economic and Social Affairs, Promoting Development: 2009, ‘Saving the Planet, E/2009/50/Rev.1 ST/ESA/319’,

  56. United Nations Development Programme (UNDP). 2007. Human Development Report 2007/2008: Fighting Climate Change, Human Solidarity in a Divided World, United Nations, New York.

    Google Scholar 

  57. United States Environmental Protection Agency: 2002, ‘US Climate Action Report – 2002’,

  58. Urbinato, D.: 1994, ‘London’s Historic “Pea-Soupers”. United States Environmental Protection Agency’, Summer,

  59. 2010, ‘Uncommon Goods: On Environmental Virtues and Voluntary Carbon Offsets’, Harvard Law Review 123, 2065 (note).

Download references

Author information



Corresponding author

Correspondence to Laura P. Hartman.

Additional information

The authors’ names are listed alphabetically.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Dhanda, K.K., Hartman, L.P. The Ethics of Carbon Neutrality: A Critical Examination of Voluntary Carbon Offset Providers. J Bus Ethics 100, 119–149 (2011).

Download citation

Key words

  • Carbon emissions
  • global warming
  • offsets
  • carbon neutrality
  • ethics
  • sustainability