One Young India Press · The OYI Review

Global Emissions and Carbon Offsetting: Examining Conservational Approaches and Regulatory Gaps

By Vinayak Raj

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"Allowing carbon emissions to grow under the disguise of offsetting is not a pathway to sustainability but a dangerous perpetuation of malpractice."

Abstract

This paper addresses one of the most critical global challenges of our time: the complex fabric of carbon emissions and its far reaching consequences, with a focus on both global and Indian contexts. It examines the nature, scale and impacts of emissions, which are being dangerously accelerated by rapid urbanisation and industrialisation, affecting everything from daily life to long term environmental stability. The paper further analyses the strategies and legislative frameworks designed to mitigate these emissions while simultaneously empowering key stakeholders, such as indigenous communities, who are integral to effective conservation.

The analysis delves into the mechanisms and outlook of carbon offsetting, critically evaluating the widespread challenges that undermine its potential. While often promoted as an efficient pathway to sustainability, this paper exposes critical loopholes, including greenwashing, inequitable trading practices and the proliferation of low quality offsets. These flaws not only compromise positive climate outcomes but also diminish the ripple effect of genuinely effective projects. Furthermore, it highlights how the commodification of carbon credits, driven largely by multinational corporations, erodes credibility and long term viability, a problem starkly illustrated by a case study on the C-Quest Capital carbon credit scandal.

The paper concludes by analysing existing laws and future commitments, advocating for a reformed system built on stringent monitoring, transparent reporting and amendments to past schemes that have lost momentum. Ultimately, it serves as a warning that without fundamental reform, carbon offsetting risks serving as a convenient escape for polluters rather than a true pathway to decarbonisation, making this an urgent and crucial topic of global concern.

The Dual Challenge: Rising Global Emissions and Fragile Accountability

Global carbon emissions have been setting record highs for several decades, creating an urgent need for accelerated and sustainable climate action. In 2024, fossil fuel carbon dioxide emissions reached 37.4 gigatonnes on the Global Carbon Project's measure, a 0.8% increase on 2023. Once land use change of about 4.2 gigatonnes is added, total anthropogenic CO2 emissions hit a record 41.6 gigatonnes, up from 40.6 gigatonnes the previous year (Global Carbon Budget 2024). A slightly different figure often quoted alongside this, the International Energy Agency's energy related CO2 total, reached an all time high of 37.8 gigatonnes in 2024. The two numbers are not in conflict: the IEA measure counts emissions from both fuel combustion and industrial processes, so it sits a little above the Global Carbon Project's fossil fuel only estimate (IEA, Global Energy Review 2025). Whichever accounting is used, the world's emissions trajectory remains alarmingly upward despite the formation of global committees and the expansion of renewable energy.

India, with a population of 1.4 billion and consistent GDP growth, faces a continuously rising energy demand. As the fifth largest energy consumer globally, India's consumption exceeds 524 million tonnes of oil equivalent annually, placing it at the heart of the global energy and climate dialogue. The energy sector is the single largest contributor to global greenhouse gas emissions, accounting for roughly three quarters of the total, about 73% when all gases are counted (Our World in Data, based on Climate Watch and the IEA). Within this, electricity and heat generation form the largest single source, transport adds a further large share, and road transport alone is responsible for roughly 70% of all transport related emissions. Fossil fuels continue to dominate the global energy mix, comprising about 81.5% of primary energy consumption in 2024 (Energy Institute, Statistical Review of World Energy).

Compounding this crisis, carbon accountability remains perilously weak. Multiple investigations have revealed deep seated faults in offsetting schemes. A peer reviewed study in Science found that many forest based offsets, particularly those issued under REDD+ frameworks, did not represent genuine emission reductions because their deforestation baselines were exaggerated (West et al., Science, 2023). Fraudulent and low integrity practices within carbon markets have not only eroded credibility but also neutralised the impact of authentic projects. These outcomes raise serious questions about corporate transparency and expose the intricate challenge of balancing energy security and economic growth with the urgent need for genuine decarbonisation.

The Emissions Outlook: A Global and Indian Perspective

With energy related CO2 emissions touching a ceiling of 37.8 gigatonnes in 2024 and atmospheric CO2 levels reaching approximately 422.5 ppm, both the International Energy Agency and the Global Carbon Budget signal the continued dominance of fossil fuels despite the significant growth of renewables (IEA, Global Energy Review 2025). The IEA's World Energy Outlook 2024 projects that demand for coal, oil and gas will each peak by 2030, even under current policies (IEA, World Energy Outlook 2024).

India's role in this outlook is crucial. The country accounts for about 8% of total global CO2 emissions, and its fossil fuel emissions grew by 4.6% in 2024, reflecting its immense energy needs. Concurrently, India has made real strides in sustainability. Its total installed power capacity reached about 485 gigawatts by June 2025, and in the same month non fossil sources crossed the halfway mark, close to 50% of installed capacity, a milestone reached roughly five years ahead of the target set in India's Nationally Determined Contribution (Press Information Bureau, Government of India). This indicates a strategic shift, yet conventional sources, primarily coal, still generate the bulk of the country's electricity. Looking ahead, India aims for 500 gigawatts of non fossil capacity by 2030 and has committed to a net zero goal by 2070 in its UNFCCC submissions (India's Updated First NDC, UNFCCC).

The future trajectory of emissions is deeply connected to surging energy demand, driven by rising living standards, urbanisation and industrialisation. In developing nations like India, aspiring to economic self reliance, energy needs are escalating rapidly. The IEA projects that India will surpass the European Union as the world's third largest energy consumer by 2030. Sectorally, electricity, transport and industry continue to dominate demand, and India's oil demand is projected to grow by around one million barrels per day by 2030, making it a primary driver of global oil demand growth.

However, this energy trajectory carries profound environmental consequences. India's total greenhouse gas emissions rose by 6.1% in 2023, yet its per capita emissions of 6.6 tonnes CO2 remain below the global average. The climate impacts are already undeniable: India's average temperature rose by 0.7 degrees C between 1901 and 2018, fuelling glacier retreat, rising sea levels and extreme weather events. The economic losses are equally stark. Mounting heat stress alone may cost India up to 5.8% of its working hours by 2030, equivalent to millions of full time jobs.

Current Provisions and Suggested Implementations

1. Accelerating the Renewable Energy Transition

Current Provisions: The global push for renewable energy is gaining momentum. In 2023, renewables accounted for about 30% of global electricity generation. China alone added 217 gigawatts of renewable capacity, more than the total installed capacity of many large economies. The EU has pledged a 55% reduction in net greenhouse gas emissions by 2030, leaning heavily on wind and solar.
Suggested Implementations: To integrate renewables effectively, nations must increase investment in grid modernisation and energy storage. The IEA has estimated that a large scale increase in annual clean energy investment, on the order of an additional 1.2 trillion dollars a year, is the kind of step change required to bend the global emissions curve down towards the 1.5 degrees C target of the Paris Agreement.

2. Improving Carbon Pricing Mechanisms

Current Provisions: As of 2025, around 80 carbon pricing initiatives, that is carbon taxes or emissions trading systems, are active globally, together covering about 28% of greenhouse gas emissions, up from 24% a year earlier (World Bank, State and Trends of Carbon Pricing 2025). The EU Emissions Trading System, the world's largest carbon market, has helped cut emissions from its covered sectors by about 50% since 2005 as of 2024 (European Commission).
Suggested Implementations: Expanding carbon pricing to cover a far larger share of global emissions by 2030, and steadily raising price levels, would generate substantial public revenue. In 2025 alone, carbon pricing mobilised over 100 billion dollars for public budgets. Redirecting such funds towards green infrastructure would accelerate the shift away from fossil fuel dependence, especially in developing economies.

3. Mandating Energy Efficiency Upgrades

Current Provisions: Global investment in energy efficiency reached about 650 billion dollars in 2023, focusing on green buildings, vehicles and appliances. These improvements prevented an estimated 5 gigatonnes of CO2 emissions between 2010 and 2022.
Suggested Implementations: Stricter, mandatory standards are needed. Upgrading global building codes could cut roughly 2.5 gigatonnes of CO2 annually by 2030, while electrifying transport fleets could reduce oil demand by several million barrels per day by 2035.

4. Enhancing Habitat Conservation and Nature Based Solutions

Current Provisions: Reforestation and afforestation projects absorb roughly 2 gigatonnes of CO2 annually, but this is offset by the 3.5 gigatonnes emitted from ongoing deforestation. However, stricter policies are showing results. Brazil's Amazon deforestation rate dropped by about 50% in 2023 following enforcement actions such as Operation Guardians of the Biome.
Suggested Implementations: Scaling high integrity nature based solutions, including well governed REDD+ projects, could prevent up to 5 gigatonnes of CO2 annually by 2030. Integrating biodiversity credits with carbon credits would enhance ecological resilience and unlock new funding streams, provided the integrity failures discussed later in this paper are resolved first.

5. Driving Industrial Decarbonisation

Current Provisions: Heavy industries such as steel and cement account for close to 30% of global CO2 emissions, and aviation emissions are projected to grow steeply by 2050 without intervention. Progress is emerging through pilot projects, such as hydrogen based steel plants in Europe and India, which use hydrogen instead of coal and release water as a by product.
Suggested Implementations: Investing in green hydrogen and Carbon Capture, Utilisation and Storage could cut industrial emissions by several gigatonnes annually by 2050. For aviation, scaling Sustainable Aviation Fuels to a majority of fuel use by 2050 could sharply reduce sector emissions.

6. Electrifying Transport and Boosting EV Adoption in India

Current Provisions: Transport contributes nearly 10% of India's CO2 emissions. India launched the FAME II scheme to target 30% EV penetration by 2030. While EV sales grew by over 150% in 2023, they still represent less than 2% of the total vehicle stock.
Suggested Implementations: Expanding EV adoption through localised battery manufacturing, faster charging infrastructure and fiscal incentives is critical. Transitioning a meaningful share of new two wheelers and cars to EVs could abate substantial volumes of CO2 annually by 2030, while also reducing urban air pollution.

Carbon Offsetting and Credits: Current Scenario

Carbon offsetting allows entities to compensate for their emissions by investing in projects that reduce or remove emissions elsewhere, through activities such as reforestation, renewable energy or methane capture. These projects generate carbon credits, where one credit represents one tonne of CO2 equivalent avoided or removed.

Credits are particularly attractive for hard to abate sectors. The aviation industry, for example, which accounts for about 2.5% of global CO2 emissions, relies heavily on them. Under the CORSIA scheme, the Carbon Offsetting and Reduction Scheme for International Aviation, airlines are projected to require millions of credits annually to meet their carbon neutral growth commitments.

Fuelled by this demand, industry analysts value the global carbon credit market at around 669 billion dollars in 2024, with one widely cited market research projection expecting it to grow towards 16 trillion dollars by 2034 (Precedence Research, June 2025). Such long range forecasts should be read with caution, since they depend heavily on assumptions about regulation and demand. The much smaller voluntary carbon market, driven by net zero commitments from corporate giants such as Microsoft and Shell, is likewise forecast to expand sharply this decade. While direct emissions cuts must remain the priority, a well regulated carbon credit system can play a supportive role by channelling finance into conservation and sustainable technologies.

Unpacking the Loopholes: The Credibility Crisis in Carbon Markets

The concept of carbon offsetting is built on financing projects that reduce emissions, from forest protection under REDD+ to engineered solutions such as Direct Air Capture. Yet the voluntary carbon market, which peaked at about 1.9 billion dollars in 2022, saw its value fall to roughly 723 million dollars in 2023, a decline of around 61%, amid a widespread crisis of credibility (Ecosystem Marketplace; The Guardian).

This crisis stems from systemic loopholes that undermine the claimed climate benefits:

False Additionality and Inflated Baselines: Many projects, particularly in forestry and cookstove programmes, claim emission reductions that would have occurred anyway. A peer reviewed analysis found that more than 90% of the rainforest offset credits issued by the largest provider did not represent genuine emission reductions, because their deforestation baselines were exaggerated (West et al., Science, 2023; Carbon Brief).
Leakage: When deforestation is stopped in one protected area, the activity is often displaced to a nearby region, resulting in little or no net change in emissions.
Double Counting: The same emission reduction is sometimes claimed by both the host country and the credit buyer, a failure of international registries and coordination.

These flaws have severe consequences. Over crediting floods the market with low quality offsets, causing prices to collapse. Avoided deforestation credits, for instance, fell from about 12 dollars per tonne in 2021 to just 2 to 3 dollars in 2023. This diverts capital from high integrity solutions and allows corporations to purchase cheap, near meaningless offsets to greenwash their inaction. The problem is worsened by poor disclosure of value chain, or Scope 3, emissions. CDP data show that a company's Scope 3 emissions are on average about 26 times larger than its direct, Scope 1 and 2, emissions, and typically make up roughly three quarters of its total footprint, yet only around 15% of disclosing companies have set any Scope 3 reduction target (CDP). Offsets are therefore too often used to paper over the largest and least measured part of corporate emissions.

A striking example is the case of C-Quest Capital. The company sold millions of dollars worth of carbon credits from cookstove projects in Africa and Asia, but investigations revealed inflated usage rates and exaggerated savings. In October 2024, United States regulators moved against its former chief executive: the Commodity Futures Trading Commission charged him with fraud over misleading reports to registries and reviewers, in what it described as its first fraud action in the voluntary carbon credit market, alongside parallel criminal and securities cases (CFTC; Wall Street Journal). The episode highlights how weak verification can lead to the proliferation of non additional credits and catastrophic damage to market trust.

Forging a Path Forward: Recommendations for a High Integrity Market

1. Enforce the Integrity Council's Core Carbon Principles

Current Provision: The Integrity Council for the Voluntary Carbon Market has established science based Core Carbon Principles for high quality credits. In June 2024 it approved its first CCP aligned methodologies, initially covering landfill gas and ozone depleting substance projects, and by the time of COP29 the first high integrity CCP labelled credits were emerging (ICVCM).
Recommendations: Mandate the use of CCP labelled credits and accelerate the adoption of CCP aligned methodologies across all project types. Governments should build on the early support shown by jurisdictions such as the United States, the United Kingdom and Singapore in formally recognising the CCP framework.

2. Mandate ISO 14068 for Carbon Neutrality Claims

Current Provision: Published in late 2023 and taking effect through 2024, the ISO 14068-1 standard replaces outdated criteria and establishes a clear hierarchy for achieving carbon neutrality, prioritising emissions reduction before offsetting.
Recommendations: Make adherence to ISO 14068-1 mandatory for corporate offset and carbon neutrality claims. This includes detailed disclosure of project IDs, methodologies and permanence risks, thereby eliminating misleading claims.

3. Implement Meta Registries to Prevent Double Counting

Current Provision: S&P Global is developing a Carbon Credit Meta Registry, supported by initiatives such as the Climate Warehouse, to provide cross registry transparency.
Recommendations: Accelerate the development and adoption of such meta registries to create a single source of truth that prevents a credit from being issued or counted more than once.

4. Require Comprehensive Scope 3 Disclosures

Current Provision: Most large disclosing firms report their direct, Scope 1 and 2, emissions, but far fewer fully account for Scope 3, which typically makes up the majority of a company's total footprint and, as noted above, is on average many times larger than direct emissions.
Recommendations: Expand mandatory Scope 3 reporting to all large firms, including private ones. Accurate value chain accounting will ensure offsets supplement a robust emissions reduction strategy, rather than substituting for it.

5. Leverage Technology for Monitoring, Reporting and Verification

Current Provision: A major obstacle in carbon markets is weak project verification, the same weakness that enabled the C-Quest Capital case.
Recommendations: Systematically integrate satellite and artificial intelligence technologies for Monitoring, Reporting and Verification. Satellites can provide near real time data on deforestation, methane leaks and industrial emissions. AI algorithms can analyse vast datasets to detect anomalies, cross check claims across registries and verify project integrity, thereby minimising the risks of false additionality and leakage.

Conclusion

This paper's analysis of global greenhouse gas emissions and the flawed mechanisms of carbon offsetting should evoke a sense of profound responsibility and catalyse robust action. We are stewards of a single blue planet, and its future cannot be sacrificed to corporate greed or regulatory inaction. The path forward requires a systemic overhaul built on stringent laws, transparent and technology driven offsetting methods, and unwavering collective action. The July 2025 advisory opinion of the International Court of Justice, which held that states have binding legal obligations to protect the climate system, adds fresh legal weight to that demand (ICJ; Reuters). Only by transforming carbon offsetting from a tool of disguise into an instrument of genuine climate finance can we hope to build a sustainable and habitable world for generations to come.