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Fraud in carbon offset programs: Threats to market credibility and climate integrity

Author

Listed:
  • Beatah Sibanda

    (School of Accounting Sciences, North-West University, Potchefstroom, Republic of South Africa)

  • Banele Dlamini

    (School of Accounting Sciences, North-West University, Potchefstroom, Republic of South Africa)

Abstract

Carbon offset programs are central to global strategies for mitigating greenhouse gas emissions, yet growing evidence suggests that fraud undermines their environmental, social, and economic effectiveness. This study investigates the most common fraudulent practices in international carbon trading, focusing on overstatement of offsets, double counting, phantom projects, misclassification of emission reductions, and resale of expired or previously claimed credits. Using a qualitative desk-based literature review of peer-reviewed studies, policy reports, and investigative journalism, the research identifies how these fraud types distort carbon markets, mislead investors, and impede genuine emissions reductions. The findings reveal that fraudulent practices have systemic impacts on the triple bottom line: economic losses for investors, erosion of stakeholder trust, and failure to achieve real environmental benefits. The study underscores that structural weaknesses in project verification, registry governance, and regulatory oversight facilitate these practices. To restore market integrity, the research recommends robust verification protocols, transparent baselines, registry interoperability, and adherence to international standards such as the Core Carbon Principles. This work contributes to understanding how fraud in carbon offset programs threatens the credibility of climate finance mechanisms and highlights strategies to strengthen accountability and environmental integrity in carbon markets. Key Words:Fraud, Carbon Trading Industry, Carbon Offset Programs, Carbon Credits, Net Zero

Suggested Citation

  • Beatah Sibanda & Banele Dlamini, 2026. "Fraud in carbon offset programs: Threats to market credibility and climate integrity," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 15(1), pages 41-45, January.
    • Handle: RePEc:rbs:ijbrss:v:15:y:2026:i:1:p:41-45
    DOI: 10.20525/ijrbs.v15i1.4561
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    References listed on IDEAS

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    1. Heather C. Lovell, 2010. "Governing the carbon offset market," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 1(3), pages 353-362, May.
    2. K. Dhanda & Laura Hartman, 2011. "The Ethics of Carbon Neutrality: A Critical Examination of Voluntary Carbon Offset Providers," Journal of Business Ethics, Springer, vol. 100(1), pages 119-149, April.
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