Why It Matters
A recent Congressional Research Service report on voluntary carbon offsets reveals a market that has expanded dramatically, while the Trump Administration has begun dismantling federal oversight of the sector. The report, published July 15, details how offsets have become central to climate policy debates, even as integrity concerns mount and the government's approach to regulating them has shifted sharply.
Carbon offsets, or measurable reductions or avoidance of greenhouse gas emissions (GHG) used to compensate for emissions generated elsewhere, play a role in how countries and companies meet climate commitments. The Paris Agreement allows offsets to help nations meet their emissions goals, and private entities may choose to participate in that framework. The availability of offsets that do not reduce GHG concentrations in the atmosphere as expected could undermine climate change policy goals. When deciding on the scope of federal involvement, policymakers would face a central trade-off between addressing the potential quality and integrity concerns associated with voluntary carbon offsets and the potential consequences of addressing those concerns.
The Trump Administration has taken a different tack. Multiple federal actions on cutbacks to environmental funding have been halted or reversed. In September of 2025, the Commodity Futures Trading Commission (CFTC) withdrew guidance on voluntary carbon credit derivatives, stating it did not advance market transparency or liquidity and placed disproportionate focus on a particular class of derivatives. The U.S. Securities and Exchange Commission (SEC) proposed rescinding 2024 climate disclosure requirements entirely, after the acting chairman announced in February that the agency no longer supported the rule.
The Big Picture
The voluntary carbon market has grown five-fold over the last decade. The United States ranks second, only to India, in quantity of offsets issued by project location between 2004 and 2025. Globally, researchers estimated the total GHG emissions were 49,573 million MTCO2e in 2022; the U.S. alone produced 6,343 million MTCO2e.
The composition of U.S. offsets differs markedly from global patterns. Chemical processes account for 41 percent of dominant offset types in America, waste management for 22 percent (primarily methane capture at landfills), and forestry and land use for 20 percent. Globally, renewable energy dominates at 38 percent, with forestry and land use at 35 percent. Prices vary significantly: 2024 voluntary market rates ranged from $3 per metric ton of CO₂ equivalent for renewable energy to $9 for forestry and land use.
Quality remains contested. A 2021 study found roughly 50 percent of wind farm offsets in India would not meet an additionality test—whether emissions reductions would have occurred anyway.
The Bottom Line
The U.S. withdrawal from the Paris Agreement took effect Jan. 27, closing one avenue through which domestic offset policy intersected with international commitments.
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