Regulatory scrutiny is beginning to fall over the $100 million a year carbon offset market. On January 8th the FTC held its first public hearing to investigate advertising and deceptive practices in the sale of carbon offsets to consumers. These include “double counting� of emissions reductions and investing in projects with little or no mitigation impact. The carbon offset market is effectively unregulated, with a handful of third parties buying, selling, and investing carbon offsets on behalf of consumers and companies alike. While some carbon offsets are effective, the vast majority are having a minimal or non existent impact on global emissions reduction, and primarily serve to provide a green veneer for crunchy consumers and corporations seeking to burnish their image during a slumping economy. Fraud, however, is not the real crime here. Companies like Dell, General Electric, and Delta Airlines, as well as the roughly 30 carbon offset intermediaries, are tapping into consumer desire to invest in carbon mitigation strategies. This is misplaced capital that could be going towards building renewable energy capacity, developing new green technologies, or buying energy efficient home appliances. Ultimately, environmentalism needs to realize its now a market, not a social movement, and we’re not playing with Monopoly money. The decisions companies and consumers make have real consequences, and the invested capital represents real opportunities, not charitable donations.