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Publication Date

4-12-2026

Abstract

As companies increasingly embrace carbon-neutrality commitments, many rely on the voluntary carbon market to offset their emissions rather than reduce them directly. Regulatory and consumer scrutiny has focused on the widespread use of “phantom” carbon credits, i.e., credits that fail to produce meaningful climate benefits. But less attention has been paid to what this Note terms “colonial” carbon credits: those that may technically reduce emissions but do so at the expense of communities abroad. These projects may contribute to land dispossession, human rights abuses, and threats to public and environmental health. Yet, current regulatory and legal frameworks, with their focus on phantom credits, are ill-equipped to provide remedies for affected communities.

The Alien Tort Statute (ATS) can be a powerful tool for holding actors accountable for human rights abuses occurring outside of U.S. borders. It is true that the Supreme Court’s recent decisions in Kiobel v. Royal Dutch Petroleum Co., Jesner v. Arab Bank, PLC, and Nestlé USA, Inc. v. Doe heightened the requirements for a domestic nexus, thereby whittling away at the ATS’s reach. But these decisions have not foreclosed its use entirely. The direct financial and operational involvement of U.S. corporations in carbon projects distinguishes colonial credit cases from prior ATS litigation concerning traditional supply chains. By examining the structural flaws of the voluntary carbon market, the limitations of existing enforcement actions and consumer litigation, and the evolving ATS doctrine in the wake of Nestlé v. Doe, this Note both argues that the ATS still offers a legal framework for foreign plaintiffs to seek justice, ultimately reframing carbon offsetting as not merely a question of climate effectiveness, but a transnational justice issue necessitating legal accountability.

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