This morning, a piece from the Wall Street Journal caught my eye, on carbon offsets in Michigan. The offsets are sold for preserving trees that are already standing, in a deal between the state, which owns the land, and the local utility.

The state says the funds will largely be used to plant new trees, and that the money makes it more valuable to keep the trees in the ground rather than selling the most profitable varieties—which have been ever more in demand due to a turbo-charged market for lumber, as tracked by Fortune’s own data guru Lance Lambert. It’s part of a growing market for what’s called “voluntary offsets” which BP, for one, thinks will become a market it can trade like it currently does oil and gas.

Making the trees more valuable if they stay in the ground is, from a carbon and markets perspective, good. But it hints at a series of recurring, and high stakes, questions in the world of offsets, and therefore in the world of carbon accounting. Can you really measure avoided deforestation, and call it an offset for fossil fuels that are being burned right now? In daily terms: if taking this reusable water bottle with me to work saved me from buying, say, five bottles of water this week . . . do I get to drive my car ten extra miles, carbon free, and come out even?

Before you email me to tell me that I can’t realistically claim that the math behind the above scenario works out (based on your calculations of carbon emitted when driving, and emissions per bottle, and steel versus plastic, and whether the bottles would have been recycled…), that’s kind of my point, too. The vast confusion behind how to standardize carbon accounting leaves a million questions unanswered, with companies essentially filling in the gaps as they go. In one of the more bizarre and telling examples, Bloomberg recently tracked down a series of forest projects that traders at TotalEnergies found to offset a tanker of LNG.

In an example from my own life, I recently ate a carbon neutral (vegan) burger.

Efforts to standardize ESG—and offsetting, and what constitutes greenwashing—are coming left, right, and center, including measures that emerged this spring from the EU. But those measures, which have produced reams of complicated paperwork, have themselves bred confusion as companies try to figure out what to disclose, and why.

That’s not to say that market incentives to protect forests aren’t worthwhile. But many climate experts say that, while protecting carbon sinks is a crucial part of limiting temperature rise, it’s simply not a replacement. As the IPCC report last week reminded us, the very pressing task at hand here is for governments, and companies, to reduce absolute emissions, not to play endless games of carbon accounting cancel-out.

Other news below.

Katherine Dunn
katherine.dunn@fortune.com
@katherine_dunn

TOP NEWS

Afghanistan

Scenes of chaos were continuing around Kabul airport, while reports have grown that several people have been killed in anti-Taliban protests in other Afghan cities. Meanwhile, President Biden has said the deadline to leave the country at the end of this month may have to be extended, while the Pentagon said U.S. forces are unable to reach people outside the capital's airport. From Fortune, Nicole Goodkind and Nicholas Rapp put together this piece on the cost of 20 years in Afghanistan—in money, time, and lives. 

Delta vaccines

A large British study has found that vaccines are less effective for the Delta variant, fueling worries that initial vaccinations won't be enough to fend off future surges. Meanwhile, Israel—one of the most highly vaccinated countries in the world—is grappling with sharply rising infection rates. That isn't an argument against vaccination, experts warn, which are still highly effective, but show that booster shots are likely necessary, even as much of the world is struggling to get just the first jab. WSJ

Taper talk

The big discussion when it comes to the Fed is whether it will begin to dial back asset purchases this autumn. The minutes from the July meeting, released Wednesday, show the panel discussing just that, and appear to suggest it is edging towards announcing the tapering of the $120 billion a month buying spree designed to spur the U.S.' economy. Fortune

Netflix insiders

The SEC has charged five individuals, three of them former software engineers at the company, with insider trading, alleging that they used confidential subscription data to trade the company's shares ahead of quarterly earnings reports. Much of those discussions took place on encrypted messaging apps—drawing questions about how often the apps are being used to trade insider information. Fortune

AROUND THE WATER COOLER

Goldman deal 

Goldman Sachs' asset management unit has agreed to buy the Dutch insurer NN Group's investment management business for €1.6 billion, or nearly $1.9 billion, in the largest deal since David Solomon became CEO. The deal is also a bet on the industry consolidating, by his own admission—as costs go up and fees decline. “If you look at most of the leading players, the thing that most of them have is their businesses are global and at scale,” he said. FT

T-Mobile hack

The telecoms company said hackers had stolen the details of 50 million former, current, and potential customers in a "highly sophisticated" attack. The details include names and social security numbers, but not payment details, the company said. T-Mobile is only the latest telecomms company to suffer a major attack. FT

Drilling blocked

A federal judge has blocked a project by ConocoPhillips to drill for oil on Alaska's North Slope, in the federal National Petroleum Reserve. The project itself had been approved under the Trump administration, and then upheld by the Biden administration. But the judge ruled that the impact on climate change of the 30-year project had not been fully accounted for. WSJ

China tech bust 

Alibaba shares hit a record low on Thursday in Hong Kong, as the Chinese tech industry grapples with another wave of regulation in an increasingly broad crackdown from the government. This time, the drop came after the government said it was looking at expanding rights for drivers for online giants and increasing oversight of live streaming. The impact of the crackdowns wiped $1 trillion off the Chinese tech industry last month. Fortune

This edition of CEO Daily was edited by Katherine Dunn.