The current Holocene Extinction marks the fastest rate of species loss in human history. In the absence of effective public policies, market-based approaches and carbon offset projects in particular may generate biodiversity “co-benefits”. This study provides the first comprehensive empirical investigation of how voluntary carbon offset projects – which often promote their biodiversity co-benefits to investors – impact habitat. We compile the largest extant dataset of voluntary carbon offset projects with finely-resolved data on local ecosystems from satellite-derived measures of habitat. Results indicate carbon offset projects are associated with a 3.7% increase in habitat disturbance, as measured by the Human Influence Index (HII). We examine heterogeneity by ecosystem condition, certifications, stated co-benefits, protected area overlap, registry, rating status, and timing relative to the influential 2014 IPBES report, but find no evidence of improved habitats. Nor do alternative habitat measures, the Bioclimate Ecosystem Resilience Index and the Biodiversity Habitat Index, show improvement following offset projects. Analyzing supplementary land-use data, we show that that carbon projects prompt conversion of biodiverse habitats into pasture or simplified landscapes, and thereby ecological trade-offs.
