In 2004, the rock band Coldplay paid Future Forests, an offset provider since renamed CarbonNeutral, to plant 10,000 mango trees in India to reduce the carbon footprint from producing the band’s most recent album. In April 2006, The Sunday Telegraph discovered that most of the saplings that were planted had “withered in the arid soil” because there was not enough money for continued upkeep. That was one of the first goofs in the system; it gets worse.

In January, a nonprofit called Clean Air-Cool Earth released “A Consumer’s Guide to Carbon Offsets,” that categorizes the most reliable offset providers and provides a list of considerations for would-be buyers. Do offsets result from specific projects? Does the offset reduce emissions beyond what “business as usual” would accomplish (a concept known as additionality)? Would the project have happened without the offset money? Is the offset certified by a third party standard? Is the offset being sold to multiple buyers? These questions are important, but often go unasked by those looking to reduce their environmental footprint.

In March, BusinessWeek took a look at the “feel-good hype” behind offsets. The magazine scrutinized the portfolio of TerraPass, the company that, ostensibly, made this year’s Academy Awards presenters carbon neutral. But solid investigative reporting revealed that TerraPass has given a lot of its money to a methane-trapping project at a landfill in Arkansas that was in the works before the offset money came along. When approached by BusinessWeek, five of the six companies that sell offsets to TerraPass readily admitted that the well-intentioned funding was “just icing on the cake” for projects that would have happened anyway. The magazine also uncovered a dairy farmer in Washington who had received offset money to generate electricity from the methane in his cows’ manure. But by the time the funding reached him, and every middleman had taken a cut, the farmer collected only $2 for every $9 offset.

A week after these revelations, published a lengthy and probing criticism of both the compliance and voluntary emissions markets. Theoretically, wrote John Russell, the two markets should complement each other because the voluntary market funnels cash into smaller businesses that are overlooked by the CDM and ETS. But neither system works. The compliance scheme is “flooding the market with cheap carbon credits,” Russell wrote, and “a lack of standardized methodologies afflicts all aspects of the offset market.” To make matters worse, in the unregulated jungle of emissions trading, there are a host of scammers taking advantage of poor oversight.

The February issue of Forbes declared, “When hucksters talk green, they mean your wallet.” Author Daniel Fisher criticizes the swelling ranks of purportedly eco-friendly penny stock operators that are “capitalizing on the popular mania for sustainable energy.” Most of these companies, despite high market caps, show no sales, little equity, and even less environmental resolve. Many of the projects boast revolutionary, emissions-reducing technologies that border on the fantastical. Even Earth Biofuels, the company whose poster boy is the lovable country-singer-turned-environmental-advocate Willie Nelson, belongs to a holding company that has tangled with the Securities and Exchange Commission.

It sounds pretty bad. If we can’t count on Willie Nelson to shoot straight, what can we count on? The compliance and voluntary emissions markets are a mess, to be sure. But does that mean that Newt Gingrich was wrong, and that the open market will not solve Earth’s global warming problems? Well, no. The lucrative growth of “green” markets has, at the very least, sent a clear signal to politicians and lawyers that legislation, regulation, and standards on needed if low-emissions economies are to succeed. Perhaps policy makers need to put a few of John Kerry’s suggestions into the mix, and tighten national and international market protocols. As with all good debates, the solution lies somewhere in the middle, and the press and the public must not lose sight of the fact that emissions-trading schemes are incredibly novel frameworks. It is up to government to refine the system based on what it has learned from the markets; and it is up the press to a close watch as they on those markets as they continue to grow.

Curtis Brainard is the editor of The Observatory, CJR's online critique of science and environment reporting. Follow him on Twitter @cbrainard.