I am under the impression that the problem is excess consumption. Without reducing consumption, i.e. changing what people do, how is it possible to “offset” negative externalities?

Carbon capture is a possible solution.

The issue with offsetting is that it's not actually enough. The idea is basically to help less developed economies grow in a more sustainable way.

But we could delete the entire developing world and still be emitting too much, so capture and/or reduction are necessary, yes.