Recent years have seen a marked increase in carbon emissions despite pledges made by the international community at the Paris Accord in 2015 to reduce fossil fuel production and consumption. Rebound effects could contribute to this phenomenon as, in which attempts to curb carbon emissions might have inadvertently led to an upswing in fossil fuel usage. The present study hypothesizes that rebound effects are driven by a misapplication of compensatory balancing heuristics, with the unintended outcome of producing inaccurate estimates of the environmental impact of “green” or environmentally friendly labelled products or behaviors. The present study therefore aims to investigate the relationship between participants’ degree of compensatory thinking (e.g., “Recycling compensates for driving a car”) and their susceptibility to the Negative Footprint Illusion, a widely replicated phenomenon demonstrating that the presence of “green” products biases carbon footprint estimations. One hundred and twelve participants were asked to complete a 15-item Compensatory Green Beliefs scale and to estimate the total carbon footprint of a set of 15 conventional houses, followed by a set that included 15 “green” houses in addition to 15 conventional houses. Results indicated that participants, on average, believed that the "green" houses were carbon neutral, and that susceptibility to the Negative Footprint Illusion was predicted by performance on the Compensatory Green Beliefs scale. This is the first study confirming that individual differences in cognitive processes (i.e., Compensatory Green Beliefs) are indeed related to inaccurate estimates of “green” products, providing a foundation for further investigation of the influence of “green” and compensatory beliefs on carbon footprint estimates.