Guest essay by Eric Worrall
A report by the Stockholm environment institute claims that a UN carbon credit scheme “significantly undermined” efforts to tackle global warming.
According to the BBC;
The vast majority of carbon credits generated by Russia and Ukraine did not represent cuts in emissions, according to a new study.
The authors say that offsets created under a UN scheme “significantly undermined” efforts to tackle climate change.
The credits may have increased emissions by 600 million tonnes.
In some projects, chemicals known to warm the climate were created and then destroyed to claim cash.
As a result of political horse trading at UN negotiations on climate change, countries like Russia and the Ukraine were allowed to create carbon credits from activities like curbing coal waste fires, or restricting gas emissions from petroleum production.
Read more: http://www.bbc.com/news/science-environment-34042115
Click here to read the Stockholm Environment Institute press release
This is not the first time carbon credit suppliers have been accused of gaming the system. The BBC article cites a story from 2010, in which the EU strongly criticised Chinese carbon credit suppliers.
Chinese chemical companies’ use of offsets has a ‘total lack of environmental integrity’, says Connie Hedegaard
Damian Carrington in Brussels
The European commission is planning to clamp down on a £1.6bn carbon trading scam. The use of carbon permits from industrial gas projects in China could be banned because of their “total lack of environmental integrity”, the climate change commissioner, Connie Hedegaard, has told the Guardian.
Read more: http://www.theguardian.com/environment/2010/oct/26/eu-ban-carbon-permits
The BBC article reports that Russia strongly rejects claims that many Eastern projects broke the rules;
Michael Yulkin, from Russia’s Environmental Investment Centre rejected the idea that many of these Eastern projects broke the rules.
“That’s just not true,” he told BBC News.
“All the projects have been validated and the additionality has been proved – it was all following the rules and if the rules allowed them to be in, so you have them in.”
Why are carbon markets so susceptible to fraud and sharp trading? I have a theory. In a normal market, fraud damages the financial interests of at least some of the participants, so there is a strong incentive to report fraud to the authorities, to punish fraudsters, and to recover stolen assets.
But in a carbon market, most market participants actually benefit from fraud. The sellers of carbon credits benefit when they sell fraudulent credits, because they are making money for nothing. The buyers of carbon credits benefit from a market flooded with fraudulent carbon credits, because the oversupply caused by fraudulent credits helps to keep prices down. Corrupt officials benefit financially, when they receive bribes to ignore the fraud. The only people who are disadvantaged by carbon fraud, are investors who tried to follow the rules, to produce “genuine” carbon credits, and politicians and activists who naively expected the carbon market to deliver emissions reductions.
Or perhaps all commodity markets are fiddled and the Carbon Market only attracts the second rate players.
So they are easier to catch.
Well what a surprise, corrupt states telling porkies.
The only people who are disadvantaged by carbon fraud, are..and politicians and activists who naively expected the carbon market to deliver emissions reductions….
Politicians and activists AREN’T disadvantaged by the failure to deliver reductions. So long as they can claim the CO2 figure is high, they get to keep their jobs….
Excellent article EW ! Thank you.
Shocked, truly shocked!
Trust the Russians to game the system, stitch people up like kippers and then outright deny it when they get fingered.
I like the Nigerian CCN system. None of this is any shonkier than other carbon offset schemes – just funnier.
“Activate your account by purchasing your ‘Carbon Offset Green-Pack’ (N60, 000) – A demonstration you are a Carbon Neutral Citizen. You will start to make money and grow in influence as this qualifies you as a full member of CCN. You will not need to pay any money again and no monthly membership fee.”
The US $300 will also buy you some CFLs, solar lanterns and cans of Bio Gel stove fuel. It’s all included, and you can resell the items – though maybe not for $300. It seems the big bucks come from joining up other Nigerians to CCN. It’s probably like Amway and Avon, where new recruits run around pestering relatives and friends to buy stuff they would otherwise not buy. When the recruit runs out of relatives and friends…time for new recruit. No shopfront needed.
Hilariously, a lot of African carbon offsets originate from building supercritical coal plants (or promising to build ’em – I dunno!) and those carbon offsets are snapped up
cheap by European coal power producers. (Gotta be cheap, because Brussels and Strasbourg need Germany to keep buying the drinks, so they keep that free market carbon price in the toilet.)
So funny. Expensive, crippling even. But funny.
The polls in Australia are telling us that the looney left have a 10 point lead and their policy is more of this rubbish. We have handed the keys of the asylum to the inmates. We are living in the age of unprecedented stupid and its worse than we thought.
Do we the punters also gain? If our power generators can supply us without having to pay a high price for carbon credits, then part of that gain could trickle down to the end users. Probably wishful thinking.
So, if it is less than the market price of ‘carbon credits’ * to manufacture and then destroy some GHG then this is better than any pyramid scheme hitherto known to man.
Is Bernie Madoff out of prison already?
* Surely the most oxymoronic concept ever thought up. Its almost Shakespearean in in perfectly distilled use of language.
I always understood that a ‘market’ consisted of a negotiation between, on one hand, a willing buyer for a product or service for which they have a need, and are prepared to pay a price commensurate with their perceived value for such a product, and on the other hand, a willing vendor of a product or service that meets the purchaser’s needs, at a sale price that gives them an acceptable profit.
Additionally, to constitute a ‘market’, there needs to be competition between a number of buyers to procure required products, and also competition between a number of vendors to win sales with product features and/or keen pricing.
In what ways does a contrived emissions trading scheme constitute a “market”?
It’s not only the fraud and the rip-off is closer to home.
https://rclutz.wordpress.com/2015/04/15/quebec-joins-california-carbon-market/
This is not a new discovery by this member of the AGW body-politik,
Check this out from 2010 – “The European Emissions Trading Scheme”
http://scienceandpublicpolicy.org/originals/emissions_trading_scheme.html
For more on the Stockholm Environment Institute, check out Bishop Hill comments: http://bishophill.squarespace.com/blog/2015/8/25/another-view-that-must-not-be-heard.html
The inner workings of such a market are here:
https://rclutz.wordpress.com/2015/04/15/quebec-joins-california-carbon-market/
International carbon trading scheme a massive scam? Least surprising news of the year so far.
The idea that CO2 levels have a detrimental effect on the World’s Climate is a fraud, so the fact that the Carbon (Dioxide) Credit Market is run as a fraud, and attracts frauds, should come as no surprise, to anyone. Both sides of this idiotic battle are nicely balanced.
Not true. The companies who are forced to buy carbon credits will pass the cost on to their customers, who will find the prince of nearly everything goes up a little bit. It’s an extremely broad-based, almost invisible tax. Other companies who make changes to avoid purchasing carbon credits are by definition incurring some new or additional cost(s) for the sole reason of avoiding a greater cost purchasing carbon credits. Their customers will likewise pay a little bit more to cover those additional costs.
At some margin, the mandated additional costs will move a company from profitable to not profitable, putting both the owners and employees at risk.
Lots of people are impacted by mandated schemes to reduce CO2 emissions, which is what enables carbon credit fraud in the first place.
Fraud is endemic to the carbon trading market, what’s left of it, and that’s why periodically the EU shuts it down to pluck out the most blatant gangsters, fraudsters etc etc. If you should happen to have some insider knowledge of a big one, I can offer you a very profitable escape exit.
https://thepointman.wordpress.com/2012/10/05/im-looking-for-a-snitch-who-wants-to-get-rich/
Pointman
The climate alarmist fraternity are easily duped and this is just another example of it.
Will this comment also go automatically into a moderation loop as well?
Pointman
My apologies, Mod. I was just falsifying a theory. Popper strikes.
Pointman
Carbon Offset market…?
It’s happened before….
http://www.thebubblebubble.com/tulip-mania/
http://www.thebubblebubble.com/south-sea-bubble/
Carbon offsets are almost as good as this business proposal from around 1720 when an English
entrepreneur allegedly founded a company…. “For carrying on an undertaking of great advantage; but nobody to know what it is”
Try slapping Putin with fines over this one the way the EU goes after corporate participants in price fixing or monopolistic behavior.
Man, with everyone using the F-word in their posts, the moderators must be working overtime on this thread. I’d just like to give a shout-out to the guys working to keep our favorite message board clean.
A scheme based on lies undercuts a far bigger lie. Oh, the ironing.