From the UK Telegraph:
Seven arrests in suspected £38m carbon credit fraud
Seven people have been arrested and 27 residence and office locations were raided by police over a suspected £38 million pounds (62.8 million dollars) fraud involving the trade of carbon credits to avoid paying the value-added tax (VAT) which is required in the UK.
excerpt:
By Rowena Mason
Published: 7:36PM BST 19 Aug 2009
Officers from HM Revenue & Customs searched both residential properties and offices in both Gravesend and London targeting an alleged network of organised crime.
Members are believed to have been trading large volumes of high-value carbon credits from overseas sources free of VAT.
Tax investigators believe these may then have been sold on to businesses in the UK charging VAT that is never paid to the authorities.
Read the complete article here
======================
Is anyone really surprised? a Duke University masters candidate Alan Abramson clearly identified the risk this spring, as have many others:
The [carbon offset] market requires validators and verifiers all over the world. The system is already short personnel with these skills. Then there is the question of who pays these people? Regulators need to keep in mind the failure of the credit rating agencies (Moody’s, S&P, etc.) in the recent credit crisis. Markets require trust. Respondents said the only reason certain investors purchased some MBS assets was the Triple-A rating.42 These same respondents say that a significant flaw in the system exists because the credit rating agencies are paid by the bond issuers. A disincentive exists for doing a thorough job. Currently, validators and verifiers are paid by project developers. If we are to learn from the failings of the financial markets, this is an aspect of the carbon offset markets ripe for misconduct.
See the PDF of his masters thesis here
As a maritime society, I reckon we are well placed to establish a cloud cover and water vapour trading scheme. If its true that the lag between c02 is 800 to 2000 years, according to past proxies, then the c02 increase today must be from the warming during the MWP. So the carbon trading scheme is a direct result of past warming.
Given that oceans regulate the climate by 98%, surely thats where they money should be. Then theres a solar trading scheme to consider….
please note that the scheme was NOT in the credits itself, although there’s probably plenty of fraud going on in the offset market as well. But in this case, for all we know, something might actually have been offset somewhere by someone. The fraud was charging customers VAT, not reporting it to HMRS and putting it in their own pockets.
Brilliant solution by the British, BTW. “Well, if you are going to cheat us out of VAT, we’ll just reduce the tax rate to zero. Try cheating us out of our revenue now, suckers!”
Some devious Brits should scheme the revenue service out of income tax. Maybe they’ll abolish income tax as well 🙂
Addendum. Yes, I’m convinced that this long time lag is due to long term oceanic outgassing from past climatic history. Lets create a tax on those emissions instead.
You colonials may call those involved Organised Crime, we back here in blighty proudly call them Politicians & Environmentalists!
Just off down to Staples to get some more ink for by HP printer so that I can print off a quintillion zillion of my own Carbon Credits. Good old “Disney” world! Perhaps they’re all snorting stuff from Afghanistan grown with that fertilizer we Brits send over there that ends up in IEDs that blow up our troops? I won’t go there, honest!
All hail the Beautiful Leader & his drive to STOP climate change.
End of sarcasm, tongue no longer in cheek.
UK Arrests in Carbon Credit Trading Scam – organized crime said to be involved
Imminent UK General Election then?
Carbon Cred salesmen in pyramid scam fraud bonanza.
I’m shocked. Really.
Carbon Credits are the biggest scam ever invented, and I still cannot see the rationale behind them.
Companies are given CCs free, as a measure of how badly you pollute. Thus the more you pollute now, the more money you can get (good start this, a nice incentive to increase or exaggerate your pollution). You then reduce pollution by installing new equipment, and you can now sell on your CCS to someone else, who can pollute on your behalf.
Since the main polluters are in China, India and Russia, all you have done is transfer money from the West to the East, while the total amount of pollution possible remains the same. How does this reduce pollution?
Check out the Indian CFC scam, that netted Indian companies a $billion or so, for factory upgrades that only cost a couple of hundred million.
http://www.carbontradewatch.org/index.php?option=com_content&task=view&id=294&Itemid=36
As a trading system, this is bound to end in tears as there are too few controls on the issuing and accounting of CCs, and we are dealing with the Third World here. There is every inventive to cheat the system by inventing more CCS, and this will be done to such an extent that the system will collapse under the weight of its own corruption.
.
>>>Mike D. (00:43:45) :
(The Nigerian Bank of Carbon Credits internet trading scam.)
It took me a while to see what you were driving at here, Mike, but it is actually very good. It sums up the situation nicely.
.
Whilst we’re at it, you know, living in Disney Land, here is this little gem to amuse.
http://news.bbc.co.uk/1/hi/sci/tech/8205864.stm
Yet again, how do they know that this has not always occurred for eons as it “very likely” (95% certainty a’la IPCC) has? They of course don’t dress it up like that as it doesn’t possess that “scarey story” factor! They’ve put the “scare” factor in place, so that they can get the dosh for the next expedition at Taxpayers’ expense! Tongue definitely not in cheek.
ared (00:49:07) :
Brilliant solution by the British, BTW. “Well, if you are going to cheat us out of VAT, we’ll just reduce the tax rate to zero. Try cheating us out of our revenue now, suckers!”
LMAO
Dan (00:38:21) :
This is VAT fraud – it’s not related to the environmental value of the carbon credits. It’s not helpful to connect this crime with the value of carbon offsetting.
Too true, as you buy your carbon offsets and the ppm of CO2 continue
to rise, it will be a completely separate crime.
As others have pointed out, this is VAT fraud, not Carbon Credit fraud. “Missing trader” fraud is a huge problem, due the arcanities of our intrastat EU VAT systems – see
http://en.wikipedia.org/wiki/Missing_trader_fraud
It was traditionally done with RAM and mobile phones, so it really doesn’t have much to do with the real value or otherwise of the commodity being traded; they are simply looking for something high-value and easy to transport.
New Labour are going to put a cap (sic) on this VAT fraud very quickly because they aren’t about to let another bunch of crooks muscle in on the biggest scam ever.
Training film for carbon credit salesmen:
How did you get a copy of my carbon offset certificate?
OT I know Leif does not like being told he is wrong (just like me BTW). I am surmising but maybe Solar Minimun has not been reached. Its looking very very dead (re sunspots only), so surmising that the solar graph will go down again! (not up). Solar minimum may not have been reached?
http://www.solarcycle24.com/
However, I ain’t a solar scientist and Leif would be much more knowledgeable re Solar than me..
Phil.
Dan
I sympathise with your clarification but the very fact that the ‘scheme’ exists at all means that it invites (at the least) dubious dealings.
That the Government (presumably under EU instruction) wanted to rake in some extra tax from it is pretty much what one would expect. Given that these are business to business trades meaning that the VAT is usually reclaimable anyway as it is passed up the chain, zero the VAT out is simply going to save admin costs. The VAT element is a minor part of the fraud and totally unauditable (for ‘product’) by any normal means.
In the end the entire additional costs incurred by the purchasers of the ‘credits’, plus any VAT that may or may not have been charged, plus a profit margin, will be passed on to the ‘consumers’ one way or another.
The only carbon savings to occur, should that be important, will relate to people being unable to heat (or cool) their homes or cook their food. Those running the trading businesses and heading up the companies will find extra profits and so extra bonuses.
I’m no socialist but all I see here is a transfer of purchasing power from the lower regions of the social pyramid to the upper regions with some syphoning off for wasteful government projects.
As others have written in the responses, this entire concept is so evidently open to corruption and misapplication that only the most loosely moral political leadership could even contemplate promoting it. That politicans in most of the developed world seem to support such schemes says somethinig about the state of 21st century politics in the ‘developed’ world.
I’m surprised that they have not appointed Bernie Madoff to run it. (Hmm, perhaps they have ……)
Damn, and I was just about to corner the Hot Air market. And yes, I pilfered the art, brilliant.
Jeff Alberts (22:04:11) :
Better than that…
This is a scam avoiding the tax on the tax on imaginary things! 😉
DaveE.
Given that the vast majority of c02 increase and exchange is natural… Well just think of all the extra revenue if that, too, were brought under carbon trading.
i propose an all round air tax for every individual. Of course, given the lucrative sums involved, it would not be in the interest of traders and revenue collectors to inhibit our consumption and emission of this benign gas.
– paraphrased from a Woody Allen movie
REPLY: Its SHAMWOW !
– Anthony
Phil. (00:04:13) :
Everyone here appears to have missed the point, the scandal is not related to the value or nature of the bonds but that the companies trading them failed to pay tax on them (VAT). That happens with all manner of commodities.
Dan (00:38:21) :
This is VAT fraud – it’s not related to the environmental value of the carbon credits. It’s not helpful to connect this crime with the value of carbon offsetting.
I guess my question would have to be what would be the value added by a carbon offset that would make it subject to a VAT?
Thanks “Mike D” and “Jack Simmons”, absolutely fantastic. This whole Carbon thing has become such a joke it’s unbelievable.
Please tell me the Goracle is listed in the arrest warrent.
The black comedy that some have posted on this is very entertaining, but let’s not forget that the reality of Cap&Tax and it’s relatives is to very seriously relieve you and I of our money and our freedoms. Van Jones, Holdren, Hansen, Obama, Gore, et al don’t think it’s one bit funny, and neither should we. This is serious business. Very serious.