Here’s more clear evidence that the Carbon Trading industry is doomed. Not only has carbon trading been halted in the USA due to lack of a market and ludicrously low prices of a nickel per ton, now it has been learned that in Denmark, more than 7 billion dollars has been lost due to the faulty system. Next step, Nigerian email system.
From Lawrence Solomon at the Financial Post:
Scam artists from around the world, capitalizing on lax regulations at the Danish emissions trading registry, have made off with an estimated $7-billion over the last two years, according to Europol.
Denmark’s Office of the Auditor General is now investigating the fraud, which occurred after the Danish registry dropped requirements that carbon traders be documented. While allowing a free-for-all served the carbon market on the short term, by appearing to inflate the interest in carbon as a commodity, it ultimately backfired when much of the trading proved to be phony.
…
This story, greatly underreported, came to me via a Norwegian reader, Geir Hasnes, who has translated one of the few press reports to have appeared. His translation appears here.
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WUWT is happy to help get the word out, as are many of our readers with blogs.
Mac the Knife says:
December 7, 2010 at 12:59 pm
David L says:
December 7, 2010 at 8:15 am
The going rate for a chord is more like $150.
David,
Are you referring to a ‘full cord’ of cut/split firewood… or a ‘face cord’? A full cord of firewood (US) measures 4 feet X 4 feet X 8 feet, stacked tight, and is typically comprised of 3 ‘face cords’. A ‘face cord’ of tight stacked firewood measures 16 inches (cut length) X 4 feet X 8 feet.”
Hmmmm… I guess I’m talking about a face chord. I’m like you though. Each summer my neighbor and I stock up our wood sheds until we think we have enough. Just hiking around our woods cutting up trees that came down during storms. We are so environmentally friendly we don’t even cut trees down: we let nature do it! Why do we burn free wood? To save the planet? Nah, it’s cause we’re cheap!
I’m not sure to understand fully what Lawrence Salomon is really discussing : it looks like the VAT fraud highlighted during the second half of 2009, which affected France, Belgium, the UK, Danmark, etc. Is this just a relaunch due to some initiative of the Danish audit body ?
David L.
Sounds like we are twin brothers by different mothers, David!
I have scrounged quite a bit of firewood from downed trees at construction sites in the past… but that has slowed in the last 2 years! I had to buy (ugh!) a semi load of green cut logs and log ends (rejects from a logging operation) this last spring, as my ‘biofuel’ reserves were consumed last winter. That load of green wood (mostly fir) gave me a lot of needed exercise and netted 4 full cords of ‘sequestered carbon’, stacked dry and tight this fall, for about $400. I cut another full cord and a half from fir trees at a construction site, so I’m good for the winter and then some! And I’m stronger and healthier, as a direct result.
While I do have an efficient natural gas furnace in the house, I really prefer the flickering fire light and soul warming heat from my high efficiency wood stove. The ashes go on the garden, lawn, and flower beds, to replenish nutrients and minerals needed in the spring. I’m feeling so environmentally smug, I think I’ll go liberate some more sequestered carbon, right now! Put another log on the fire….
PS: Don’t be afraid to wear the mantle of ‘conservation’. Conserving is what cheap guys like us do best! No, we aren’t ‘green’. Puke is green. We just get the most out of what we have, we are healthier for it… and that is what real ‘conservation’ is all about!
‘3×2 says:
December 7, 2010 at 9:21 am
The Danish Minister of Climate and Energy who oversaw the illusory growth in the carbon market, Connie Hedegaard, has since been promoted to the post of EU Climate Commissioner.
Is there any other area where you can lose 7 billion and be promoted to the 100 billion league? Children in a candy store.’
I think you answered our own question. 7 billion to ? and got promoted. the biggest scamers are on the inside. Think Madoff.
‘Carsten Arnholm, Norway says:
December 7, 2010 at 12:54 pm
The problem appears when the government makes it mandatory to be robbed like this every time you need an airline ticket.’
Unless you have a private jet.
re: John from CA says:
December 7, 2010 at 8:02 am
As per John, don’t underestimate the ability of climate zealotry! Cancun could still result in one of the most ludicrous deals ever penned, be afraid be very afraid (oooops sorry for the alarmism).
Being fairly ignorant of how the carbon trading market actually works, I’d like to know how this money was stolen, and where it came from in the first place. Can anyone here explain it in straightforward terms?
I wonder is someone could ask Josh to do a cartoon of Australian Prime Minister Julia Gillard in a jockey’s outfit astride an obviously dead horse (called carbon tax), flogging the hell out of it. She would be wearing the same blinkers as the horse
UNFCCC exec secý, C.Figueres, is among friends at Cancun.
http://figueresonline.com/CFO_English_Long.pdf –
¨2009-2010 Senior Advisor, C-Quest Capital, carbon finance company
focusing on programmatic CDM investments
2008-2010 Vice Chair of Rating Committee, Carbon Rating Agency, first
entity to apply credit rating expertise to carbon assets¨ {snip}
¨1981 M. Sc. in Social Anthropology, London School of Economics
1979 B.A. in Sociology and Anthropology, Swarthmore College¨
&
http://en.wikipedia.org/wiki/Christiana_Figueres#Private_sector
¨She has been trained and authorized by Al Gore to deliver his presentation An Inconvenient Truth.¨
On her way to Cancun, she stopped by her home in Costa Rica to deliver good news for her neighbors re opportunities at COP16:
¨¡Eso es lo fantástico! ¡Es una oportunidad única para recobrar la atención del mundo!¨ Central America´s oldest democracy will capture everyones attention, as mandatory ´contributions´ from developed countries pay for developing states´infrastructure and other needs.
Mike says:
December 7, 2010 at 9:51 am
Mike, may I suggest a book for you;
http://www.amazon.com/Capitalist-Manifesto-Historic-Philosophic-Laissez-Faire/dp/0761832211/ref=sr_1_1?ie=UTF8&qid=1291790339&sr=8-1
Maybe you will see why laws and regulations are mandatory in liberalism / capitalism. You cannot trade without it.
To JJB MKI.
The scam is a so-called VAT carousel, where you have at least three fictional companies in at least two EU countries. You are greatly helped if one of the companies is a fictional bank, created only for the quick trading of the permits. Between countries, there is no VAT on the transaction, and within a country there is. The thing is that one company gets its (fictionally paid) VAT refunded from the state, while the company that should pay the (fictionally received) VAT disappears. The permits are traded back to the first company which sells it again and again and again and again and again.
This began to be looked into more than a year ago, but it tas taken more than a year to find out how much has actually been stolen and by (fictional) whom. After the purging of the registry, new companies have appeared this year and the VAT carousel has continued. So the scam is by no means ended.
DaveF says: December 7, 2010 at 7:55 am
Scam artists have made off with $7 billion, eh? Does anybody know of a Scam Art college I could enrol at?
The John F. Kennedy School of Government at Harvard University.
Given the corruption and greed in the EU Commission, I would not be at all surprised if the scam was organised by its members.
“In general, firewood is priced based roughly on the BTU content of the wood (hardwoods have higher BTU content than soft woods)… ”
Per kg, softwood has more heat that hardwood. Per cord, (volume) harwood has more heat. Most people find softwoods not as pleasant to burn because it tends to turn into gas too quickly.
The difference between a face cord and a cord was interesting. It may be of interest to wood buyers and burners know that 5 inch diameter wood packs more densely (more mass per cord) than other diameters. [McGraw-Hill Engineering Handbook, First Ed., 1916]
Mike McMillan 12:58
Nice answer, Mike. I might give it a go! Best wishes, Dave.
I knew it…Kingsford has been ripping us off on coal for years.
I say “class-action law suit.
I know this is only peanuts compoared to the Danish scam, but it appears almost $20 million of carbon credits were looted from a Romanian cement manufacturer, Holcim:
http://www.bloomberg.com/news/2010-12-01/romania-s-holcim-says-eu-carbon-permits-stolen-from-its-account.html
This just points to the ease of how this system of trading can be corrupted.
FWIW, in options trading a 5 Cent option is the typical price for a completely worthless option.
Why is a worthless option not priced at zero? There are some options strategies that require an offsetting ‘leg’ and you need to be able to buy that leg to fill the order. So, for example, buying a Call and selling a Put creates a ‘synthetic long’ position. The result is the same as OWNING the stock, but at much lower total cash outlay. If you could not fill one side of that position, you can’t get a ‘synthetic long’ order placed. So brokers will offer “worthless” options at a nickel each just to let the ‘deal volume’ happen… and pocket a free nickel…
So as soon as I see that nickel price, it shouts at me “worthless option”…
But people often make markets in worthless things…
That it finally collapsed says there were not enough ‘deals’ to support any volume. Once the volume drops to nothing, the market shuts. Regardless of the price of the underlaying…
So not only was the Carbon worthless, but the deal volume was approaching nothing too. Everyone was packing up and going home.
@Geir
Many thanks for your helpful reply. I was aware of the VAT carousel scam but had no idea it had extended to Carbon trading. That the MSM are largely unwilling to report this fraud to a wider public, either through laziness or because it undermines a predetermined ‘narrative’ is depressing. This is especially the case at a time when cuts are being made to vital public services across Europe and people living on the poverty line are facing punishing hikes in energy bills. I’d find it very easy to believe, given the ease with which this fraud was conducted, that those who made the rules might stand to personally profit from it, though I guess it’s unlikely we’ll ever find out.
Mac the Knife says:
December 7, 2010 at 4:10 pm
“PS: Don’t be afraid to wear the mantle of ‘conservation’. Conserving is what cheap guys like us do best! No, we aren’t ‘green’. Puke is green. We just get the most out of what we have, we are healthier for it… and that is what real ‘conservation’ is all about!”
Amen to that! I wonder if Al Gore knows how to chop wood and maintain a wood fire all winter?