Carbon trading no cure-all: Detractors cite lack of enforcement, fraud potential

Of all the systems pitched as environmental panaceas, few seem seem to be as mired in controversy and confusion as carbon trading.
At its core, carbon trading is an attempt to use market economics to reduce the world's output of carbon dioxide, one of the leading greenhouse gases that has been linked in scientific research to climate change.
Carbon trading, also known as carbon offsetting or a cap-and-trade system, allows companies and governments that produce a lot of carbon dioxide to mitigate the noxious impact of their activities by paying other companies and governments to reduce theirs by a corresponding amount.
It sounds great in theory, but detractors say it's riddled with inconsistencies in practice.
"My main issue is the lack of accountability," University of Guelph environmental economics professor Ross McKitrick says. "The problem with the whole offset system is that it's very hard to maintain."
...McKitrick related the tale of a British automaker that recently shut its domestic plant and moved production to China. In one fell swoop, the automaker got the benefit of a lower-cost production centre in China and valuable credits for reducing its carbon footprint in Europe.
In 2007, Alberta became home to North America's first rudimentary carbon trading market when that province set up the Alberta Offset System.
Much like the European model, the Alberta Offset System has no hectic, gleaming trading floor on which to buy and sell credits. Indeed, the only people who know about the system are polluters, firms that have reduced their carbon footprint and received credits for doing so, and brokers who act as intermediaries between the two parties.
After the province assesses how much carbon a polluting company is allowed to emit, the company can either pay $15 for every tonne of excess carbon it produces to a government-run green technology fund, or purchase credits from companies who are under their target.
When the Alberta system was launched, the going rate for carbon credits was $6 to $8 a tonne. It's up to about $13 now.
Some of the clear winners in the system are farmers, many of whom have reaped six-figure windfalls for using Earth-positive farming techniques to help capture more carbon. But beyond a token transfer of funds from polluters to non-polluters, there's some doubt as to what the program has accomplished — the province is emitting more greenhouses gases today than at any point in its history.

Climategate: Alarmism Is Underpinned by Fraud (PJM Exclusive)

( YouTube video from Ian Plimer was included in the references/articles from science writer Dr. John v. Kampen - among the first posts made here on AWG and related topics Dec 2009 )

Files from the UK Climatic Research Unit were hacked. They show that data was massaged, numbers were fudged, diagrams were biased, there was destruction of data after freedom of information requests, and there was refusal to submit taxpayer-funded data for independent examination

Carbon Traders Arrested for Tax Fraud

British customs officials arrested seven people near London on Wednesday who are suspected of dodging taxes that should have been paid for selling large amounts of carbon dioxide permits — the main currency in the European Union’s Emissions Trading System.

Many polluting businesses in Europe are required to buy the permits, which are part of a cap-and-trade system similar to the one under consideration in the United States, and which currently trade for about 15 euros ($21) for each ton of CO2 emitted.
The market, created in 2005, has been criticized for volatility and for rewarding some of the largest utilities with billions of euros in windfall profits .

Cap and Trade: Organized Crime’s Best Friend

The Financial Times adds:

Anand Doobay, a partner at Peters & Peters, a City-based law firm specialising in financial crime, said the ethereal nature of the fast-expanding multi-billion dollar international market in carbon credits had made them an attractive target for graft: “There is an increasing amount of fraud connected with them as a commodity. It’s trading with something that’s intangible, and that isn’t regulated in the way some other commodities are.”

Since carbon credits are a completely intangible unlike every other real commodity on the planet, cap and trade has afforded organized crime a new avenue to defraud taxpayers and other unsuspecting victims. Now where have we heard people predict exactly that would happen?
Carbon Trading Is an Invitation to Fraud

Why Should the U.S. Embrace Failure?
Lies Environmentalists Tell
The Fraud at the Core of Cap and Trade
Cap and Trade’s Inevitable Central Planning Conclusion
The Fraud behind Carbon Reduction Targets

Will Media Report Global Warming 'Carbon Credit' Fraud?

Read more: http://newsbusters.org/node/12314#ixzz0z40jf2cT

Financial Times content :

Widespread instances of people and organisations buying worthless credits that do not yield any reductions in carbon emissions.
■ Industrial companies profiting from doing very little – or from gaining carbon credits on the basis of efficiency gains from which they have already benefited substantially.
■ Brokers providing services of questionable or no value.
■ A shortage of verification, making it difficult for buyers to assess the true value of carbon credits.
■ Companies and individuals being charged over the odds for the private purchase of European Union carbon permits that have plummeted in value because they do not result in emissions cuts