Carbon trading is a naturally-occurring scam

UPDATE: Carbon market collapsing (see text 2)

all the interest in saving the environment had to be
mangled into carbon trading credits.
"It allows the market to factor in the environment" said
some bloated rectum in a suit.

When the story below broke, there was no public
surprise, because everybody knew that CTing
was designed as a scam.

check it: 2 texts
 1
Guardian

Three Britons charged over €3m carbon-trading 'carousel fraud'

• Belgium alleges VAT scam over carbon emissions permits
• Europol fears fraud will be used in energy trading markets

Phillip Inman
Monday 11 January 2010 17.20 GMT [sorry, I've been busy]

Australia carbon emission : factory chimney at an industrial park in Sydney
Pollution permits were launched in the European Union in 2005 in an effort to cut carbon emissions. Photograph: Tim Wimborne/Reuters

Belgian prosecutors highlighted the massive losses faced by EU governments from VAT fraud today after they charged three Britons and a Dutchman with money-laundering following an investigation into a multimillion-pound scam involving carbon emissions permits.

The three Britons, who were arrested last month in Belgium, were accused of failing to pay VAT worth €3m (£2.7m) on a series of carbon credit transactions.

European authorities believe the EU has lost at least €5bn to carbon-trading VAT fraud in the last 18 months. Europol, the EU's law-­enforcement operation, fears the fraud will be used in other areas, especially gas and electricity trading markets, after criminals found VAT fraud was one of the most lucrative financial frauds.

Pollution permits for businesses were launched in the European Union in 2005 in an effort to cut carbon emissions. But the lack of harmonised tax regimes across the EU has prevented the creation of an orderly market that eliminated fraud.

The fraud occurs when carbon credits are bought and imported tax-free from other EU countries, then sold to domestic buyers, charging them VAT. The UK allows credits to be sold without adding VAT, while Belgians must pay VAT when they buy credits. Once the transaction, or series of transactions, are complete, the sellers disappear without paying the tax.

The three Britons allegedly set up a firm in Tournai, in west Belgium, which bought the credits in Britain and sold them on to banks via an intermediary, pocketing the 21% VAT charged in Belgium.

The three British suspects deny the charges. Last August, the British tax office arrested seven people in London in a suspected £38m carbon market VAT fraud.

Several other EU states have raised concerns about the potential for fraud in the market. A European commission working group approved a proposal in December to apply a "reverse charge" mechanism to carbon trading to stop VAT fraud.

The move came too late to stop the an estimated £5bn believed fraud, which critics argue has largely to have been siphoned off successfully by criminal gangs. In December, French authorities arrested four people suspected of a €156m carbon carousel fraud on France's BlueNext exchange. Britain lost about £10bn from VAT fraud in 2006 and 2007.

2  Bloomberg

Europe's Carbon Emissions Market Is Crashing
By Alex Morales and Alessandro Vitelli on March 28, 2013
Carbon markets were supposed to help the world fight climate change by making fossil fuels more expensive, thereby curbing the burning of coal, oil, and natural gas, which release carbon dioxide into the atmosphere. This year, the market is pricing a lifetime of pollution at less than the cost of a tank of gasoline. Using one type of United Nations carbon credit, in January it was possible to offset 581 tons of emissions, about as much as the average European generates in 80 years, for €23.24 ($30). The price has climbed to $82. “The fact that prices are so cheap says the market is broken,” says Edward Hanrahan, director of ClimateCare, in Oxford, England, which invests in carbon-reducing projects. “It’s not spurring large emitters to make investments” in reducing emissions.

Carbon markets were set up to help developed countries meet the emissions targets they agreed to under the 1997 Kyoto Protocol. The idea is to issue factory owners and utilities permits for a certain amount of pollution, with a declining number of permits issued each subsequent year. Companies that don’t use all their allowances can sell them to companies that exceed their limits. There are also markets like the UN’s Joint Implementation program, where companies can buy carbon “credits or “offsets” to help meet their emissions quotas. The money they spend on credits is invested in UN-approved emissions-cutting projects.

The European Union Emissions Trading System is by far the biggest carbon market, accounting for 89 percent of the $61 billion in trading worldwide in 2012, according to data compiled by Bloomberg. Users range from German power company RWE (RWE) to Danish brewer Carlsberg (CARLA). RWE emitted 140 million tons of CO2 in 2011 and had a cap of 89 million, so it had to buy 51 million tons of either carbon permits from other EU companies or offsets on the UN market.

When the EU started its Emissions Trading System eight years ago, policymakers expected the price of carbon would have to hit €25 to €30 a ton or more to coax industry to shift to renewable energy. David King, the science adviser to Britain’s then-Prime Minister Tony Blair, said companies wouldn’t change for less than €100 a ton. After trading on the EU ETS began, prices reached a high of €31 per ton. But the economic slump beginning in 2008 slowed industrial activity, depressing prices. Permits for delivery in December 2013 (and valid for seven years) touched a low of €2.81 on Jan. 24. They closed at €4.15 on March 22.

Lawmakers in the European Parliament are due to vote April 16 on a European Commission proposal that would delay issuance of new permits through 2015, temporarily restricting supplies in hopes of lifting prices. Prospects for passage are uncertain. Poland objects out of concern the plan would boost energy prices. Cyprus says it can’t afford to lose revenue from auctions. Greece is also opposed. Germany hasn’t decided how to vote. Without a big adjustment to the structure of the European market, buyers fear it “might just fall away,” says Abyd Karmali, head of carbon for Bank of America (BAC) in London. “You might end up with a patchwork quilt of measures across the 27 member states, where each state decides to put in place its own policies.”

In the U.S., proposals for a national carbon-trading market supported by President Obama stalled in the Senate in 2009. Japan’s government shelved a trading plan in 2010. At the same time, Japan, Canada, and Russia have declined to take part in the second round of quotas called for in the Kyoto agreement, which came into effect on Jan. 1, so companies there no longer require any permits or offsets. With the EU ETS foundering, support is growing for alternative approaches to curbing emissions, such as a direct tax on carbon. Even some oil company executives have endorsed the idea. “A carbon tax is much more straightforward,” Rex Tillerson, chairman of ExxonMobil (XOM), said in an interview with Charlie Rose on March 7. Dieter Helm, a professor of energy policy at Oxford University, agrees that taxing carbon would be more effective. “We want a carbon price to reflect where you want to go,” he says, “and not just current circumstances.”

The bottom line: With the price of carbon below €5 a ton in the EU’s Emission Trading System, companies have little incentive to cut emissions.