Cap-and-Trade Model Loses Billions to Fraud

[FreakinDJ]

Cap-and-Trade Model Loses Billions to Fraud

As negotiators grapple in Copenhagen over a global scheme to curtail carbon emissions, Europe's own iteration was revealed as an easy mark for organized crime. The development could lend fresh ammunition to congressional critics of the Obama administration's plans to limit carbon emissions through a cap-and-trade system.

Europol, the European Union's joint criminal intelligence agency, announced that in the last 18 months, criminals have gamed the EU's Emissions Trading System for a cool $7.4 billion in purloined tax revenues.

The EU's ETS, the world's largest existing carbon emissions trading scheme founded in 2005, serves as a model, for better or worse, for global trading schemes being discussed now in Copenhagen. After getting off to a slow start -- at first, European governments set the carbon caps so high that many power companies were profiting from the credits without having to cut their emissions -- the trade started to balloon suspiciously late last year. By the time volume peaked last May and early June, Europol investigators say, up to 90 percent of the trade in some European countries was totally bogus.

So how does a would-be Bernie Madoff make money trading intangibles like carbon credits? The scam was relatively simple: Fraudulent traders bought carbon credits tax-free in one European country, then sold them in another at a markup by including value-added tax, which varies from 15 to 25 percent among EU member states.

http://www.sphere.com/world/article/europes-cap-and-trade-model-loses-billions-to-fraud/19274092

This shit is worse then Bush Administration's Clean air Policy

[rollingrock]

1. Cap and trade is a Wall Street scam

Goldman Sachs and AIG are absolutely salivating over the opportunity to trade these dubious carbon credits on the stock market, which wont do anything to help the environment but will make some investors very rich. cap and trade is the next big stock market bubble, the next great ponzi scheme.

[David__77]

3. Why does it do nothing for the environment?

I have always, as an economist, understood cap and trade to be a rather neo-liberal environmental policy; but I don't see that it would do nothing if it can be enforced.

[rollingrock]

5. It can't be enforced

that's one of the big problems with it. it would take a vast new army of regulators and inspectors to do the job, and even then it would be difficult to enforce. how is it possible to monitor each and every company to make sure they are polluting under their carbon credit limits? there are endless ways for companies to hide their true pollution and get around the rules. enforcement is simply not feasible. not in the first world, and especially not in the third world where the technology, or the pollution monitoring equipment, doesn't exist and corruption is rampant...that's just one of many problems with this scheme.

[David__77]

7. So what is a good alternative?

What do you think? I do recall that I thought the scheme sounded a bit "utopian" to me when discussed in an academic forum.

[dysfunctional press]

9. learn to adapt to the new climate.

that's the only option our species is going to be left with, in the not too distant future.

[David__77]

8. So what is a good alternative?

What do you think? I do recall that I thought the scheme sounded a bit "utopian" to me when discussed in an academic forum.

[rollingrock]

10. Cantwell has an interesting idea

called cap and dividend.


this sounds like an improvement over cap and trade, but I don't think it solves the problem of enforcement. even when companies are caught cheating, they'll just pay some token fine and continue operating business as usual.
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Cap and Dividend

Senator Maria Cantwell (D-WA) introduced a bill today that is a much better approach to reducing climate change than the cap and trade bill circulating in the Senate. Her bill, which she co-sponsored with Senator Susan Collins (R-ME), uses cap and dividend to reduce climate emissions and avoids the pitfalls and boom-and-bust cycles inherent in carbon trading. (Peter Barnes proposed this idea in YES! Magazine in 2001).

Why is this a better idea?

First, polluters would pay for the right to pollute; they would buy carbon emissions permits at an auction, instead of getting the majority of them for free. This sends the right market signal—emit carbon, and you'll have to pay.

Carbon permits would be required at the point where fossil fuel energy enters the economy. The number of greenhouse gas emissions allowances is reduced regularly by amounts that businesses can plan for. There are no offsets—these would be real reductions in climate changing emissions.

Second, American families strained by the poor economy would benefit. Each person would get an equal share of the proceeds from the auction. It works like the oil trust funds in Alaska, where each resident gets about $1,300 per year for their share of the state's oil royalties. As long as our economy remains dependent on fossil fuels, prices for energy and energy-intensive products will rise. But the rebate will offset those price increases—Cantwell says it will mean most families are in about the same place financially. Those who buy carbon-free energy, drive energy efficient cars, or buy products produced locally with little fossil fuels will come out ahead, though, while those who drive gas guzzlers will pay more through the higher price of fuel. So it sends the right signal to consumers, too....

www.yesmagazine.org/blogs/sarah-van-gelder/cap-dividend-clearly-a-better-idea

[bananas]

2. That's for TAX FRAUD

A carbon tax won't solve that problem.

[JohnyCanuck]

4. Well Kenneth "Kenny-boy" Lay and his Enron bandits

were apparently involved to some extent in advising Bill Clinton and Al Gore on how to set up cap-and-trade systems for carbon emissions. Probably Kenny-boy made sure there would be no lack of opportunities for high rolling shysters and con artists like himeslf to make a few billion here and there while riding the newest gravy train to come into town.

Enron's other secret

Some of the climate-change profiteers are relatively unknown corporations; others are household names with only their behind-the-scenes role in the climate-change industry unknown. Over the next few weeks, in an extended newspaper series, you will become familiar with some of the profiteers, and with their machinations. This series begins with Enron, a pioneer in the climate-change industry.

Almost two decades before President Barack Obama made “cap-and-trade” for carbon dioxide emissions a household term, an obscure company called Enron — a natural-gas pipeline company that had become a big-time trader in energy commodities — had figured out how to make millions in a cap-and-trade program for sulphur dioxide emissions, thanks to changes in the U.S. government’s Clean Air Act. To the delight of shareholders, Enron’s stock price rose rapidly as it became the major trader in the U.S. government’s $20-billion a year emissions commodity market.

Enron Chairman Kenneth Lay, keen to engineer an encore, saw his opportunity when Bill Clinton and Al Gore were inaugurated as president and vice-president in 1993. To capitalize on Al Gore’s interest in global warming, Enron immediately embarked on a massive lobbying effort to develop a trading system for carbon dioxide, working both the Clinton administration and Congress. Political contributions and Enron-funded analyses flowed freely, all geared to demonstrating a looming global catastrophe if carbon dioxide emissions weren’t curbed. An Enron-funded study that dismissed the notion that calamity could come of global warming, meanwhile, was quietly buried.

snip

The intense lobbying paid off. Lay became a member of president Clinton’s Council on Sustainable Development, as well as his friend and advisor. In the summer of 1997, prior to global warming meetings in Kyoto, Japan, Clinton sought Lay’s advice in White House discussions. The fruits of Enron’s efforts came soon after, with the signing of the Kyoto Protocol.

http://network.nationalpost.com/np/blogs/fpcomment/archive/2009/05/30/lawrence-solomon-enron-s-other-secret.aspx

[jtrockville]

6. VIDEO: The Story of Cap and Trade

From Annie Leonard (who gave us "The Story of Stuff")
http://storyofstuff.com/capandtrade/