Chemical News & Intelligence
January 13, 2010
TORONTO (ICIS news)–Cap-and-trade schemes to curb global carbon dioxide (CO2) emissions may turn out to be a “big scam” because they are impossible to properly police, a Canadian environmental advocacy group said on Wednesday.
Patricia Adams, executive director of Toronto-based Probe International,maintained that cap-and-trade carbon markets are political constructs controlled by politically empowered regulators who would be gatekeepers to a multi-trillion dollar market.
The regulators themselves would become too numerous to regulate, thus making way for “the tried and true recipe for good old fashioned and widespread corruption,” she said in a paper.
Canada’s chemical industry trade group, the Chemistry Industry Association of Canada, noted Adams’s paper on its website but had no immediate comment.
Last month, the chemical group urged Canada to align its climate policies with those of the US, where Congress is working on legislation that could include a cap-and-trade plan.
Adams, who referenced research by fraud investigators Kroll and Deloitte Forensic, said that law enforcement was noting an “upsurge” in fraud related to cap-and-trade permits.
So much fraud had been occurring that Europe’s police agency Europol estimated that up to 90% of all carbon market volumes in some EU countries was related to fraudulent activities, she said.
The essential problem of cap-and-trade was that CO2, unlike other commodities, had no inherent value. Rather, the value was in the trading permit itself, she said.
As such, neither buyer nor seller of a carbon permit had an incentive in properly policing transactions, she said.
At the same time, governments were balking at the huge cost entailed in meaningful regulation and enforcement.
“Because CO2 is ubiquitous in society, affecting most industrial processes, an army of inspectors and auditors would be needed to properly check the countless transactions that would occur to ensure that no company’s carbon foot print was understated, that every windmill contracted for in faraway lands was indeed built, that every metre measuring the flow of gas piped underground was recording CO2 and not air and that every seedling committed to be planted was planted,” Adams said.
“There are no identifiable victims. The only loser – if there is any – is the planet, and it won’t be blowing the whistle on this crime,” she said.
In Canada, two of the country’s largest chemical producers – Dow Chemical and DuPont Canada – recently called for a cap-and-trade system with an absolute cap on greenhouse gas emissions, as opposed to an “intensity-based” plan urged by the country’s growing oil sands and bitumen industry.
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Categories: Carbon Credit Watch