The great carbon con

By Other News Sources on February 23, 2010 • ( Leave a comment )

Brady Yauch
Probe International
February 23, 2010

Optimists say the carbon market could one day be worth as much as $2-3-trillion dollars if countries like the United States implement a legally-binding cap-and-trade system. But those numbers may be wildly optimistic in the wake of the scandals involving scientists and research centres supporting climate change and the recent political back-tracking on implementing cap-and-trade schemes. More realistically, the carbon market is struggling just to stay relevant.

Despite the threat to its very existence, the carbon market is still big money—with the World Bank estimating it to be worth more than $120-billion. What they don’t say is that the carbon market that is extremely difficult to police and riddled with fraud.

Now, in an excellent Harpers article, Mark Shapiro, a senior correspondent at the Center for Investigative Reporting in Berkeley, California has detailed many of the problems facing the carbon market—particularly the UN’s Clean Development Mechanism (CDM). The CDM allows parties in the developed world to “offset” their carbon emissions by investing in “green” projects in the developing world while they continue to produce CO2 emissions at home. So far, the UN has approved more than 300 million credits, worth billions of dollars.

But, says Mr. Shapiro, these carbon projects simply, “have not delivered the promised amount of emissions reductions.”

Furthermore, according to Mr. Shapiro, some analysts believe that around 15 to 20 percent of (carbon) offset credits should never have been issued, as they financed renewable-energy projects that would have gone ahead anyway and are not, therefore, adding to the displacement of CO2.

Meanwhile, he says: “The increasingly complex and far-flung projects, with developers dredging up thousands of claimed reductions in remote areas all around the world, already far outstrip the U.N.’s ability to police them adequately.”

Effectively regulating this market is, in a word, impossible: “To maintain even the current level of monitoring would represent an undertaking of enormous scope, necessitating the coordination and management of hundreds (if not thousands) of field personnel, stationed in remote offices literally everywhere in the world.”

Others, including Probe International, have come to the same conclusion—that carbon is only valuable as a commodity as long as politicians continue to decree it so.

Carbon, Mr. Shapiro says, “exists as a commodity only through the decisions of politicians and bureaucrats, who determine both the demand, by setting emissions limits, and the supply, by establishing criteria for offsets.” The resulting carbon market is what he calls an “elaborate shell game.”

Download the full article here.

Read Mark Shapiro’s blog here.

Further Reading: