Carbon markets have failed – prone to fraud – experts report

Climate change is the world’s biggest market failure so why would we expect carbon markets to save the day? There isn’t going to be a climate treaty for some years yet.It is simply too complex and politically charged. Don’t be too depressed about this. We are in uncharted waters as a species in trying to find an equitable way to manage the climate of our planet. But action is needed now and the best place is at our local neighbourhood level to save energy, use alternatives, build communities and inform people IMHO. — Stephen

By Stephen Leahy*

BONN, Jun 22, 2011 (Tierramérica)

Carbon markets have been widely promoted as the only way to generate enough money to enable industries and countries to reduce their carbon dioxide emissions, which are largely responsible for global warming. The only problem is that nearly 20 years after their conception, they have failed to work, and have also been subject to fraud and other financial crimes.

Interpol, the world’s leading policing agency, has warned that carbon market schemes are easily taken advantage of by organised crime.

Earlier this year, carbon credits worth 38 million dollars went missing in the European Union’s carbon market after funds were transferred by computer hackers from the Czech Republic to Poland, Estonia and Liechtenstein before disappearing. That was the fourth time funds had been stolen or mislaid.

“A lawyer formerly involved in carbon trading told me that if markets are still trading carbon 10 or 15 years from now, then the global environment will be in very big trouble,” Steve Suppan, senior policy analyst at the U.S.-based Institute for Agriculture and Trade Policy (IATP), told Tierramerica.

“Carbon markets are open to fraud, misrepresentation and deceptive promotion,” Suppan said in an interview at the United Nations Framework Convention on Climate Change (UNFCCC) negotiating sessions held in Bonn Jun. 6-17.

These markets have had huge support from governments and they still do not work to effectively reduce greenhouse gas emissions, said Suppan, whose organisation works on trade, agriculture and environmental issues.
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