Video | Business Headlines | Internet | Science | Scientific Ethics | Technology | Search

 

Carbon Trading Open Invitation To Fraud

Carbon Trading Open Invitation To Fraud

Carbon trading is an open invitation to fraud, in the opinion of Auckland energy consultant Bryan Leyland, who is chairman of the economic panel of the New Zealand Climate Science Coalition.

"I first heard about carbon trading at a conference more than 10 years ago. I got up and said 'If I was the financial adviser to the Mafia, I would advise them to get into carbon trading.' Nothing that has happened since then changes my opinion - rather the reverse," said Mr Leyland.

"It is interesting to compare it with electricity trading. In an electricity market, the amount of electricity bought and sold is measured to an accuracy of +/- 0.2% every 30 minutes. On top of that, when you buy electricity, you get an amount of energy of high value that you can use directly for your benefit.

"With carbon trading, it is all different. The amount of greenhouse gas emissions from an industrial plant can be measured to an accuracy of, at best, +/-10%. If you are purchasing carbon credits from, for instance, a forest, the accuracy of measurement is probably something between +/-100%. If it is a tropical forest, it could be minus 150% because there is reasonable evidence that some tropical forests are net emitters of greenhouse gases," Mr Leyland continued.

"But it gets worse. In between the buyer and seller is an 'auditor' who, in theory, can make an accurate judgement as to the quantity of greenhouse gases being traded. He is the direct equivalent of the old inspector of weights and measures or electricity meter reader. If the reading of an electricity meter is fiddled, one party wins and the other party loses. But if an auditor fraudulently states that a forest is absorbing say, 200 tons of carbon dioxide per annum when a more realistic figure might be 100 tons, both parties win. The forest owner wins because he sells more credits. The purchaser of the credits wins because he is out to buy a piece of paper certifying that he purchased carbon credits. If the volume is fiddled upwards, the chances are that the price per tonne will be reduced and, anyway, he probably needs to buy more credits than are available.

"So, to my knowledge, carbon trading is the only commodity trading where it is impossible to establish with reasonable accuracy how much is being bought and sold, where the commodity that is traded is invisible and can perform no useful purpose for the purchaser, and where both parties benefit if the quantities traded have been exaggerated.

"It is, therefore, an open invitation to fraud and that is exactly what is happening all over the world," said Mr Leyland.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Dump Levy Options: Waste Work Programme Announced

Associate Environment Minister Eugenie Sage has announced a programme of work to take action on New Zealand’s long-neglected waste problems. More>>

ALSO:

Real Estate: Foreign Buyers Ban Passes Third Reading

The Bill to put in place the Government’s policy of banning overseas buyers of existing homes has passed its third and final reading in the House. More>>

ALSO:

Nine Merger: Fairfax Slashes Value Of NZ Business

Fairfax Media Group more than halved the value of its Kiwi assets, attaching just A$40 million to mastheads that were once the core of a billion dollar investment. More>>

Collecting Scalpers: Commerce Commission To Sue Viagogo

The Commission will claim that Viagogo made false or misleading representations: • that it was an “official” seller, when it was not • that tickets were limited or about to sell out • that consumers were “guaranteed” to receive valid tickets for their event • about the price of tickets... More>>

ALSO:

Price Of Cheese: Fonterra CEO Goes Early After Milk Price Trimmed

Aug. 15 (BusinessDesk) - Fonterra Cooperative Group chief executive Theo Spierings is leaving the role early after the world's biggest dairy exporter lowered its farmgate payout and trimmed its dividend to retain cash. More>>

ALSO: