Wednesday, 20 July 2011

EU chief climate alarmist Hedegaard sides with the climate-industrial complex

It is not surprising that the European Union´s chief climate alarmist Connie Hedegaard has sent this message of congratulations to the Australian government:

On the occasion of the announcement of a carbon price by the Australian Government, EU Commissioner for Climate Action Connie Hedegaard said:

''Congratulations to Australia for its commitment to pricing carbon emissions and introducing a domestic cap-and-trade scheme from July 2015. Our experience in Europe is that our emissions trading system has led our most forward thinking industries to some very creative and innovative ways of working, that help reduce emissions and cut costs. This creativity is also developing the skills and experience in the industries of the future. We look forward to Australia embarking on the same route and make a carbon market the core of its policy response to the climate challenge''.

Hedegaard is, of course, right about the "very creative and innovative ways of working" when it comes to cap-and-trade in Europe. Here are some examples of this "creativity":

In addition to over-allocation, windfall profits and the more fundamental problems with the EU ETS, other scandals have taken centre stage recently. In 2010, reports of more sophisticated forms of corruption have demonstrated that when 'buying' and 'selling' a sham commodity, the possibilities for fraud are endless.

"Carousel" fraud:

'Carousel fraud', which was widespread in 2010, involves claiming value-added tax (VAT) refunds from international carbon trades. The traders import the "goods" or allowances tax-free from markets in other countries and sell them on to domestic buyers, charging the VAT which was never passed on to the treasuries. The result is a quick and difficult-to-trace profit. Part of the problem is that trading in the ETS happens over several different registries making transactions and 'authentic' allowances difficult to verify. The European investigation continues, at the time of writing, with a suspected €5 billion carbon trading tax cost, across at least 11 countries.

New EU regulations have tightened up VAT regulation, making this form of fraud more difficult. However, registries are lax and inconsistent across EU states. When the allowances enter the registries, their authenticity is nearly impossible to determine.

More fundamentally, many registries neglect to carry out any checks on the applicants that seek to open a trading account. The Danish registry, for example, failed to administer checks over the course of two years and was found to be filled with fraudulent companies and false names. Over 90% of the account holders in the Danish system were deleted last year.

Carbon offset fraud:

Carbon offsets are another fundamental problem with carbon trading. The EU ETS is the biggest buyer of credits issued through the UN-backed Clean Development Mechanism (CDM). By using offsets to meet emissions reductions targets, the purpose of capping emissions becomes obsolete. Companies can simply buy credits to pollute from so-called emissions reduction projects in the South, thereby eliminating the need to reduce pollution at source and, as extensive research has shown, exacerbate social and environmental problems for communities in the South.3

Offsets are rife with corruption from the ground up, from the projects to the companies that implement them all the way to double counting on the market. Offsets enable companies and governments in the North to continue polluting while exacerbating harmful development in the South.

Fake registries:

Other fraud in the market includes the creation of fake registries. The wide-spread 'phishing attacks' were prompted by e-mails to thousands of firms around the globe, including New Zealand, Norway and Australia, with the hardest hit countries being Germany, Belgium, Denmark, Greece, Italy, the Netherlands and Spain. The attack closed down registries in at least 13 countries while fraudulent transactions were conducted.

The scam involved emails promoting the fake registry and prompted users to log on to their website and reveal user identification codes to carbon trading registries. The 'phishers' would then use this information to carry out transactions in the registries. It is estimated that over €3 million were netted in phishing scams in February 2010.7

Hacking and selling on the "spot" market:

Possibly the most costly scandal has been hacking into computer systems and selling the allowances on the 'spot' market – the trade for permits in return for cash payments, which is estimated to account for 10−25% of the total market. Spot trading allows permits to be sold for cash. The spot market increased 450% over 2008 which totalled 1.4 billion tonnes in 2008. Spot volumes in the first half of 2009 increased 75-fold from 2008.8

European countries have called for a central register to control the CO2 certificate trades earlier than the 2013 planned date. However, the proposed central registry would link to emerging markets in other OECD countries. The market is rife with loopholes and ways to sidestep responsibilities. Global linking would increase, rather than reduce, the complexity and potential for fraudulent trading, because it would involve exchanges of permits that are subjected to different financial and environmental rules.

Read the entire article here

Of course, Connie Hedegaard knows the truth about the EU´s cap-and-trade fraud and she also knows that the EU ETS has not reduced emissions in Europe.

The question is then: Why is Hedegaard still continuing here cap-and-trade crusade?

Maybe for the simle reason that the interests of the climate-industrial complex (to which some of the most "polluting" energy companies now belong) in reality are the number one priority for her - much more important than actual CO2 reductions.

This is what another Dane, Bjørn Lomborg wrote about the climate-industrial complex alredy in 2009:

Naturally, many CEOs are genuinely concerned about global warming. But many of the most vocal stand to profit from carbon regulations. The term used by economists for their behavior is "rent-seeking."
The world's largest wind-turbine manufacturer, Copenhagen Climate Council member Vestas, urges governments to invest heavily in the wind market. It sponsors CNN's "Climate in Peril" segment, increasing support for policies that would increase Vestas's earnings. A fellow council member, Mr. Gore's green investment firm Generation Investment Management, warns of a significant risk to the U.S. economy unless a price is quickly placed on carbon.

The cozy corporate-climate relationship was pioneered by Enron, which bought up renewable energy companies and credit-trading outfits while boasting of its relationship with green interest groups. When the Kyoto Protocol was signed, an internal memo was sent within Enron that stated, "If implemented, [the Kyoto Protocol] will do more to promote Enron's business than almost any other regulatory business."

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