Friday, May 04, 2007

Carbon Scams


Victor Hugo
One reason that we need a climate stabilization premium to reduce carbon emissions instead of cap and trade programs is because to do it any other way, we invite scammers of all kinds, and instead of mitigating climate change, we might actually exacerbate it.

Here is an example from the Financial Times

Industry caught in carbon ‘smokescreen’
By Fiona Harvey and Stephen Fidler in London
April 25 2007 22:07

Companies and individuals rushing to go green have been spending millions on “carbon credit” projects that yield few if any environmental benefits.

A Financial Times investigation has uncovered widespread failings in the new markets for greenhouse gases, suggesting some organisations are paying for emissions reductions that do not take place.

Others are meanwhile making big profits from carbon trading for very small expenditure and in some cases for clean-ups that they would have made anyway.

The growing political salience of environmental politics has sparked a “green gold rush”, which has seen a dramatic expansion in the number of businesses offering both companies and individuals the chance to go “carbon neutral”, offsetting their own energy use by buying carbon credits that cancel out their contribution to global warming.

The burgeoning regulated market for carbon credits is expected to more than double in size to about $68.2bn by 2010, with the unregulated voluntary sector rising to $4bn in the same period.

The FT investigation found:

■ Widespread instances of people and organisations buying worthless credits that do not yield any reductions in carbon emissions.

Industrial companies profiting from doing very little – or from gaining carbon credits on the basis of efficiency gains from which they have already benefited substantially.

■ Brokers providing services of questionable or no value.

A shortage of verification, making it difficult for buyers to assess the true value of carbon credits.

■ Companies and individuals being charged over the odds for the private purchase of European Union carbon permits that have plummeted in value because they do not result in emissions cuts.

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Some companies are benefiting by asking “green” consumers to pay them for cleaning up their own pollution. For instance, DuPont, the chemicals company, invites consumers to pay $4 to eliminate a tonne of carbon dioxide from its plant in Kentucky that produces a potent greenhouse gas called HFC-23. But the equipment required to reduce such gases is relatively cheap. DuPont refused to comment and declined to specify its earnings from the project, saying it was at too early a stage to discuss.

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Blue Source, a US offsetting company, invites consumers to offset carbon emissions by investing in enhanced oil recovery, which pumps carbon dioxide into depleted oil wells to bring up the remaining oil. However, Blue Source said that because of the high price of oil, this process was often profitable in itself, meaning operators were making extra revenues from selling “carbon credits” for burying the carbon." more

Rich isn't it,

Polluters making even more money by polluting a little less.

Got to hand it to the capitalists,

They will do anything to make money.

Including selling the rope

we will need to hang them.


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2 Comments:

Anonymous Anonymous said...

I read this article, or one like it int he FT, in flight and made a mental note to ask you what you thought of it. The reasoning was thick and I wasn't impressed -- though I did think it was terrible idea to let the corps pay to pollute. Buying and selling that pollutes is basically capitalism.

Anyhow -- here are your comments before I had time to pose the question.

SB

3:34 PM  
Blogger OZ said...

I rearranged the first sentence on Sat. morning. It just didn't read right.

Paying polluters to not pollute would be a miscarriage of public policy. With a climate premium, they pay to pollute now.

Sure, they will pass the costs to the consumers, but other clean energy will then take their market share as they become more competitive.

12:21 PM  

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