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CDM under Kyoto Protocol is not the answer -Another carbon credit fraud

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I have never been a fan of carbon credit mechanism under the Kyoto Protocol.While it is a market driven mechanism it has features which allow it to be gamed ,if not defrauded by connected people and organizations.Why should a hotel for example get a carbon credit for increasing energy efficiency for installing CFL lights while a poor person who does the same gets no benefit. While there have been numerous carbon credit frauds and gaming , this one reported in Germany is international in its scope.I think a uniform worldwide carbon tax with appropriate safeguards and exceptions may be a better solution to climate change.

Germany arrests 4 in CO2 probe, 50 more suspects – Reuters

Frankfurt prosecutors said on Friday they had arrested four people in Germany and Britain in connection with suspected tax evasion in carbon permit trading and 50 more people were being investigated.

He declined to name individuals, as is customary under German law. Deutsche Bank said seven of its employees were suspects in the investigation.

“Deutsche Bank believes the allegations raised against its employees can be rebutted,” a Deutsche Bank spokesman said.

Britain’s HM Revenue and Customs, which investigates tax fraud, said it could not comment.

Apart from tax evasion, the authorities were also looking into allegations of money laundering, the Frankfurt prosecutor’s office spokesman said.

“There have been raids and other measures in Britain, Denmark, Belgium, Finland, the Netherlands, Norway, Portugal, the Czech Republic and Cyprus,” he said.

The probe in Germany, where total damage is estimated at 180 million euros ($239.7 million), follows investigations in Britain, France, Spain, Norway and the Netherlands into carbon credit fraud over the last year.

The UK has its own, separate investigation into tax fraud in the carbon market. It arrested and subsequently bailed nine people last August.

Spokespeople for utilities EnBW and Vattenfall Europe said they were not affected by the tax office raids. Frankfurt-based Noble Group, one of the world’s largest carbon credit aggregators, said it was unaffected by the probe.

BUSINESS TIES

RWE’s trading unit said on Wednesday that although it was not under suspicion, it had had business ties with one of the suspects and was cooperating with the authorities.

Italian bank UniCredit SpA said the investigation was not directed against the bank, but some of its customers had been affected.

German energy industry executives expressed concern that other energy markets or other European nations’ carbon sectors could also be targeted.

Wider-reaching EU regulations for carbon were agreed in March but member states need to implement them by passing national laws now, which in Germany’s case will only apply from July 1.

European police agency Europol last December put the amount of damage from fraudulent EU carbon credit trading at more than 5 billion euros in the previous 18 months.

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

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