January 17, 2010
Carbon credits a scam to be feared
By LORRIE GOLDSTEIN,
With everyone from Lloyd’s of London to Rolling Stone magazine warning about the global financial scam heading our way with the international trading of carbon dioxide emissions, you have to ask yourself:
When are our politicians going to acknowledge it? When are they going to stop pretending “there’s nothing to see here, folks” and that we should all move along?
When are Prime Minister Stephen Harper, Liberal Leader Michael Ignatieff, NDP Leader Jack Layton, the Bloc Quebecois and premiers like Ontario’s Dalton McGuinty and Quebec’s Jean Charest, going to admit the obvious?
That is that the looming cap-and-trade market in carbon dioxide emissions Canada will soon be dragged into - fuelled by carbon credits - is a financial disaster waiting to happen.
How many multi-billion-dollar fraud investigations by police into Europe’s five-year-old cap-and-trade market, the Emissions Trading Scheme (ETS), where up to 90% of the trading is suspect in some countries, is it going to take?
How many allegations of corruption, profiteering and fraud in the UN’s ironically-named Clean Development Mechanism, which generates carbon credits?
Last week, Daniel Golding, a risk analyst with Lloyd’s of London insurer Chaucer Syndicates Ltd., warned clients on the company’s website (www.lloyds.com), that “the potential collapse of the carbon credit market” is one of the biggest risks facing investors in 2010 and beyond.
As the Lloyd’s publication 360 Risk Insight put it: “On the subject of cutting CO2 (carbon dioxide) emissions, Golding is concerned that carbon credits are being packaged into increasingly complex financial products, similar to the 'shadow finance’ around sub-prime mortgages which triggered the recent economic crash.” Got that? Golding added carbon credit trading, while providing a cash bonanza for industry, doesn’t lower emissions.
“As recession slashes output,” he warned, “companies pile up permits they don’t need and sell them on. The price falls, and anyone who wants to pollute can afford to do so. The result is a system that does nothing at all for climate change but a lot for the bottom lines of mega-polluters.” In July, 2009, award-winning U.S. journalist Matt Taibbi, writing in Rolling Stone, warned in his exhaustive article, The Great American Bubble Machine, how powerful U.S. investment bank Goldman Sachs, which has lobbied hard for carbon trading, is poised to profit from it in the same way it did during The Great Depression, the tech stock bubble, the housing bubble, the oil bubble and the $700-billion US, tax-funded bailout of many of the same money houses whose trading practices helped crash the global economy.
Read Taibbi’s piece for yourself, widely available on the Internet, starting with his description of Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Goldman Sachs responded Taibbi’s piece is “an hysterical compilation of conspiracy theories,” that it rejects his assertion “we are inflators of bubbles and profiteers in busts” and that the firm is “painfully conscious of the importance in being a force for good.” Be that as it may, based on the real-world experience of cap-and-trade, if our governments are hell bent on putting a price on carbon dioxide emissions, a carbon tax would be better, with 100% of the money returned to taxpayers in income tax cuts.
Finally, we should outlaw carbon credits, which are a scam.