Page 83 - Carbon Frauds and Corruption

Corruption of Bribery

Chapter 6 : Corruption in the “Carbon World”

The new Registry Directives result in the suppression of “unique unit identification codes” which
are to be treated as confidential and only available to EU systems administrators. The idea behind
this is, that by not knowing exactly what units were stolen, confidence in the market will return.

Within the European trading system there is no mechanism for recovering stolen units and loses are required to
rely upon local laws and enforcement authorities. In 2010 EAUs and CERS worth a total of $41 million were
fraudulently removed from the accounts of Drewsen Spezialpapiere in a sophisticated phishing scam and sold ‐
amongst others‐ to ScottishPower , RWE, Eon and Infraserve, a Frankfurt‐based infrastructure provider. The
incident resulted in the closure of Carbon Exchanges across Europe. Roughly 2.78 million of the 3.3 million
blacklisted credits remain in circulation

The EU argues its case for refusing to disclose serial numbers on the grounds that of “what you
don’t know cannot hurt you” and that buyers acting in good faith will acquire title even when the
95
units were stolen!. Moreover, exchanges will not be able to block stolen units Bless!
11 MORE ON THE EUROPEAN TRADING SYSTEM
The ETS, described briefly on page xx, is promoted as the pillar of the EU climate change policy
and manages what is usually referred to as the "traded sector" or "compliance sector with
96
transactions valued at €119.8 billion in 2010 . Details of more than 12,000 installations with a heat
capacity of greater than 20 MW in the industrial and energy sectors have accounts in the ETS‐
which are linked to National Registries and the International Transaction Logs ‐reconciles
allowances and offsets with annual emissions. Account holders are able to reassign and trade
credits by transferring them to other operators (if necessary across international borders), sell or
buy over‐the‐counter, through a broker or by private arrangements, dealing on the spot market
or through an exchange such as Blue Next.

Transactions are initially recorded in the Operator's National Registry transferred through the EU
and International Transaction Logs to what is effectively the definitive ETS register. Credits
generated through CDM or JI projects are also transferred into the ETS.

Operators are able to borrow allowances from future periods, although to what extent this will
apply in the Post Kyoto phase (Phase III 2013‐2020) has yet to be decided. Although the EU's
Climate Action Commissioner undertook to ban the use of industrial gas credits (primarily HFC
and nitrous oxide which she described as "totally lacking environmental integrity": see page
xxxx), the decision has been deferred under pressure from the International Emissions Trading
Association until April 2013. There seems little doubt that credits from these sources will be
accepted for compliance purposes in the ETS to 2020. This makes further nonsense of an already
nonsensical scheme.

95 Because they won’t know the serial numbers
96 Having risen from €7.9 billion in 2005

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