The EU carbon market is in trouble again. Shucks. Who would have guessed?
Hackers have created so much disarray the EU market has been shut down.
(Reuters) – The European Commission has frozen spot carbon trade in its 72 billion euro ($97.1 billion) emissions trading scheme after carbon permits were allegedly stolen. [Reuters]
A market based on an unmeasurable entity — an atmospheric nullity that-might-have-been-worse — was asking for trouble. It’s not that the market has loopholes, it is a loophole. Offering an infinite array of ways to cheat, guarantees the crooks will come. “Lead us Not into Temptation” ought to start with managing the temptations. Carbon is not a commodity, it’s not a free market, and so sooner or later it will come undone. (That said, dumb ideas have lasted for decades). We might get lucky this time.
As I’ve said before, if the bulk carrier turns up empty, the buyer notices the coal is missing. But if the scammers sell empty carbon credits, who can tell? The two top auditors were suspended, prices have been falling and people leaving for better opportunities, some shifty Hungarians sold credits twice (and were allegedly not the only ones to do so), some UK naughties used it to avoid paying the VAT tax, as well as a string of other offenses.
Europe’s €90bn carbon emissions trading scheme is in disarray, after a series of electronic thefts now thought to be worth €30bn.
Hackers targeted the national carbon credit registry in the Czech Republic last week, forcing the European Commission to order a continent-wide shutdown of the entire spot trading market.
The stolen permits were transferred from one country to another before vanishing completely. The Czech theft follows cyber-attacks on the Austrian and Greek registries in the last few weeks, and on Romania’s in November.
Futures and options markets in the permits have remained open, but prices have plunged as traders worry that the thefts endanger the credibility of the entire scheme. Read More at NewEnergyWorldNetwork…
Reader Stefan points out that the scheme has enemies within the EU:
The governments in Poland, Czech, Hungary, Spain and Slovakia would be happy to see the EU ETS collapse for good.
Reuters carries a list of scandals including:
DECEMBER 2010
One million EU carbon permits go missing from Holcim Romania’s emissions registry account due to a computer virus.
Italy‘s Gestore Mercati Energetici (GME) suspends spot trade after a record number of permits were traded at deep discounts.
Italian tax police investigate numerous small Italian firms for VAT fraud in carbon trading resulting in 500 million euros of unpaid tax. EU Commission says it will examine oversight of carbon market in 2011 and enhance it to prevent fraudulent activity.
There are plans to reopen the market:
BRUSSELS/LONDON, Jan 20 (Reuters) – The EU will reopen its 72 billion euros emissions trading scheme step by step, as each registry proves its security, a senior official said after the bloc froze spot trade due to possibly concerted permit thefts by hackers.
Is this the beginning of the end?
Reuters estimates the market to be $100b US (see the first quote above) – which, if true, tells us the market peaked in 2009 at $130 billion, and is slowing down. The exponential curve of growth ramped up until 2009 when it flattened. This would be the first sign that it’s seriously lost momentum. [Can anyone find a tally for the total of 2010 trading in carbon permits?]
Related Posts I’ve done on powerful force given to those who can create a currency:
Climate money: Bigger money moves in
Carbon credits: another corrupt currency?
Other posts I’ve done on carbon markets and corruption
The carbon casino caught with its pants down (again)
Corruption for dinner anyone: The Carbon Market Scandal (HFC -23)
Carbon market chaos strikes again
Posts on the banker enthusiasm for carbon trading
Deutsche Bank “really” want us to trade Carbon
Bankers, lawyers, investors disappointed: shucks
Today i have symbolically stuck the Siliggy flag into an iron bearing meteoritic dust particle. I claim native title on this and all cosmic dust. Should one of my cosmic dust clouds in the future happen to fertilise the seas and cause CO2 levels to drop, i claim the rights to all of the worlds carbon credit for the CO2 reduction attributable to my dust.
Lance Pidgeon
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And on top of the fraud etc. in the market if you had to rely on the “experts” at the UK Met office you are absolutely guaranteed to lose your money
http://wattsupwiththat.com/2011/01/28/the-met-office-and-the-bbc-caught-cold/#more-32637
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I agree with Stefan.
I would also not be surprised to see one or more of these countries bailing out of the EU itself. Tensions are mounting, but are being ignored by the Colleagues as “mere chatter”, and therefore irrelevant.
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to the highest possible standards.
Two of the eight requirements all applicants must meet.
# A good understanding of the values of ABC NewsRadio and its output.
# A sound understanding of ABC Editorial Policies and complaints handling procedures.
I’m sure you can all update the wording of the first of these two conditions to something closer to ABC’s true editorial policies.
Any Takers, someone to keep aunty balanced. Someone with a true sence of adventure.
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“Be careful what you wish for”. Do not be surprised if this is not the prelude to the battle between the “bankers” (such as Malcolm Turnbull) and the bureaucratic centralists (such as Julia Gillard). They both want the product of your labour. One to live a lavish lifestyle the other to grow a bureaucracy to tell you how to live your life. Neither one of which is a particularly enticing future.
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Futures and options markets in the permits have remained open, but prices have plunged as traders worry that the thefts endanger the credibility of the entire scheme.
Worried about credibility? These guys are joking aren’t they? or in the words of that famous Americn.
“YOU CAN’T BE SERIOUS”!?
Fools!
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There are two aspects of the AGW circus faith which never cease to amaze me:
1. criminals will leave carbon trading alone,
2. future generations will maintain the same urgency (perceived by the Greens) required to reduce emissions.
Regarding the first of these, I haven’t seen that stated anywhere. It’s just the impression I have after reading various comments from the community about the “necessity” and “inevitibility” of it for Australia. The naivety is stunning.
Regarding the second, to expect our children (and their children) to make sacrifices to their standard of living in order to continue relieving the “guilty consciences” of their parents is unrealistic. They simply won’t buy it. My mother had no success in wanting me to enjoy piano lessons or Sunday School.
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Jo,
Suppressing the truth is science keeps this business going.
If AGW was found to be misleading or a fraud, then it makes no sense to trade carbon credits.
Can you say “vested interest”?
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There are no procedures practicable to eliminate the high risk of fraud associated with the EU’s emissions trading scheme… such is the nature of this flawed trading system, which trades in nothing but ‘hot air’! Significant frauds that have been uncovered to date, involving billions of euros, should by now have sent a message to the EU commissars that its time to shut down the EU’s ETS. But, as we all know, the EU is a glutton for punishment. It will reopen the Scheme … in several months time it will uncover yet more fraudulent activity … it will again go into a state of denial … and the process will repeat itself! The question begs, why on earth would anyone even dabble in this dodgy market that, for all intents and purposes, deals in worthless nothing?
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Mervyn @8,
I can’t help thinking the entire emissions trading scheme itself is a fraud. If you or I tried to run such a thing based on a commodity of no intrinsic value we’d end up in jail.
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It is hard for me to feel compassion for what seems to be theft from government sanctioned fraud. The thief’s fence had his pocket picked. I do feel something for the presumably innocent (investors), but I’m not sure what. There are myriad ways to donate and make the world (hopefully) a better place and none of them (injured war vets, disaster relief, Consumer Reports, medical research) involve something as dubious as CO2 poisoning.
Jim
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Mervyn Sullivan:
At #9 you ask:
The answer is simple.
A ‘carbon market’ is the only market that pays both the buyer and the seller to lie, and it has no possibility of being policed.
Therefore, anybody who enters the market in its early days makes much money from undetectable false trading. So, of course, anybody ‘on the make’ joins a ‘carbon market’ each time it is launched or re-launched.
And the EU ‘carbon market’ keeps being re-launched because
(a)
the false trading rapidly collapses the market’s price for its imaginary commodity, and
(b)
the EU is so determined to have a ‘carbon market’ that the EU re-launches it after each collapse.
When the EU ‘carbon market’ was first suggested I said that such a market has corruption built-in to it and the mafia would have had difficulty suggesting a better system for its activities. Nothing that has happened since then has altered my view of this in any way.
Richard
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This is fun to watch, isn’t it..?
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I found this on Verizon.com — UN chief pontificating in DAVOS, Switzerland about how terrible the world economic model is, “…a global suicide pact if it isn’t reformed,” and how little time there is to fix it before climate change gets us all.
At this forum of world business and political leaders Bill Gates
Half right anyway. Bill, you were better at software!
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Snouts in the trough. If they build it they will come. The EU commissioners, The EU MPS, The Bankers, The Hackers, Scammers, Al Gore etc. All profiting from carbon trading activity….well….legalised fraudulent activity. Unfortunately, more and more of these people (including criminals) will try and gain access to this carbon pot of gold. And its commodity? Well….fresh air really.
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As Richard@12 notes any carbon trading scheme is a bright red flag being waved in front of the bull of corruption and business opportunism. Many people would perhaps be not aware that Australia has had a carbon trading scheme in place in NSW, that bastion of political virtue and incorruptible business practice, and that there is another such scheme proposed for Norfolk Island; I discuss them here, at another bastion of integrity:
http://www.abc.net.au/unleashed/41816.html
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The aspect of CAGW “science” that I find most alarming/hilarious/outrageous is that, if you follow the logic to its natural conclusion, it was dangerous and evil for the human race to have begun, hundreds/thousands of years ago, to have begun mining hydrocarbons in the earth’s crust to produce energy for heating at first, then to generate electricity and power for combustion engines. My theory of CAGW is that it was possible for it to get past first base as a theory only as a result of at least three decades of corruption in the education system, which brainwashed a generation Western children to adore nature as a deity; thus we produced a generation of climate scientists who entered the field because of a love of nature and are irrationally prone to the idea that the human race is evil. Had they studied climatology through a love of science, we would not now be trying to make sense of an all-powerful cult that is attempting to dismantle our civilisation.
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Gillard’s Flood tax a high-water mark in cases of political cynicism !!
http://blogs.news.com.au/dailytelegraph/piersakerman/index.php/dailytelegraph/comments/flood_tax_a_high_water_mark_in_cases_of_political_cynicism/
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Roy, Bill wasn’t that good at software either, just ruthless. The American way of business.
It’s OK to get ahead, just don’t do it at somebody else’s expense.
As for selling imaginary commodities, thought about airline frequent flyer schemes? I heard recently that the Qantas scheme is worth more than the actual airline which has actual aircraft, pilots, mechanics etc. WTF???
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Snouts in the trough. If they build it they will come. The EU Commissioners, EU MPS, Hackers, Scammers, Al Gore etc. The results is the same, legalised fraudulent carbon trading. Unfortunately, more and more rogue people (mostly criminals) will try and gain access to this carbon pot of gold. And its commodity? Well…. fresh air really.
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Mike,
Bill Gates ran a good company for a long time. He beat his competitors by working smarter than they did and he spent heroic amounts of time keeping on top of his customer’s needs and ahead of those competitors. Was he ruthless or just determined? I’m not sure I know how to tell the difference.
I’m not going to just blindly defend him. He screwed up big time when he tried to put requirements on OEMs that they couldn’t install any other OS if they wanted the license to install Windows.
The rest of Microsoft’s trouble seems to be largely the complaint by would-be competitors that they couldn’t sell browsers because one came bundled with Windows and bundling it should somehow be illegal. Only the EU fell for that if I remember — legalized jealousy.
What’s with Qantas? Frequent flyer miles are supposed to be a contract good for future transportation in exchange for so many paid miles with the airline to earn them. That’s certainly something of value. Did Qantas forget to put a reasonable time limit on those miles? Your statement sounds like they’re upside-down.
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Roy Hogue @10
Isn’t fraud the reason why carbon trading was invented in the 1st place?
To defraud people of money and wealth in the name of saving the planet.
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The following article, ‘BBC and Met Office Caught in Ponzi Scam over Winter Forecast Fiasco’ is enough to send shivers down one’s back.
http://johnosullivan.livejournal.com/29957.html?mode=reply
What is worrying is how this matter is linked to pension fund managers, who have so heavily invested monies from pension funds in this global warming scam! As the author points out:
“In the UK the size of public sector pension liabilities has been estimated at £770bn by the Treasury and £1.18 trillion by actuaries Towers Watson. Peter Tomkins, Commission chairman and Fellow of the Institute of Actuaries, warns that: “The Government has hidden behind costings which pretend that the unfunded schemes earn a return well above [market rates] … Like an unstable Ponzi scheme.”
The author has previously warned about how the United Nations green machine via a consortium known as ‘UNEP FI’ has been sucking up trillions of dollars of investments from pension funds around the world.
http://www.climategate.com/follow-the-money-bbc-exposed-in-biggest-climate-racket-on-planet
It is simply shocking … but don’t expect governments to do anything about it. They’re so deep in this quagmire, the day the bubble bursts the recent GFC will look like child play! And it will seriously impact on all of us.
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Bill Gates promoting the idea of exterminating human beings using “vaccines” to satify his gaia god…….
http://vanshardware.com/2010/02/bill-gates-we-can-lower-the-worlds-population-with-vaccines/
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Super Green, putting your retirement in Al Gores hands?
http://www.twawki.com/?p=2714
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For those who may have had lingering doubts about Ban Ki Moon’s mental state.
http://hauntingthelibrary.wordpress.com/2011/01/28/un-sec-gen-capitalism-is-environmental-suicide-says-we-need-a-revolution/
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desperadoes.
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Mervin @ 23
The gargantuan gazzillions that have been thrown at the Green Economy will evaporate once the “Natural Market Market” forces catch up with it. And they will. One thing that is “Natural” about an economy is Supply and Demand driven markets. The Soviet Union found this out. The only way to run an economy is to have equally and highly educated participants that make informed, rational decisions.
The volume of un-educated irratrional participants has increased over the 30 years. This will change as falsehoods are realised, questions asked and the education process kicks into gear. At this point the end is nigh for the irrationalists.
The economics of renewables and green energy schemes means they have to be heavily subsidised which in turn creates an imbalance in competiton for resources and funding.
The green economy is and always has been purched on a knife edge.
This money is now not available to bail out systems that will need assistance. transport system, agricultural systems, health systems etc.
A micro exaple of what the world is doing is what the Rudd/Gillard government has done over the last few years. Spent the savings and when a real rainy day arrives theres nothing left.
A fear, with the debt burdens of the EU, The USA purched prechariously, when the buble bursts it will be a “Big Bang”.
Asia is tipped to take the reigns of the dominant player of the world economy in the coming decades. It will be interesting to see if they hamstring themselves as west is doing. 😉
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John Smith @22,
You said it better than I did. We are all in deep trouble. 🙁
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At post 14 I was hesitant to say what was really on my mind about Bill Gates (and many others). But I think I need to say it.
I’m hard put to find an explanation for why so many who are very successful in business and industry let their brains turn to mush when they look at the wider world around them. A man like Gates should be wise enough to ask some penetrating questions before he accepts something as true. And as he goes he should keep on questioning. How can the most successful business man the world has ever known stand the stink of the United Nations? How can anyone even contemplate being involved in this? I don’t get it.
Thanks to Percival Snodgrass @24 for the link.
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I dunno – makes the South Sea Bubble and tulip futures look like sensible ideas by comparison…
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Now for the bill for this green madness !!!!!!!!!
http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/now_for_the_bill_for_this_green_madness/
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But, Penny, look at the oceans you said were warming
http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/but_penny_look_at_the_oceans_you_said_were_warming/
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Shock: trading in hot air can get you burned!
http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/shock_trading_in_hot_air_can_get_you_burned/
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How global warming became political poison
http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/how_global_warming_became_political_poison/
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I encourage everyone to read the following article in the UK’s Daily Mail:
http://www.dailymail.co.uk/home/moslive/article-1350811/In-China-true-cost-Britains-clean-green-wind-power-experiment-Pollution-disastrous-scale.html
This is the monstrous dirty secret that environmentalists don’t like the world to know about green technology… they want you to think it is ‘clean’. Yes, well here is the proof it can be anything but ‘clean’!
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Most of the clean energy companies in Australia are in serious financial trouble including Geodynamics and Infigen (wind and solar power).
As Warren Buffett once said ‘Never invest in a company that relies on government subsidies’.
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This fraud relates only to carbon credits which have been electronically stolen. It represents a small fraction of the fraud which is going on in terms of claiming carbon credits and accounting for carbon emissions. What do we expect when so much of the process of auditing the carbon credit and CO2 emissions is done by those who have a vested interest in supporting carbon trading.
PS: Thanks to those who posted links to the articles on the production of UK wind turbines in China, and Bolts latest on Ocean temperatures.
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