The carbon casino caught with its pants down (again)
New Page 5
The carbon casino caught with its
pants down (again)
By Joanne Nova
Another major carbon auditor goes down.
Norways’ DNV (Det Norse Veritas, “The Norwegian Truth”) was
the largest auditor of the infamous CDMs (Clean Development Mechanisms)
until it was suspended last December when it was caught selling carbon credits
for projects it hadn’t checked. At the time it was so large it had approved
fully half of all CDM credits on the market. Its excess workload was
transferred to number two auditor, SGS, and shock, this week, SGS has been
caught and suspended because it couldn’t prove it’s staff had properly vetted
projects either. Indeed it couldn’t show that they were even trained to do
that vetting. (Did SGS not see this coming?)
When the West offered money to buy the rights to
air-with-slightly-less-carbon-dioxide-than-it-could-have-had, China and India
put up their hands and said “Yes please” 900 times. And why wouldn’t they? CDMs
are worth about 20% of all emissions trades, which amounted to $126 billion in
2008. Up until the global financial crisis it was doubling annually, like all
good ponzi schemes do.
This supposedly “free market” has none of the normal limits
which make it hard for companies to get away with cheating … namely a connection
to real material goods: usually if you don’t have it, you can’t sell it.
But with carbon credits, customers can buy fake products and never know the
difference — even after it’s “delivered”. That’s what you get when you deal in
atmospheric nullities.
…with carbon credits, customers can buy fake products and never know
the difference — even after it’s “delivered”.
It might be called a “carbon market”, but remember that no
one actually trades carbon, they trade rights to emit air with less
carbon, and it’s not even as physical as air with less carbon than it
used to have (something we can measure). No, it’s worse than that: it’s air
with less carbon than it might have had.
So it’s an underwhelming surprise that the top two auditors
have both been caught selling “Credits for emitting air that
might-have-had-more-carbon-in-it, which might-have-been-checked by people who
might-have-been-qualified to check these things”. Selling bridges in Boston has
more respectability.
Fortunately, because carbon doesn’t appear to make much
difference to the climate, whether the schemes work or not is a moot point.
Arguably, if The Point is assuaging western guilt for our successes, then an
imaginary credit is just as good as a real one. It’s one of those rare occasions
where the placebo effect is 90% effective.
Ultimately this is a market that depends on unknowable,
unprovable motivations: I wouldn’t have cleaned up or closed down my dirty
factory without all that money. Really. And by the way, I’m thinking of building
another one just like it… (Oi! want to pay me not to build it?)
Mass marketing meets the Emperors new clothes — with
undertones of extortion. This is how we save the world?
Recent legislation has tried to close some of the loopholes,
and like everything, there are honest operators out there among the crooks. But
seriously. It’s like knitting a battleship and hoping to make it waterproof with
bureaucrats. It’s not a question of closing loopholes — it IS a loophole. There
is almost nothing we can actually pin down — it’s an open invitation for
scammers and con-artists. The mat at the door says: “All Rorters Welcome. If we
catch you cheating we’ll change the rules. Next time you’ll have to cheat
differently.”
“It’s not as if we’re printing money in a garage,” Yvo de
Boer, U.N. climate chief, said of the credits. Which is true, there are no
garages involved. Just large multinational corporations.
Mass marketing meets the Emperors new clothes — with undertones of
extortion. This is how we save the world?
And it’s not as if the funds transfer from the West to the
Third world is helping the poor people in the street. The billions of dollars in
payments often end up with the financial brokers in London, and with potentially
corrupt bureaucrats in China. Interviews with locals near the
Xiaoxi dam project suggest people were evicted from their homes, and were
not paid enough compensation to buy new homes. The money for the credits
associated with the dam was supposed to reduce carbon emissions, yet
construction for the Dam started a full two years before the application for CDM
funding was even entered. (Before!) What looks like a Dam, acts like a
Dam, but isn’t…?
Bureaucrat-ite may work like a glue plugging holes,
but it repels free-markets. Too many bureaucrats and too many rules makes a free
market “fixed” in every sense of the word. But the
carbon-that-might-have-been-released market can’t be a bureaucrat-free,
free-market. It has to be a bureaucrat-rich. The only thing “free” about this
market is the price people would pay for
carbon-which-might-have-been-released-but-wasn’t.
