Climate Conversation Group

A suit in handcuffs. Only the educated, trusted men can engage in theft on this grand scale — £156 million! This story concerns GST fraud (called VAT in Europe) but there are easier scams occurring in the carbon trading field, based on the simple fact that the only thing being sold is thin air. Actually, it’s worse than that: they’re selling CO₂. Unmeasurable, invisible and useless to both buyer and seller. At least air is of some use. What a confidence trick!

Sends shivers down the spine, this does. For, not only does “regular” carbon trading take food from the mouths of mothers and babies, but fraudulent activities, increasing costs and therefore prices, take even more. How long before it turns up in New Zealand, if National really does launch its ill-advised scheme on July 1? The most important part of the story waits until the last two paragraphs, though I’ve flagged it in the heading. Further comments below.

First published by BusinessGreen, 30 Apr 2010

by BusinessGreen.com staff

German carbon fraud investigation moves to UK

Prosecutors confirm that four arrests have been made in €180m fraud investigation

German prosecutors today confirmed they have arrested four people in Germany and the UK following raids on more than 50 homes and offices this week in connection with an alleged €180m (£156m) carbon fraud.

A spokesman for prosecutors in Frankfurt told news agency Reuters that in addition to the arrests, a further 50 people were still being investigated on suspicion of tax evasion.

He also confirmed that the investigation had quickly spread across Europe and that there had been raids and other measures in Britain, Denmark, Belgium, Finland, the Netherlands, Norway, Portugal, the Czech Republic and Cyprus, all in connection with alleged carbon fraud and money laundering.

Skyscrapers. This is where the faceless money men gather. For genuine concern for the environment to enter these lofty palaces of profit would announce a revolution in thought. Not that that particularly worries me, it merely signifies that, if these altitudinous addresses appear on carbon-trading letterheads, the enterprise does not concern itself with saving the world from warming, even though that is the only reason for the carbon trading.

The investigation centres on what is thought to be one of the most wide-ranging instances of so-called carousel fraud to be uncovered in the European emissions trading scheme. The fraud, which occurs when front companies collect VAT on traded carbon allowances and then disappear without passing the money on to the tax man, is believed to have cost the German exchequer up to €180m.

Some of Germany’s largest firms, including Deutsche Bank and RWE, were caught up in the raids on Wednesday, although both companies said they were not the focus of the investigation.

Subsequently, a Deutsche Bank spokesman told Reuters that seven of its staff are suspects in the investigation, but he added that the bank remains confident the allegations “can be rebutted”.

The investigation is the latest step in an EU-wide crackdown that has already seen arrests in a number of countries and culminated last month in the EU agreeing new regulations designed to eradicate carousel fraud in the carbon market.

Speaking to BusinessGreen.com in the wake of the raids earlier this week, Henry Derwent, chief executive of the International Emissions Trading Association, urged the authorities to step up efforts to tackle the crime, which has undermined confidence in the carbon market.

“We want to see the appropriate authorities effectively pursuing a fraud that has quite unfairly damaged the perception of the European emissions trading scheme and potentially carbon trading as a whole,” he said.

** – END OF NEWS ARTICLE – **

The good news is that confidence is being undermined and the reputation of the European carbon trading scheme is being damaged. Mr Derwent had to add “unfairly” damaged, but it isn’t unfair, it signals that safeguards were not in place.

Notice how employees of prominent German companies have been tempted (no doubt by money) to become involved.

I didn’t know there was such a body as the International Emissions Trading Association; nice to know our hard-earned tax dollars are being put to good use. Nice to know the money men have a club for themselves already.

Unbelievable.

Vertiginous skyscrapers. Looking up at these behemoths can make you fall over, just as carbon trading can make enterprises fall over. But note that in both cases the clear blue sky remains unmoved and unchanged.