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The Kyoto Scam

The Guardian has an interesting exposé on how the Kyoto Protocol is being used in furtherance of numerous “carbon trading” scams:

The CDM is one of two global markets which have been set up in the wake of the Kyoto climate summit in 1997. Both finally started work in January 2005. Although both were launched with the claim that they would reduce greenhouse gases in the atmosphere, evidence collected by the Guardian suggests that thus far, both markets have earned fortunes for speculators and for some of the companies which produce most greenhouse gases and yet, through a combination of teething troubles and multiple forms of malpractice and possibly fraud, they have delivered little or no benefit for the environment.

While the CDM is run under the umbrella of the UN, the second market is overseen by the European commission. Before launching, it churned through a mass of figures and produced a maximum number of tonnes of carbon dioxide which could be produced by each nation in the scheme; each nation then handed its big corporations and organisations a set number of permits – EU allocations – defining the number of tonnes of carbon dioxide they could produce between January 2005 and December 2007. But they got their sums wrong.

It’s hard to say such fraud is a surprise — the Kyoto Protocols themselves are a scam, as Kyoto-crazy Europe has been failing to meet their Kyoto targets while the United States has been reducing carbon emissions without Kyoto and at a time of robust economic growth. Developing nations like China and Brazil — who are rapidly set to becoming the world’s leading polluters, are exempt from Kyoto’s restrictions.

Carbon markets might work in theory — but any market without transparency and accountability is likely to fail. The current carbon-trading system is rife with fraudsters and a general lack of accountability. Having it be run by unaccountable organization like the UN is only inviting the same gross financial mismanagement that turned the Oil-for-Food Program into the largest financial scandal in human history. Unless there are clear standards in accounting and enforcement mechanisms that ensure those standards are upheld, such scams will continue to proliferate.

The problem is that none of the actors have much incentive to reform the system. Investors are making a killing off these carbon-trading schemes. Politicians get to pretend that they’re doing something about climate change. The UN gets to look proactive and gets their typical cut of the action. Third-world countries get the money that comes from burning old refrigerators and pretending to plant tries. Everybody makes out, except that nothing actually happens other than money changing hands.

If global warming was such a dire threat, this sort of thing would be a global outrage. Yet it’s barely a blip on the radar — and that’s because when it comes right down to it, what counts isn’t actually doing something, it’s pretending to do something — and these carbon-trading “clean development” programs are an excellent way of pretending to do something about climate change without all the hassle of actually doing anything at all.

4 responses to “The Kyoto Scam”

  1. Mark says:

    “It’s hard to say such fraud is a surprise — the Kyoto Protocols themselves are a scam, as Kyoto-crazy Europe has been failing to meet their Kyoto targets while the United States has been reducing carbon emissions without Kyoto and at a time of robust economic growth.”

    Interesting juxtaposition considering America’s GDP is currently flat while Europe is experiencing its highest rate of growth in years.

    “Developing nations like China and Brazil — who are rapidly set to becoming the world’s leading polluters, are exempt from Kyoto’s restrictions.”

    Brazil is the world’s largest polluter? As in world leader in renewable energy Brazil? Doesn’t make a very convincing case for their sugar-based ethanol.

  2. Jay Reding says:

    Interesting juxtaposition considering America’s GDP is currently flat while Europe is experiencing its highest rate of growth in years.

    That’s why you don’t extrapolate from one quarter. US GDP growth was 0.6% in Q1 2007, which is the same as the EU’s growth rate. Last year’s US GDP growth was 3.3% while the EU’s was 2.7%. (And that’s an unweighted average. The Baltics grew at 10%+, which is only due to the fact that they’re still industrializing.)

    Brazil is the world’s largest polluter? As in world leader in renewable energy Brazil? Doesn’t make a very convincing case for their sugar-based ethanol.

    They are a leader in renewable energy, but that’s only slowing their rate of growth. The problem is that the deforestation of the Amazon gets counted against them, which gives them a huge carbon deficit. I’m not totally sold on Brazil’s renewable energy program (growing sugar cane could mean more deforestation), but it’s not an unsound idea.

  3. […] The Kyoto Scam By Jay Reding It’s hard to say such fraud is a surprise — the Kyoto Protocols themselves are a scam, as Kyoto-crazy Europe has been failing to meet their Kyoto targets while the United States has been reducing carbon emissions without Kyoto and at a … […]

  4. Nicholas MacDonald says:

    Actually, no, growing sugar cane wouldn’t *directly* lead to more deforestation; sugar cane is grown in Brazil’s southern plains, not in the Amazon basin. Then again, if land that would otherwise be used for food production is taken up for biofuel production, that could be moot, so it’s a tough call.