Think tank europe

Fraud and corruption in international climate markets: time for a rethink?
02/05/2011
Author : Friends of Europe (FoE - Belgium)
Op-ed by Willy De Backer, Head of the Greening Europe Forum at Friends of Europe
 
Are market-based solutions to climate change really cheaper and more effective than command-and-control? If one looks at the amount of fraud and corruption in the carbon market, one might want to rethink one of the basic tenets of global climate policy.

The new report “Global Corruption: Climate Change” published by Transparency International (TI) on Saturday 30 April explores the dark side of global carbon markets and recommends better oversight and transparent control if this market is to deliver its objective of reducing greenhouse gas emissions and pushing governments, industries and consumer towards greener, low-carbon choices.

Since its start in 2005, Europe’s Emission Trading Scheme (ETS) has seen several cases of fraud with the most recent one having led to a closure of the spot market trading after computer hackers managed to steal around 30 million euros worth of emissions allowances from member states’ registries. Similarly, international schemes to offset carbon emissions such as the Clean Development Mechanism have also been prone to corruption and fraud cases.

The Transparency International report is not the first one to highlight these problems. In the past there have been studies by PricewaterhouseCoopers (PwC) and Friends of the Earth revealing the same market challenges.

The illegal practices mentioned in the TI report are not the only concerns raised against the carbon markets. There have also been several reports indicating that big energy-intensive companies are reaping excessive profits from the legal loopholes in the global climate trading regime.

Maybe it is just a bad idea to try to use market mechanisms to deal with the “biggest market failure of our time”?
 
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Thursday, 24 May 2012
Europe's World - AUTUMN 2011 - #19
The Spring 2012 issue of Europe's World is out!

We feel it's fair to say that few if any publications in the field of international relations and policy debate have grown as fast or widened their scope so remarkably as Europe's World.

Our 100,000 readers worldwide are drawn from politics, government, business, the media, universities and NGOs.
 
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