The Fraud of Carbon Trading

Last year National rammed through amendments to Labour’s harebrained carbon trading scheme so that John Key could wave a piece of paper at Carbonhagen to say that New Zealand was doing its bit in the “fight against Global Warming”.

Since, of course the Northern Hemisphere has been buried under mountains of snow. my brother in Seoul reports that the snow is still piling up.

Also in the Northern Hemisphere people are waking up to the fraud that is Carbon Trading. In France even the cheese eating surrender monkeys have worked it out. The new French carbon tax was scheduled to go into law on Jan 1, 2010. The tax was 17 euros per ton of carbon dioxide (USD $24.40).? In a stunning move the tax has been found unconstitutional and thrown out.

In France, if at least 60 Deputies of the House and 60 Senators appeal to the Constitutional Council, it has the power to pronounce on the constitutionality of a proposed law ? in the present case, the 2010 national budget of France, which contained enabling provisions (loi deferee) for a carbon levy. The Council found that these enabling provisions were unconstitutional on two grounds: that the exemptions contained within the provisions for a carbon levy vitiated the primary declared purpose of the levy, to combat carbon emissions and hence ?global warming?; and that the exemptions would cause the levy to fall disproportionately on gasoline and heating oils and not on other carbon emissions, thereby breaching the principle that taxation should be evenly and fairly borne.

But there is even more to Carbon Trading as the British are discovering. A phenomenon known as “Carousel Fraud“.

It is a building site, formerly a derelict car park, in a deprived part of West London, where the neon glow of curry houses and late-night grocery stores could not be further from the wealth and glamour of London’s financial markets.

Described as a “consulting” business, this is the address of a UK company that has signed up to trade carbon permits under the European Emissions Trading Scheme in Copenhagen. But there is no trace of its existence on the Companies House database.

At the newsagent next door, nobody has ever even heard of emissions trading ? the system where companies buy and sell the right to emit carbon dioxide ? and there has not been a building there for many years.

Do you see the irony that the frauds are largely being perpetrated through the Danish Carbon Registry in Carbonhagen. The Telegraph notes that;

all the big? players that are obligated to be listed on the Exchange such as Oil companies, Power generators, other utilities and heavy industry? are far outnumbered by hundreds of UK companies selling anything from hair loss treatments to electronics have mysteriously registered to buy and sell carbon permits in the Scandinavian nation ? mostly in the last 18 months.

According to sources, the Danish registry may be at the heart of Europe’s problems with carbon trading fraud. Local media has repeatedly raised the fact that few, if any, checks are done on new traders and approval can be much quicker than in other countries.

Criminals profit by importing goods VAT-free, selling them through a series of companies, each liable to VAT, before exporting them again. Then, the first link in the chain often goes missing without accounting for the VAT and the final link reclaims the VAT it has paid from the state before disappearing.

It might sound like the tinpot scheme of local small-time crooks, but fleecing the tax man can bring in big money.

It has become so bad that just before the Carbonhagen talk-fest Denmark suspended VAT on Carbon.

“It is estimated that in some countries, up to 90pc of the whole market volume was caused by fraudulent activities,” Europol said.

How big is that, 90% sounds largish but if it off of a small base then not much in actual monetary amounts? Well is it is actually huge. Criminals mainly from Britain, France, Spain, Denmark and Holland pocketing an estimated ?5bn (?4.5bn). That’s billion folks. It ain’t small change and if you put that into perspective, Obama pledged $100 billion USD and the UN is run on just $4 billion USD.

I wonder if Nick “Quota” Smith has worked out how to stop the fraud here? Fraud on top of a fraud. It isn’t as if Carousel Fraud is unknown.

Carousel fraud has been a known scam for years among mobile commodities, such as phones, computer chips and cigarettes.

But the attraction of carbon permits is their intangible nature, so there is no need physically to ship goods across borders. All is done at the click of a mouse.

That is the real fraud. Trading has been commenced in an intangible product that no-one sees, no-one touches, and no-one knows the value of. I’ll tel you what the value of these pieces of electronic paper are worth. Precisely nothing. Carbon Trading Trading breaches the immutable rules of money that from nothing comes nothing. Carbon Trading is literally trading in thin air. As soon as the great unwashed work that out the bubble will burst just like every other Ponzi scheme ever created.

The sad thing is that Carbon Trading will not do the very thing it was set up to supposedly do. That is halt global warming. It was set up as a fraud, to perpetrate a fraud by the very people that caused the financial markets to collapse so spectacularly in the past 18 months. They will do it again and this time the hurt will be worse because from nothing comes nothing.

Any trading that isn’t asset backed by real tangible assets is actually a fraud. Carbon Trading is a fraud and Nick “Quota” Smith has perpetrated that fraud upon New Zealand.