Bishop Hill Uncreditworthy
Nov 8, 2012 Climate: other There is an interesting article on the Financial Times Adviser website on the subject of carbon credits. These worthless bits of paper are apparently being touted as investments and their sale as such is not regulated.
For some perverse reason it appears perfectly legal for a non-regulated firm to set up and promote carbon credit schemes to ordinary members of the public, and do so without the regulator being involved because the sale of carbon credits is not regulated. This is despite the fact that they are promoted as ‘investments’.
And it seems that people are being fleeced of their life savings by crooked carbon credit conmen.
Just more collateral damage in the struggle to "save the planet". Look upon your works ye mighty greens, and despair.
Reader Comments (40)
being green means never having to say sorry...
http://video.au.msn.com/watch/video/the-carbon-cowboy/xtfw2f6
David Nilson either give him a punch in the face or a big wet kiss.
Hes shown the Carbon game up for how ludicrous, unnecessary and corrupt it actually is.
Why couldn't the UN and Nilson just left those tribes people alone to get on with their lives.
Any false market (and that's what trading in a natural component of the atmosphere, vital to our existence is) will draw the criminal element like moths to a flame. It's the law of unintended consequences, something of which the greens are oblivious - like most things in real life.
I'm astonished that anyone would fleece people for such a noble cause! /sarc off
Ok, but this is hardly surprising the Goracle has been at this for years, anyone remember Live Earth? All the money raised went to Gore's charity, the charity that's only aim was to promote the climate change alarmism message; the same charity that Gore baught his carbot credits from to "offset" his mansions.
Yes! It is true, there is NO risk: just a certainty that that they are "worthless bits of paper"!
In the same way, there is no financial risk in playing Monopoly, when playing with Monopoly money rather than real money. That is 'real money', before QE:
http://www.telegraph.co.uk/finance/economics/9662562/Bank-of-England-must-return-interest-levels-to-normal-says-Andrew-Sentance.html
The real con is that these taxes are not called what they are TAXES. The result is that they never get counted as government tax & spending when that is all they are.
Take e.g. the Renewable "obligation" (Renewable tax). It is a tax on electricity companies, who then ... pass the cost straight onto consumers ... with administration charges and profits.
It is no different from taxes on petrol, yet the government get away with this nonsense that it is not public income and spending.
So why don't the wind opposition groups call the renewable taxes taxes?
There's one born every minute.
Never mind. Think how happy the lawyers who specialise in suing financial institutions for mis-selling complex and totally unsuitable products will be!
It's an ill wind that blows nobody any good.
"and do so without the regulator being involved because the sale of carbon credits is not regulated."
There's a reason for this.
Because if the sale of carbon credits was regulated then every airline that sold carbon credits to go with your flight would have to be regulated as an investment adviser. And you've have to send them 15 pages of financial gubbins to be registered to be allowed to buy such an indulgence.
I'm not saying I'm in favour of such offsets: only that this is a decent reason why they are not regulated.
I have some tulip bulbs for sale, if anyone is interested....
This is just another symptom of a deeper problem. The EU Emissions Trading System (ETS) was set up by environmental regulators, who know about biology and chemistry, but less about markets. These and other problems of the EU ETS were predicted, but the warnings were ignored.
Rotten from the core.
Green on the outside, corruption on the inside.
kudos to Hall for drawing attention to the matter. i certainly don't think the elderly gentleman whose story he tells is a "one born every minute" case.
the MSM - especially the financial pundits - usually only critique financial failures in hindsight; meanwhile, in plain sight, a new toxic financial bubble - in this case the CO2 bubble - is being allowed to take shape, right under their noses:
6 Nov: Reuters Point Carbon: Amazon tribe scraps carbon credit deal with
Irish firm
SAO PAULO, Nov 6 (Reuters Point Carbon) - An indigenous community in the
Brazilian Amazon state of Para has cancelled a controversial deal that would
have allowed an Irish company to sell carbon credits from a project to
preserve its forests, said the group's leader and a local prosecutor on
Tuesday.
http://www.pointcarbon.com/news/1.2049556
am not a reuters' subscriber so can't access the rest of the article, and the MSM rarely carries such "bad" CAGW news, but am presuming they're talking about the following, which i've followed for some months:
12 March: Brazilian Indians Sell Amazon Land Rights to Irish Firm
SAO PAULO - The Mundurucu Indians have sold their rights to 23,000 sq.
kilometers (8,880 sq. miles) of land in the Brazilian Amazon to the Irish
company Celestial Green Ventures, one of the world's leading firms in the
world carbon-credits market, the press reported.
The $120 million deal was not approved by the entire tribe and is being
investigated by the government, which questions the validity of the 30-year
contract that bars the indigenous community from legally logging or growing
crops in its territory, the O Estado de Sao Paulo newspaper reported...
Another of the articles questioned in the contract is the company's free
access to indigenous territory, which by law is autonomous in granting or
refusing entry to people outside the community, even including the Brazilian
army.
The National Indian Foundation, or Funai, has 30 similar contracts on record
between indigenous ethnicities and European companies that trade in carbon
credits, a mechanism that compensates for gas emissions by industrial
companies, chiefly in the developed world.
Celestial Green Ventures has 16 projects in the Brazilian Amazon region that
together cover almost 200,000 sq. kilometers (77,220 sq. miles), an area
twice the size of Portugal.
Environment Minister Izabella Teixeira commented that Brazil must make sure
that "opportunities to increase the value of biodiversity are not used to
disguise acts of biopiracy."
The Irish company's representative in Brazil, Ciaran Kelly, said that all
contracts are submitted to a "rigorous process of free, previous and
informed consent on the part of the Indian communities, while respecting
international standards for the regulation of the environment."
http://laht.com/article.asp?ArticleId=477858&CategoryId=14090
some more celestial detail:
15 March: REDD-Monitor.org: Celestial Green Ventures' contracts are "not
valid", says Brazil's National Indian Foundation, FUNAI
Yesterday, Márcio Meira, president of the Brazilian government's National
Indian Foundation (FUNAI), held a press conference at FUNAI's headquarters
in Brazilia. Point Carbon reported that "Brazil's top judge may annul 30
deals that give investors legal title to carbon credits by avoiding
deforestation in the Amazon."
The press conference took place after reports in the Brazilian and
international media about an Irish company called Celestial Green Ventures,
that claims to have the carbon rights to an area of 20 million hectares of
forest in the Brazilian Amazon...
The Brazilian not-for-profit investigative journalism website Pública
interviewed Meira the day before the press conference. In the interview
Meira confirms that FUNAI was not aware of what happened in the meeting
between Celestial Green Ventures and the Munduruku Indians on 12 September
2011. FUNAI was not present at the meeting...
At this point, we have to take a detour, to Florida, where on 12 April 2007,
a company called Pop Starz Publishing Corp. was incorporated. In June 2008,
the company changed its name to Apollo Entertainment Group, Inc. The company's
business was pressing vinyl records and duplicating CDs and DVDs. On 19
October 2009, Manfred H. Wutzer bought 15,950,237 shares (or approximately
95.8%) from Michelle Tucker, who was at that time the company's President,
Chief Executive Officer, sole director and principal shareholder.
Wutzer decided to move the company in a different direction: mining and
reforestation. On 10 December 2009, he changed the company's name to Apollo
Capital Group, Inc. And so we come back to the strange world of Celestial
Green Ventures.
Celestial Investments was a wholly-owned subsidiary of Apollo Capital Group.
The company was established in November 2008 and appears to have done little
for its first year or so. Then, in 2010, Celestial Investments started
selling and marketing carbon credits from Celestial Green's Rondonia
Project. By 31 July 2010, Celestial Investments had secured letters of
intent "for the sale and purchase of 8,600,00 carbon credits on a 'when
issued basis' at a total sales price of $45,150,000 or $5.25 per carbon
credit," according to the filing with the US Security and Exchange
Commission. Celestial Investments would receive a 10% sales fee "as well as
reimbursement of certain out of pocket expenses"...
By the way, Ciaran Kelly, the CEO of Celestial Green Ventures is also
director of Apollo Capital Group. He was a director of Celestial
Investments, until the company was dissolved two days ago. In addition, he
is director of the following companies (there are more, but as far as I can
tell have nothing to do with Kelly's carbon trading activities):...(QUITE A LIST!)
http://www.redd-monitor.org/2012/03/15/celestial-green-ventures-contracts-are-not-valid-says-brazils-national-indian-foundation-funai/
A poorly researched FT piece there.
The writer could start by establishing first of all what sort of "carbon credits" he is talking about. Does he mean EUAs - EU allowances, issued in the EU under the auspices of the EU Emissions Trading Scheme; EUAAs - EU Aviation Allowances, issued likewise but airline-specific; CERs - Certified Emissions Reductions, issued globally by a UN quango further to Kyoto 2007; or ERUs - Emissions Reduction Units, likewise issued by said quango?
They are not all the same as each other. Furthermore, how they are treated from one country to another is not the same.
A carbon permit is a prima facie a licence. However, under - for example - English law, there is no title in a licence. So you can't trade it. It's thus not obviously a financial product at all, any more than a fishing licence, a car's licence plate or a driving licence is a financial product. Yet why were carbon permits created? Why, to be traded, of course!
As they are tradeable they can't be a licence, so they must be something else. What might that be ? Do they physically exist as a piece of paper? Er, no. They are dematerialised, meaning they are just numbers. Your carbon credits account at the carbon registry looks like a bank account, with totals but no banknote numbers. There used to be numbers, but they have stopped telling you what your numbers are, in case you object to receiving the stolen ones. So they look like a financial instrument - but which kind? Are they a security? A bond? Are they like a share?
Nobody knows.
And of course there are 27 countries in the EU, all are signed up to the same lunacy, and all have a different legal slant - if any. If you buy stolen goods in Germany or Holland in good faith and at fair market value, the goods are legally yours, so the loss is suffered by the owner. If you do so in the UK the goods are not legally yours, the owner is entitled to them back and the loss is suffered by you. So if an emissions permit is stolen in the UK and sold in Germany, who has lost? Nobody knows. Nobody knows if these are a good, a security, an equity, a permit, or what, and thus the law governing title is different for each, times 27 countries.
Add in the fact that the locus of the theft may depend on what country the server was in, and you have utter chaos.
So before moaning about why these aren't regulated, the journalist needs to figure out what they are and who therefore should regulate them. Should the FSA have regulatory powers over a certificate issued by the UN? Really? It's not a financial product. It's not necessarily even a UK product. You have no way of knowing where the credits you own originated.
The other point is that all of the above is not an accident, it's intentional. The whole idea behind carbon trading, the reason why all governments everywhere love it, is that they have finally found a way to tax air. If the amount of CO2 emitted is 150 and the target is 100, whoever's emitting the extra 50 has to buy permits to do so. Where do they buy them? From governments, which don't even have to print them. They are just handwaved into being, and the state gets the money. They do nothing for the money, it is not allocated towards any good - it is just grabbed and pissed away.
Government will never regulate this business. They want the price of a permit to be as high as possible because they issue the things and they get the money. It really is that simple. Carbon is not a commodity with value, it is an anti-commodity that carries a tax bill. Governemnts want that tax bill to be as enormous as possible so they can carry on pissing it away.
Mugs queueing up to "invest" their life savings support this. £50,000 blown on carbon supports demand which enriches governments. Why would any of them do anything to stiop this?
The criminality is structural. In China people have set up factories producing huge amounts of HFCs purely in order to then "abate" them by closing the factory and collecting the CERs from the UN. They then sell them and trouser the literally free money. It's a lot like the CAP, where you can make more money via subsidy for not growing something than you could if you grew and sold it.
In sum - no government has any intention of providing regulatory help to people like the mark in that article because the product is a tax not a financial instrument, it probably doesn't originate in the UK anyway, the money robbed accrues to themselves and since the Mafia and the Triads are in like Flynn why shouldn't they be?
The basis for doing this is that 97% of climate scientists agree that we're doomed. This is why there will be no inquiry into Climategate, none into the BBC, none into the mis-selling of a tax as an investment and definitely no tolerance for any suggestion that the "science" might be lies. At this stage, for any government to accept that the whole thing is nonsense is as likely - and as easy - as a fifteenth-century European country unilaterally declaring that God doesn't exist - and for the same reasons.
Since there is nobody you can vote for who will change this, I agree with the analysis that says we are now in a post-democratic age. On issues like selective education, capital punishment, law and order, the level of taxation, EU membership, and climate change, a large tranche of the public thinks 180 degrees differently to the government. But that tranche cannot replace that government by voting for another that better reflects their views, because none does; all the parties have agreed not to do so. It seems clear that we are stuck with the tax and the corruption for ever.
If you want a picture of the future, imagine Michael Mann's boot stamping on a human face — forever.
It is my contention that the only reason that AGW has been promoted by the corporate media like the Guardian and the BBC is that carbon trading was projected to be a massive global industry centred on London. That is why we have been landed with all the useless wind turbines.
London's financial centre is the main home to the incipient global carbon market. Prof Heal believes that in a decade, the trade could be worth trillions of dollars.
http://news.bbc.co.uk/1/hi/business/8359397.stm
The two big American carbon trading centres failed and that may well be the reason why they haven't signed to any climate deals or even mentioned AGW in the election. In my view, it is game over in the USA.
Chicago Climate Exchange.
Lost in the hubbub leading up to the Republican and Tea Party tsunami on Nov. 2 was the collapse of the Chicago Climate Exchange (CCX). It is an acknowledgment that both the case for climate trade and cap-and-tax legislation has also collapsed.
http://news.investors.com/ibd-editorials/110910-553236-the-crash-of-the-climate-exchange.htm?p=full
The Obama administration just cancelled California carbon-cap-and-trade:
http://www.ferc.gov/about/com-mem/moeller/moeller-08-06-12.pdf
We need to distinguish between VERs (voluntary emisssion reductions) and CERs (certified emission reductions). One is a worthless piece of paper and the other is a worthless piece of paper certified by the UN.
ja=e
Justice4Rinka
Interesting comments with a lot of truth in them. If you want a slightly more optimistic slant, I recommend Douglas Carswell's book - The End of Politics, one of the most honest and courageous books by a politician I have read.
J4R, 10:24
Thank you, great post.
I just hope Carbon Trading goes the way of the South Sea Bubble and the Groundnut Scheme.
The other thing to bear in mind is that carbon is not a properly-conceived, naturally arising market. The underlying supply is determined by government cartel, and like all cartels, governments want the price high.
The price is paid by everyone else, who logically want the price to be low.
Why would you invest in something whose value is controlled by the state?
Watch out folks, Obama is planning to introduce a carbon tax in the US. Exactly what Al Gore and the EU have been hoping and praying for. Once US has a carbon tax in place, there will be no way to stop carbon trading around the world, even though we know it is a scam based on the CAGW lie. Carbon trading will shortly be followed by an unelected UN bureaucracy imposing "eco-laws"--at this point, say goodbye to freedom and prosperity.
Can't understand it. Obama is leading Americans like lemmings over a cliff, yet they voted him in again. Gobsmacking.
"Once US has a carbon tax in place, there will be no way to stop carbon trading around the world,"
That doesn't make sense. A carbon tax is an alternative to carbon trading. Carbon trading under a cap and trade system is an alternative to a carbon tax.
You need one or the other. So a carbon tax in the US (something I've long advocated, as have such respectable economists like Greg Mankiw and William Nordhaus, even Richard Tol has been known sto say nice things about it at the right level) makes carbon trading less, not more, likely.
Joe (is that McCarthy ?)
Prove to us that Obama is planning to introduce a carbon tax in the US.
Is this before he introduces communist prison camps for everyone who voted for Romney ?
Justice4Rinka
"The whole idea behind carbon trading, the reason why all governments everywhere love it, is that they have finally found a way to tax air."
That is completely wrong. The scam is that big business gets the carbon credits for free so that we, the individuals have to pay for 100% of the AGW trillions. In fact there is systematic abuse like below.
Carbon credits bring Lakshmi Mittal £1bn bonanza
LAKSHMI MITTAL, Britain’s richest man, stands to benefit from a £1 billion windfall from a European scheme to curb global warming. His company ArcelorMittal, the steel business where he is chairman and chief executive, will make the gain on “carbon credits” given to it under the European emissions trading scheme (ETS).
The scheme grants companies permits to emit CO2 up to a specified “cap”. Beyond this they must buy extra permits. An investigation has revealed that ArcelorMittal has been given far more carbon permits than it needs. It has the largest allocation of any organisation in Europe
http://business.timesonline.co.uk/tol/business/industry_sectors/industrials/article6945991.ece
Tim Worstall
Why on earth would you advocate a carbon tax if you don't believe in AGW (assuming that is why you are here). ?
Roy said "Think how happy the lawyers who specialise in suing financial institutions for mis-selling complex and totally unsuitable products will be!"
Oh no.... that will just lead to a repeat of the PPI miss-selling scandal, with endless junk texts from companies claiming to know all about loans I never took out..
@ eSmiff
The credits are only worth something because others are forced to buy them.
Regardless of who gets them for free the cost will be passed to end-users and the proceeds will accrue to governments. Because what's being taxed is air, you cannot avoid the tax by changing your behaviour. It also will not be counted as a tax because it will be hidden in your utility bills and in the increased price of everything.
I've made the comparison before, but income tax was introduced into the UK to pay for waging the war against Napoleonic France. Those ended 197 years ago but the tax is still here, bigger than ever.
Carbon, same thing.
A market based upon the non-delivery of a non-good.
What could go wrong?
Justice4Rinka
Governments hand out carbon credits for free. No money will go to the government . It is not a tax. The profits will be made by big business in the carbon markets. This is an Enron originated scam. Roger Pielke had a great story about the biggest coal mine in Africa getting huge sums in free carbon credits.
These are the guys who will make the money. The oil companies and banks.
International Emissions Trading Association (IETA)
BP, Conoco Philips, Shell, E.ON, EDF , Gazprom, Barclays, JP Morgan Chase, Morgan Stanley.. Goldman Sachs.
http://www.ieta.org/ieta/www/pages/index.php?IdSiteTree=1249
This is the way it was meant to work. Shell was given huge amounts of free carbon credits. As they moved to renewables or improved efficiency, which they did with turbines, they could sell their carbon credits to new start companies that didn't share in the original bonanza or those expanding .
http://www.shell.com/home/content/shipping_trading/environmental_trading_solutions/solutions/why_shell_energy/
@ eSmiff
You need to catch up with the facts.
The first Phase 3 auctions begin in less than 2 weeks' time.
http://www.decc.gov.uk/en/content/cms/emissions/eu_ets/phase_iii/phase_iii.aspx
Gee, people give you money and you give them a piece of paper promising to do something undefined at some unspecified point in the future which will reverse the bad effects whatever they wanted to do.
Of COURSE it's a scam. Jeeze.
The aim of carbon trading or carbon taxes is to provide government revenue, profits for those who put politicians into power and is the most regressive tax ever on the poor.
The latter is directly from Agenda 21, to force the poor into state supported and housed poverty in Stalinist inner city housing blocks, gradually to die off early to reduce population.
Justice4Rinka
"The first Phase 3 auctions begin in less than 2 weeks' time. "
You will of course be able to tell us what the Phase 3 auctions are.
eSmiff - from the DECC link:
"There is a non-legally binding commitment from EU member states to spend at least half of the revenues from auctioning to tackle climate change both in the EU and in developing countries."
You are right that industry has been given freebies but that does not mean Governments are not intending to raise money too. If the interest was in tackling climate change then I think it would be reasonable for the above clause to be a legally binding requirement that 100% of monies raised should be spent on that objective.
J4R - Do you think that anything will prevent this ridiculous business proceeding? For example, I wonder if a principled stand by scientists emerged which stated that the CO2 induced climate change hypothesis was too weak to support such dramatic policy action would anything change?
Saddest part of all
These Amazon tribes have been with living happily in harmony with nature for thousands of years.
Live the most sustainable lives of anyone on the planet.
Have the lowest Carbon footprints of anyone on the planets
Yet they are the easiest gullible mugs that come off worse from good intentioned Environmentalist meddling.
Most ironic its Logging companies that finally Benefit from Carbon Credits.Paying a little extra to destroy the Rainforests with a clear conscience.
The Carbonised Industrialized world is not throwing their money at these worthless bits of paper.
@ not banned yet
No, I think it's no more likely to be unravelled now than income tax is likely to be abolished because we have defeated Napoleon.
@ eSmiff: the announcement of the appointment of ICE to operate the UK auction can be found here:
http://www.decc.gov.uk/en/content/cms/news/pn12_048/pn12_048.aspx
The ICE contract specs for the Phase 3 emissions contracts can be found here: https://www.theice.com/publicdocs/circulars/12155%20attach%205.pdf
Was there anything else you needed to know? Emissions indulgences have previously been largely given away, but henceforth are to mainly auctioned. The government has a stake in the price being as high as possible and therefore has an interest in hapless mugs buying them as an "investment" as this helps support the price.
You seem angry about Shell. Does Shell have any positions in the emissions market? How do you know?
"and do so without the regulator being involved because the sale of carbon credits is not regulated."
There's a reason for this.
Because if the sale of carbon credits was regulated then every airline that sold carbon credits to go with your flight would have to be regulated as an investment adviser. And you've have to send them 15 pages of financial gubbins to be registered to be allowed to buy such an indulgence.
I'm not saying I'm in favour of such offsets: only that this is a decent reason why they are not regulated.
Nov 8, 2012 at 9:29 AM | Tim Worstall
................................
Hi Tim
Certainly you pose an interesting point. But as an IFA (who sent the link to the Bish) of many years standing and one that welcomes proper and effective regulation (or at least I would if we had it - as the FSA has for years been found to be perpetually asleep at the wheel - Equitable life, Split caps, Iclandic banks, Northern Rock and the rest of the banks deemed too big to fail so sod the consumer rather than protect them)
So my thoughts on this is that how can an investment be an investment that is not regulated in the UK.
Because when a Company or an organisation buys an investment caveat emptor applies - the Regulator expects the Company or Organisation to carry out its own due diligence. We saw this where local Authorities in the UK placed funds with Icelandic Banks - whilst individuals were protected in part by the UK FSCS (Financial Services Compensation Scheme), Corporate Investors were not.
So I would suggest that your reasoning is flawed - If individuals are being targeted as indicated in this article - it means that the FSA and its normal regulation has been specifically sidelined for Carbon Credits.
I am deeply concerned that the regulations book has been thrown out the window here. I can almost stomach the incompetence of a Government Agency that is the FSA that has seen so many debacles - but to see a whole tranche of "green investment" being given the nod and the wink so that the normal regulations do not apply is something else - and it smells.
Justice4Rinka
Thanks !!
My brain melted at the thought of going through government regulations. It is nonsensical to give trillions of dollars away then start charging. I assumed that wouldn't happen. My understanding was that credits have virtually no value at present anyway thanks to the recession. Monbiot told me that in a Guardian thread. They got me with their madness.
cheers
E