EXCLUSIVE: Exposing the carbon credit scam

The average person has little idea what a "carbon credit" is. And that's just the way the politicos and speculators would like to keep it, because (surprise!) what average people don't know is that the entire carbon credit market is being used to enrich the wealthy at the expense of the poor. 

LOS ANGELES, CA (Catholic Online) - A carbon credit is a license to pollute. Industries that emit carbon into the atmosphere, which is the leading human contributor of global warming, must pay money per ton of carbon emitted. The money has a purpose.

First, it raises the costs of polluting, so that industry has a financial incentive to minimize pollution. Second, the money can be used to do anything that reduces future emissions, such as fund research programs, technological improvements, or to "help people" to adopt low emission practices. 

It's in that vague and murky world of "helping people," where the speculators make their fortunes.

Carbon credits are a commodity, much like any other. They are both and sold and exchanged. Dirty industries must buy them, and clean industries can sell them. They can also be "created." 
A company creates a carbon credit by reducing carbon emissions. One way to do this involves the third world. In countries where outdated farming practices such as slash-and-burn take place, a company can pay a farmer a few dollars to pass on burning part of the forest.

Or to plant crops that will remove carbon from the atmosphere. In doing this, an institution (government or business) can claim that they "created" carbon credits. And if the claim is granted, then those credits become the property of the company that created them. They can then use them to emit carbon or sell them for cash. How much cash? At least enough that there are entire companies devoted to "verifying" carbon credits. 

A single carbon credit isn't worth a fortune. For example, most credits may be exchanged for somewhere between $3 and $20. An example: A company sponsors a girl's school in the third world. Girls attend school instead of gathering wood for burning. The wood that isn't burned is worth so many credits. The school gets a few dollars and the company, or the speculators, can pocket the change. Which on the corporate level can come to billions.

In 2007, the CO2 market was worth over $60 billion. It would be interesting to know how much of that money went to the third-world, but the numbers don't exist. No matter, they would merely be an embarrassing footnote. 

The idea is that the corporate world supports third world development, but that isn't what usually happens.  For the investment of tens of billions per year, we should see better farming practices, food stability, and a higher standard of living, but we see none of that, anywhere. What is happening is speculators are getting rich, and companies are still pumping CO2 into the atmosphere, the climate is warming and life is getting worse, especially for the poor. 

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Corrupt governments and speculators have discovered that it's cheaper to cheat the third-world poor and trade credits on the world market than to actually lower their emissions. Some of the third world emissions are in fact being reduced, but it isn't cleaning the air in the industrial countries which is what these plans were supposed to do in the first place. So much for the climate benefits. And those third world reductions are actually quite small. A factory has a lot more polluting potential than a schoolgirl.

The poor are cheated because bankers pay them as little as they can to persuade them to engage in the carbon-saving behavior. The several dollars that ought to go to the students or the farmers turn into pennies, and the speculators pocket the difference. Also, the practice of creating the credits isn't well standardized or regulated, so a lot of the credits are literally pulled from thin air. 

Ultimately, the third-world poor are being shortchanged. Worse, since the exchange of carbon credits isn't actually reducing emissions, climate change continues unabated. It's the countries of the third world, such as those in the horn of Africa that suffer famine and drought and desertification of their lands. They die while the rich get richer. 

The free market can be a tremendous force for good, but sometimes that market is hijacked by people whose ambition is solely greed, and without regard for (and often at the expense of) the world's most vulnerable people. When that happens, we have a moral responsibility to speak out, and act. Unfortunately, we cannot count on the politicos or speculators to address the problem which they themselves have quite cleverly created.

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