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Carbon Trading At Increased Risk Of Criminal Exploitation: Interpol

Created on August 5, 2013 at 08:39 Carbon trading at increased risk of criminal exploitation: Interpol Tribune Desk Business The Interpol Guide to Carbon Trading Crime examines the areas within the industry which have the potential to be manipulated by criminals The intangible nature of the global carbon trading markets puts them at risk for exploitation by criminal networks, according to a new law enforcement guide produced by Interpol. The Interpol Guide to Carbon Trading Crime examines the areas within the industry which have the potential to be manipulated by criminals, through securities fraud, insider trading, embezzlement, money laundering and cybercrime. It also assesses the current vulnerabilities of the carbon market and provides information to support national authorities in establishing adequate policing measures, according to an Interpol press release. Carbon trading is the world’s fastest growing commodities market, with its current value estimated by the World Bank at around USD 176 billion. Differing from traditional markets in that there are no physical commodities, only “credits” for offsetting the output of carbon dioxide, it is this unquantifiable market combined with the large amounts of money invested and a lack of oversight which make it vulnerable to criminal activity. “It is imperative that the carbon trading markets remain secure from fraud, not just to protect financial investment, but also because the global environment depends upon it,” said Andrew Lauterback, Senior Criminal Enforcement Counsel at the US Environmental Protection Agency and Chair of the Interpol Environmental Crime Committee . “The Interpol Guide to Carbon Trading Crime is an important resource for all organizations and agencies committed to protecting our environment and developing a cohesive global response to this crime,” concluded Lauterback. An initiative of the Interpol Pollution Crime Working Group, the Interpol carbon trading guide was produced with contributions from partners including Environment Canada, the Norwegian Agency for Development Cooperation, the Netherlands Government and the US Environmental Protection Agency. The Pollution Crime Working Group will hold its 18th meeting during the Interpol Environmental Compliance and Enforcement Events in Nairobi, Kenya from 4 to 8 November 2013. The guide includes several case studies from around the world where greenhouse gas accounting firms, national authorities operating in under-regulated jurisdictions, and individuals or companies claiming to offset emissions in return for investment have cut corners, falsified information or received bribes. “Crimes that harm our environment have a wider impact on the health and safety of society as a whole, and therefore must be investigated and the perpetrators punished,” said Interpol Secretary General Ronald K Noble. “Interpol will continue to fight the criminal networks which endanger our precious environmental resources and use their ill-gotten proceeds to fund other criminal activities,” concluded the Interpol chief. With eight carbon credit trading companies operating on the European Union Emission Trading Scheme recently shut down for malpractice, the Interpol guide seeks to generate an international law enforcement response to these crimes. “It is sad to see criminals using fraud and other crimes to make profit out of a commodity that was created to protect the environment. It is not just the financial harm it causes investors, but this criminal activity risks seriously undermining the environmental integrity of the carbon markets globally,” said David Higgins, Manager of Interpol’s Environmental Crime Programme. “Interpol is supporting governments which are in the process of establishing or regulating the carbon markets to put an end to these types of crimes,” he added. Interpol also assists law enforcement agencies in policing the carbon market across borders and jurisdictions, in particular by identifying inconsistent regulations between countries and other legal loopholes which can be exploited by criminals.   Continue reading →

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Carbon Drops to Two-Week Low as Weak Power Price Saps Demand

By Alessandro Vitelli – Jul 31, 2013 European Union carbon permits for December dropped the most in three weeks as record-low power prices in Germany reduced demand for emission allowances. The benchmark carbon contract fell as much as 4 percent to 4.12 euros ($5.49) a metric ton on ICE Futures Europe exchange, and traded at 4.13 euros at 12:47 p.m. in London . The contract is heading for its first monthly decline since April after dropping 1.7 percent this month. Solar and wind generation in Germany jumped 80 percent over the past three years, flooding the grid with cheap, emission-free power as the region’s sluggish economic expansion curbs electricity use. Carbon permits can track power prices, which include the cost of emissions allowances. “We forecast negative power demand across Europe, on a combination of lackluster economic growth, ongoing de-industrialization and energy efficiency,” Patrick Hummel, an analyst at UBS AG in Zurich, said today in an e-mailed note. Carbon permits fell yesterday for the first time in twelve days, reversing some of this month’s gains stemming from the prospect of a reduced supply of allowances in August. The EU, Germany and the U.K. are cutting auction volumes by 56 percent next month compared with July to reflect reduced trading in Europe’s traditional summer holiday season. Europe’s carbon trading system imposes emissions caps on about 12,000 power plants and factories, which must surrender tradable allowances to cover their discharges of carbon dioxide or pay fines. German 2014 electricity declined as much as 1.1 percent to 36.55 euros a megawatt-hour, the lowest since the contract began trading in January 2010, according to broker data compiled by Bloomberg. To contact the reporter on this story: Alessandro Vitelli in London at avitelli1@bloomberg.net To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net Continue reading →

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DECC Scientist Takes Green Groups’ To Task Over Biomass Claims

Greenpeace, Friends of the Earth and RSPB under fire from government for using unfinished research to campaign against carbon impact of biomass power By Jessica Shankleman 01 Aug 2013 Tension between the government and green groups over the environmental impact of biomass has cranked up a notch, after it emerged DECC’s chief scientist has written to three of the UK’s leading NGOs to criticise their publication of unfinished research as part of their campaign against biomass subsidies. Earlier this year, Greenpeace, RSBP, and Friends of the Earth (FoE) unveiled a factsheet claiming biomass generation in some instances produces more emissions than burning coal. Under the government’s current plans biomass energy will have to show lifecycle reduction in emissions of at least 60 per cent compared to emissions of the EU fossil fuel grid average, such as cutting down trees and transporting fuel. The government is expected to confirm the new sustainability standards for biomass this month, with the rules likely to come into effect next year. But green groups fear the new standard will not fully take account of the full lifecycle emissions associated with growing, harvesting and distributing biomass for fuel and have been lobbying for stricter sustainability standards on generators . They believe rising subsidies could cause a huge surge in demand for the UK’s forestry harvest over the next four years, potentially having an adverse impact on biodiversity and leading to greater reliance on imported biomass. The RSPB, Greenpeace and FoE factsheet Burning Wood for Power Generation , revealed preliminary findings of a nine-month research project by David Mackay, DECC’s chief scientific adviser, that was presented to them at a stakeholder meeting in March. Unlike Ofgem’s current carbon calculator, MacKay’s calculator includes the net reduction in the carbon stock caused by the removal of timber from forests, and the indirect emissions of burning biomass that would have been avoided if it had been used for other industries, such as construction. Mackay’s initial findings showed the carbon impact of biomass rises significantly when these two sources of emissions are taken into account. The preliminary results suggested biomass generation produces more emissions than burning coal in five scenarios of the 12 scenarios considered. The factsheet prompted an angry response from the biomass industry with the Renewable Energy Association’s Gaynor Hartnell accusing the NGOs of using “half baked” arguments to scaremonger the public about the impact of the sector. However, BusinessGreen has learnt the publication also drew criticism from MacKay, who accused the three NGOs of exploiting the “open and collaborative” approach to research at the department. A letter , released under freedom of information request, was sent to Rose Dickinson, parliamentary officer for RSPB, Mike Childs, head of policy, research and science for Friends of the Earth and Doug Parr, chief scientist of Greenpeace, on May 15th criticising the decision to publish data from the draft report. In the letter MacKay said he was both “surprised and disappointed” that the factsheet quoted his draft findings. Mackay said the NGOs had been told the calculator his team developed, known as the the Bioenergy Emissions and Counterfactual (BEaC) calculator, was not intended for public circulation until its final launch – originally expected this summer but since delayed to the Autumn. “I acknowledge that the factsheet describes BEaC as a prototype and the results as preliminary; but I don’t think using the material in this context without specific permissions accords with the spirit in which we shared the model with the reviewers,” he wrote. “I wish to continue an open and constructive relationship with all of DECC’s stakeholders and I would like to urge you to treat unfinished analysis and material shared for review with more care in future,” he concluded. All three NGOs have since told BusinessGreen they published the data in good faith, believing they had permission from DECC to share the information so long as it was made clear it was not the final version. They also all said they removed the BEaC information from their websites after receiving MacKay’s letter. Harry Huyton, head of climate change for the RSPB, defended its decision to publish, arguing DECC should be more transparent around its thinking on biomass. “The bigger point is that the [BEaC draft] findings were consistent with major research by the European Commission’s Joint Research Centre so we didn’t see it as controversial,” he said. “But we did see it as important and in the public interest for people to understand what this tool was showing.” Huyton also raised concerns that the government has delayed the final publication of the BEaC to Autumn, despite previously promising to published in the summer. He urged the government to include the findings of the BEaC in its final sustainability standard when it comes out this month. “We need an open public debate about impact of biomass and that’s in the interest of the industry as much as ours,” he said. “Otherwise, the risk is we repeat what we’ve seen in biofuels sector where denial of indirect impacts has mean that even now many years down the line we’re still having a big debate about how to get emissions right. We should get it right from the outset.” Childs similarly argued the preliminary findings were important for the future of the industry. “The draft results were very interesting – they showed that burning whole trees compared to trimmings was bad news for the climate,” he said. ” The companies involved in the industry may need to change their practices to make them sustainable.” Greenpeace’s Parr added that many other countries would be looking at the UK’s standards as a template and it was therefore crucial the government got it right first time. “We urgently need the best available science informing standards at UK and EU level given the reliance on bioenergy to reach renewable targets,” he added. However, a spokesman for the government maintained it was committed to supporting only sustainably produced bioenergy, which delivers “real” greenhouse gas savings, is cost effective, takes account of wider impacts across the economy, and manages possible risks such as adverse effects on food security and biodiversity. “We are developing a model BEaC to investigate the carbon impacts of different bioenergy feedstocks and help ensure we have robust evidence behind our bioenergy policies,” he said. “A preliminary version of the tool has been discussed with stakeholders, however, the tool is under development and is subject to review.” He added that the draft version of the model should not yet be used to draw firm conclusions. Paul Thompson, head of policy for the REA, said the letter highlighted the need for all sides of the debate to treat complex information on the environmental impact of biomass sensitively. “This letter confirms that certain groups have misused data from the Calculator, which was in draft form and not intended for public use, to support pre-existing positions,” he said. “It is important to be more careful in the treatment of these sensitive issues and data in order to advance the rational debate that we need on biomass sustainability. “We look forward to working with NGOs and the Government on implementing the forthcoming RO Sustainability Criteria in order to ensure high carbon savings and ecologically sustainable forestry practices.” Continue reading →

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