By Rowena Mason
Published: 10:27AM GMT 10 Dec 2009
Carbon trading fraudsters may have accounted for up to 90pc of all market activity in some European countries, with criminals pocketing an estimated €5bn (£4.5bn) mainly in Britain, France, Spain, Denmark and Holland, according to Europol, the European law enforcement agency.
The revelation caused embarrassment for European Union negotiators at the Copenhagen climate change summit yesterday, where they have been pushing for an expansion of their system across the globe to penalise heavy emitters of carbon dioxide.
Rob Wainwright, the director of serious crime squad, said large-scale organised criminal activity had “endangered the credibility” of the current carbon trading system.
“We have been talking to Europol over the last weeks,” said one EU senior delegate, after she was asked whether the European Union-run scheme was still viable. “We are making some fixes.”
Yesterday, the UK delegation released a paper calling for the “expansion of carbon markets”, in order to use the profits for a fund to help developing nations tackle climate change.
Suspicions about an unprecedented level of carbon crime over the last 18 months have led investigators to believe criminals are using “missing trader” techniques to buy up carbon credits elsewhere in Europe where there is a cheaper rate of VAT.
Then they sell on the credits in the UK, charging the domestic rate, and pocket the difference. This has been commonplace among trading of very mobile commodities across European borders, such as phones, computer chips and cigarettes.
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In other words, just as critics have maintained, "carbon trading markets" are a fraud, designed to allow certain individuals to personally enrich themselves. What a surprise!