A round up of the week’s news on REDD, in chronological order with short extracts (click on the title for the full article). REDD-Monitor’s news page is updated regularly. For past REDD in the news posts, click here.
By Lubis Ganie Surowidjojo, The Legal 500, April 2013 | Several efforts have been undertaken by the REDD+ Task Force to improve forestry and peat land governance and to implement REDD+ in Indonesia. Among the activities conducted by the REDD+ Task Force are (1) License Due Diligence (logging, plantation and mining licenses) and (2) Acceleration of Forest Inventorying in Central Kalimantan. License Due Diligence is intended to provide better license governance and to improve regulations on logging, plantation and mining licenses. The inventorying is intended to determine forest area in Central Kalimantan. Until now, the determination of the forest area in Central Kalimantan not complete due to conflicting provisions between the Provincial Spatial Plan issued by the Provincial Government and TGHK of Central Kalimantan issued by the Minister of Forestry. All of these activities are related to the effort to create "One Map" as a single reference to issue licenses in forest and peat land…
By Lauren Goers Williams, World Resources Institute, April 2013 | This working paper presents positive trends and overarching gaps in how countries designing programs to reduce emissions from deforestation and forest degradation (REDD+) are proposing to address governance challenges. It can serve as a starting point to help governments, donors, and civil society groups identify where additional analysis, financial support, and capacity-building are needed to build effective REDD+ strategies, systems, and institutions.
15 April 2013
By Mićo Tatalović, Asian Scientist, 15 April 2013 | The five BRICS countries agreed to set up a development bank at a recent forum attended by science ministers in Durban, South Africa, last month (March 26-27). According to media reports, the bank is expected to start with US$50 billion in total – US$10 billion from each BRICS country: Brazil, Russia, India, China, and South Africa – and will fund development and infrastructure projects in developing countries.
By Mark Tran, The Guardian, 15 April 2013 | The question, as ever, is whether these communities can sustain themselves, once funding for the project stops. Funding of €5.4m (£4.6m) from Ireland, Norway and the Netherlands ended in December, although Norway has extended funding of €2m for another three years. With the help of Oxford University, Farm Africa is designing a scheme for Bale to tap into the UN’s Redd+ (Reducing Emissions from Deforestation and Forest Degradation) plan to raise money through carbon credits. According to Redd+, global deforestation accounts for nearly 20% of all CO2 emissions. Under the Redd scheme – proposed by Papua New Guinea and others in 2005 – developing countries are paid for protecting their forests. In preserving the forests of Bale, Tadesse estimates that the PFM scheme could produce 80m tonnes of tradable carbon over the next 20 years. A carbon credit currently sells for $5 a tonne.
Survival International, 15 April 2013 | Three independent reports have warned that the controversial Gibe III dam, and land grabs for plantations, risk imminent ‘catastrophe’ in Ethiopia’s Lower Omo Valley. Half a million tribal people in Ethiopia and Kenya stand to be overwhelmed by these projects, whose immediate suspension Survival International has demanded. Lake Turkana and the Lower Omo – Hydrological Impacts of Major Dam and Irrigation Projects published by the Africa Studies Centre at Oxford University predicts the Ethiopian government’s Kuraz Sugar Project alone will cause Lake Turkana, the world’s largest desert lake, to drop by up to 22 meters. Much of the lake’s aquatic life will be destroyed, including fish stocks vital to the Turkana and other peoples living by the lake. Bodi, Kwegu and Mursi tribespeople are now being forcibly evicted for the Kuraz project and moved into resettlement areas.
By Brian Fallow, NZ Herald News, 15 April 2013 | Deforestation intentions have soared as the emissions trading scheme, at least at current rock-bottom prices, is no longer seen as a barrier to switching to other land uses. A survey of large forest owners (with over 10,000ha) by Professor Bruce Manley of Canterbury University has found they intend to deforest 39,000ha between now and 2020, mainly in the central North Island and mainly to switch to dairy farming. They represent three-quarters of the plantation forests with trees older than 20 years, which are likely to be harvested within the next eight years. Assuming smaller forest owners only replant 80 per cent of the forests they harvest in the same period, the total area deforested would be 55,000ha or 12 per cent of the area of plantation forest maturing in that period.
By John Parnell, RTCC – Climate change news, 15 April 2013 | The UK Government has announced it will join a business-led initiative to tackle deforestation, a major source of greenhouse gas emissions. The Tropical Forests Alliance 2020 (TFA 2020), which helps businesses cut their impact on forests, was established in 2012 by the US government and the Consumer Goods Forum (CGF), a group of 400 retailers and manufacturers which collectively have annual sales in excess of US$ 3 trillion. Between 2000 and 2010 there was a net loss of forests of 5.2 million hectares a year, according to the UN’s Food and Agriculture Organisation (FAO). The TFA 2020 project looks to shift supplies of palm oil, beef, soy and other commodities away from unsustainable sources in effort to cut this figure.
By Brendon Bosworth, High Country News, 15 April 2013 | While its overall impact on U.S. emissions won’t be major, the California experiment makes several improvements to existing cap-and-trade strategies. It covers more sources of pollution than the five-year-old Regional Greenhouse Gas Initiative in the Northeastern U.S., which applies only to power plants. The European Union started the world’s largest carbon cap-and-trade program in 2005, but it had a significant flaw: the initial stage of the program gave away too many free credits, resulting in some power companies raking in windfall profits by raising electricity prices even though they didn’t have to pay for their allowances. It also contributed to low prices for carbon allowances, which provides scant incentive to cut emissions.
16 April 2013
By Bharrat Jagdeo, The Guardian, 16 April 2013 | International community should commit to deliver on existing pledges, including commitments to ramp up support for Three Basins countries to develop new forest-friendly economies as part of global efforts to combat hunger, nutrition and climate change. Just by delivering a fraction of funds that have already been promised – we estimate 9% – richer nations could kick start a change that benefits us all.
Phys.org, 16 April 2013 | In the face of unprecedented deforestation and biodiversity loss, policy makers are increasingly using financial incentives to encourage conservation. However, a research team led by the National University of Singapore (NUS) revealed that in the long run, conservation incentives may struggle to compete with future agricultural yields. Their findings were first published online in the Proceedings of the National Academy of Sciences on 15 April 2013.
By Louis Verchot and Arild Angelsen, CIFOR Forests News Blog, 16 April 2013 | A recent article in The Economist magazine asserted that the air temperature of the planet has been flat for the past 15 years despite a steady increase in the greenhouse gas concentration of the atmosphere. The authors find the lack of warming surprising, given the large volume of greenhouse gases that were pumped into the atmosphere between 2000 and 2010. They then provided a lucid explanation of climate sensitivity and suggested that the apparent pause in temperature increase may mean that a doubling of atmospheric CO2 concentration could lead to a lower than expected temperatures and that as a result, perhaps social and environmental policy should focus on adaptation rather than mitigation. We question both the claim that global temperature has stabilized and the policy conclusions drawn.
The Economist, 16 April 2013 | Europe’s flagship environmental policy has just been holed below the water line. On April 16th the European Parliament voted by 334 to 315 to reject proposals which (its supporters claimed) were needed to save the emissions-trading system (ETS) from collapse. Carbon prices promptly fell 40% (see chart). Some environmentalists fear that the whole edifice of European climate policy could start to crumble. The ETS has long been troubled. The scheme is the world’s biggest carbon market, trading allowances to produce carbon which cover about half the European Union’s total carbon emissions. Partly because of weak industrial demand and partly because the EU gave away too many allowances to pollute in the first place, there is massive oversupply in the carbon-emissions market. Prices fell from €20 a tonne in 2011 to just €5 a tonne in February 2013.
European Commission press release, 16 April 2013 | The European Parliament today voted against the Commission’s backloading proposal. In response to the Parliament’s vote, European Commission for Climate Action Connie Hedegaard said: ”The Commission of course regrets that the European Parliament has not approved the back-loading proposal. However, it is worth noting than when it was suggested in the second vote that the Parliament finalised its rejection right away, this was not supported. The proposal will now go back to the Parliament’s Environment Committee for further consideration. Europe needs a robust carbon market to meet our climate targets and spur innovation. The Commission remains convinced that back-loading would help restore confidence in the EU ETS in the short term until we decide on more structural measures. We will now reflect on the next steps to ensure that Europe has strong EU ETS."
By Dave Keating, EuropeanVoice.com, 16 April 2013 | MEPs voted in Strasbourg today (16 April) to reject a proposal from the European Commission to delay auctioning of carbon allowances in the European Union’s emissions trading scheme (ETS). The carbon market fell by the highest rate ever following the vote, with the price of carbon plummeting by as much as 45% to a record low of €2.63. The proposal would have delayed the auctioning of some allowances in order to increase the deflated price of carbon, which was meant to be around €30 at this point. But heavy industry warned that this type of intervention in a market mechanism would erode confidence in the system. The vote, with 334 MEPs against the proposal and 315 for it, is itself being seen as a crisis of confidence in the system. Stig Schjølset, head of EU carbon analysis for PointCarbon, said the proposal is now “effectively dead”.
By Fiona Harvey and Adam Vaughan, The Guardian, 16 April 2013 | The proposed reform – known as "backloading" – aimed to reverse the plummeting price of carbon that has resulted from a surplus of permits in the ETS market. If successful, the reform would have resulted in the postponement of a series of auctions of carbon permits. But MEPs voted 334 against the reform, with 315 in favour, leading green campaigners to condemn the defeat as a "monumental failure" to mend the carbon trading market, which is Europe’s flagship climate policy and the biggest in the world. "They have lost all credibility on climate leadership," said Doug Parr, Greenpeace UK’s chief scientist. Rob Elsworth, a campaigner at emissions trading NGO SandBag, said: "The outcome of the vote is unfortunate. It sends the wrong message to companies, to the public and the international community."
By Mustapha Jallow, Foroyaa Newspaper, 16 April 2013 | Four villages in the Kombo South district of the West Coast region of the Gambia signed an agreement to protect a community forest where the Gambia Experience organised a trees planting exercise in their communities on Saturday 13 April 2013. The agreement puts obligation on the four villages who signed the agreement to protect these trees for the next 25 years. The event which took place in the West Coast Region at Giboro kuta village, has generated much interest as villagers, village Alkalos and high ranking officials attended the ceremony.
By Rina Saeed Khan, Dawn.com blog, 16 April 2013 | Now both the forests and the wild beauty are rapidly disappearing thanks to an order passed by outgoing Prime Minister Raja Pervez Ashraf during his last days in office, to allow the transportation of legally and illegally cut 4 million cubic feet of wood to the rest of the country within four months… “Since the 1990s there has been a ban in the country on transporting timber down country to discourage deforestation, although of course there is an internal demand for wood in Gilgit and Skardu. Now thanks to this last minute order by the PM, they have started doing fresh cutting of trees. We have made videos of them cutting our forests in Diamer just last week and are going to release them to the TV stations,” explains KM Qureishi. He claims that since the order was passed on March 15th 2013, around 1000 to 1500 trees are being cut each day.
17 April 2013
mongabay.com, 17 April 2013 | Rising agricultural profitability due to higher prices, improved crop productivity, and forest conservation itself could make it increasingly difficult for conservation programs tied to payments for ecosystem services to succeed, warns a study published this week in the journal Proceedings of the National Academy of Sciences. The prediction is based on a model that forecasts the potential impact of agricultural intensification on small farmers’ behavior in the Democratic Republic of Congo (DRC). Whereas subsistence farmers may now accept a pittance for abandoning low-yielding agriculture, in the future, higher-yields from improved genetic stock (including genetically modified crops), increased fertilizer use, and better farming practices would necessitate far higher payments to persuade farmers to keep forests standing.
Big News Network, 17 April 2013 | Investing in healthy forests is not only vital for human and environmental well-being but also crucial in the transition to a low-carbon, resource-efficient green economy, says the United Nations Environment Programme (UNEP). Over a billion people worldwide depend on forests for shelter, jobs, food, water, medicine and security. Forests also serve as carbon sinks and stabilize global climate, regulate water cycles and provide habitats for biodiversity while hosting a wide variety of genetic resources. "Forests provide essential services to all of us," said UNEP’s Tim Christophersen, Senior Programme Officer dealing with forests and climate change.
Verified Carbon Standard, 17 April 2013 | Thanks to a $1.4 million grant by Norway’s International Climate and Forest Initiative (NICFI), VCS is teaming up with jurisdictional governments to scale up REDD+ programs around the world. Norway’s support is a major endorsement of the importance of accounting frameworks to jump start jurisdictional REDD+ programs. Additionally, VCS continues to increase the level of support we’re able to provide for stakeholders, this time by adding staff in Brazil.
By Jeremy Hance, mongabay.com, 17 April 2013 | A federal court in Brazil has suspended the use of military and police personnel during technical research on the controversial São Luíz do Tapajós Dam in the Brazilian Amazon. The military and police were brought in to stamp down protests from indigenous people living along the Tapajós River, but the judge decreed that impacted indigenous groups must give free, prior, and informed consent (FPIC) before any furter studies can be done on the proposed dam. However, the decision is expected to be appealed. Earlier in the month, the Munduruku indigenous group in the area warned it would "go to war" with the government if they forced the dam on them, as reported by the Guardian.
By Jeff Tollefson, Nature News & Comment, 17 April 2013 | Lovejoy and his team have been studying this 10-hectare fragment of forest since the late 1970s as part of the largest and longest-running experiment in tropical ecology. In collaboration with ranchers, they cleared the trees around this and ten other plots of varying size to create islands of intact forest. The researchers have been monitoring the plots ever since, documenting how deforestation harms the adjacent untouched forest as specialist plants and animals gradually give way to generalists and pioneer species that prefer disturbed habitat. “We are chronicling the simplification of these forests,” says Lovejoy, a professor at George Mason University in Fairfax, Virginia. Covering roughly 1,000 square kilometres in an area north of Manaus in the central Amazon, the experiment was set up to test fundamental theories about the viability of small, disconnected ecosystems.
mongabay.com, 17 April 2013 | Federal prosecutors in Brazil are threatening to fine 26 beef producers $282 million for buying cattle raised in illegally deforested areas and on Indian reservations, reports Reuters. The fines are based on Brazilian laws that prohibit beef producers from buying cattle from ranches that rely on slave labor, recently deforested areas in the Amazon, and indigenous reservations. The fines are calculated using the number of animals allegedly raised in illegal conditions. According to prosecutors, the 26 companies bought 55,699 illicit cattle between in the first nine months of 2012. The companies were targeted after they refused to sign an agreement binding them to respecting rules on cattle sourcing. Subsequent monitoring by the government found they were buying illegal cattle.
CBC News, 17 April 2013 | A new study that examines the impact of climate change on New Brunswick’s forestry sector says it appears the province will see a decline in some of its native species by the year 2100. The report out of the University of New Brunswick says the balsam fir and white spruce will likely decline over the next century when average temperatures climb, while species that adapted to southern regions, such as red spruce and red oak, will improve. Tom Beckley, a professor of forestry and environmental management at UNB, says the provincial rules governing the industry should reflect the changing environment and protect New Brunswick’s biodiversity.
By Fiona Harvey, The Guardian, 17 April 2013 | Europe’s climate chief vowed on Wednesday to fight on to save the EU’s flagship environmental policy, the emissions trading system (ETS), after a serious blow on Tuesday when MEPs rejected reforms aimed at repairing the ailing system… Connie Hedegaard, EU commissioner for climate action, said: "We are preparing structural [longer-term reforms]. We will have new meetings for stakeholders, in parallel with an impact assessment. We are preparing an initiative." The proposals include measures to restrict rights to carbon permits under the system, and to allow for reviews of the number of permits companies receive for free.
By Bryan Walsh, Time.com, 17 April 2013 | America may be a bit of a mess when it comes to climate policy—though that mess has been surprisingly effective in reducing carbon emissions in recent years—but environmentalists could always look across the Atlantic Ocean to Europe, where greens are green, cars are small and global warming actually matters. Countries like Germany and Spain have led the way in supporting renewable energy, and cities like Amsterdam and Copenhagen put America to shame when it comes to encouraging dense development and carbon-free cycling. But the green jewel was the Emissions Trading Scheme (ETS)—the European-wide carbon market, by far the largest such system in the world. The ETS, launched in 2005, allowed Europe to put a common price on a ton of carbon, which was meant to encourage utilities and factories to reduce carbon emissions in the most efficient way popular.
18 April 2013
By Ed King, RTCC – Climate change news, 18 April 2013 | Beef and soya products from Brazil accounted for a third of carbon emissions associated with deforestation between 1990-2010, scientists say. They warn that the UN’s Reducing Emissions from Deforestation and Forest Degradation (REDD+) initiative and bilateral programmes aimed at preserving the Amazon could be helpless in the face of rising demand for two of the country’s major exports. The study, published in Environmental Research Letters, calls for a greater focus on the role international consumption plays in driving land degradation, combined with domestic incentives to promote forest protection. “With increasing global pressure on Brazilian agriculture to increase production, desire for continued economic growth, and emerging changes to the Brazilian Forest Code, it appears unlikely that Brazilian deforestation rates will continue to decrease at the current rate without strengthening measures to protect forests.”
Survival International, 18 April 2013 | Brazil’s authorities have ignored an urgent deadline by a federal judge to evict all invaders from the heartland of Earth’s most threatened tribe by the end of March. The Awá tribe is at extreme risk of extinction as the authorities have taken no action to stop illegal loggers and settlers from destroying their forest. In March 2012 Judge Jirair Aram Meguerian ordered that all the loggers and settlers should be removed within 12 months. But the deadline has passed – and not a single person has been evicted. Over 30% of one of the Awá’s territories has already been deforested. The Awá have reported that loggers are rapidly closing in on their communities and have already been marking trees for deforestation as little as 2 miles away. Logging trucks laden with wood leave the area day and night and the Indians are scared to go into their forest to hunt.
National Geographic, 18 April 2013 | The European Parliament this week voted 334-315 (with 60 abstentions) against a controversial "back-loading" plan that aimed to boost the flagging price of carbon, which since 2008 has fallen from about 31 euros per tonne to about 4 euros (about $5.20). Since the vote, the price has fallen even farther, to 2.80 euros. The collapsing market is hardly the kind of firm foundation needed for building a clean-energy economy. "Now, the market is dead, as far as I can see," said Steffen Böhm, director of the Essex Sustainability Institute at Britain’s Essex Business School. What will be the aftermath of the ETS collapse? Here’s a quick primer on what happened, and what it could mean elsewhere, particularly in California, which inaugurated a new carbon market at the start of this year.
By John Parnell, RTCC – Climate change news, 18 April 2013 | The proposal to hold back 900m carbon credits from the next allocation of emission allowances, a process known as backloading, was designed to boost demand, and raise the carbon price. The cost of emitting a ton of carbon fell as the recession stunted economic output and the absence of reinforced greenhouse gas targets at the EU meant the cap on emissions was too high. The plans will now return to the Environmental Committee for tinkering ahead of a possible new vote but the consensus appears that the next proposed changes will involve structural alterations. News of the 334-315 vote halved the carbon price instantly.
By Gue Newey, Greenpeace UK, 18 April 2013 | The European Parliament’s decision to vote down a proposal to temporarily remove permits from the EU Emissions Trading System has sparked an outcry of doom-mongery that carbon trading is dead. But the botched ‘backloading’ proposal must be recognised for what it was; a political fudge masquerading as an important intervention, to try and prop up the carbon price. It was inadequate to address the genuine problems with the Emissions Trading Scheme. What is now needed is proper reform of the ETS and Europe’s wider climate policy.
Guyana Times, 18 April 2013 | Members of the Multi Stakeholder Steering Committee (MSSC) of the Low Carbon Development Strategy (LCDS) have issued a release indicating why the proposed cuts to the budget for projects falling under the LCDS should not be implemented. “We are concerned with the proposal by the parliamentary opposition that the budgetary allocations for the LCDS would be cut, hence we are calling on all our country’s politicians to act in Guyana’s best interest by supporting the LCDS budgetary allocations to invest in a strategy which will deliver transformative benefits for our country,” the release said.
Survival International, 18 April 2013 | In a landmark ruling, the Indian Supreme Court today rejected an appeal to allow Vedanta Resources to mine the Niyamgiri hills. In a complex judgement, the court decreed that those most affected by the proposed mine should have a decisive say in whether it goes ahead. The court recognized that the Dongria Kondh’s right to worship their sacred mountain must be ‘protected and preserved’, and that those with religious and cultural rights must be heard in the decision-making process. The tribe now has three months to decide whether to allow mining of their sacred hills, but there are serious concerns over the pressures that might be heaped on the community during this crucial time.
19 April 2013
By Damian Carrington, The Guardian, 19 April 2013 | The world could be heading for a major economic crisis as stock markets inflate an investment bubble in fossil fuels to the tune of trillions of dollars, according to leading economists. "The financial crisis has shown what happens when risks accumulate unnoticed," said Lord (Nicholas) Stern, a professor at the London School of Economics. He said the risk was "very big indeed" and that almost all investors and regulators were failing to address it. The so-called "carbon bubble" is the result of an over-valuation of oil, coal and gas reserves held by fossil fuel companies. According to a report published on Friday, at least two-thirds of these reserves will have to remain underground if the world is to meet existing internationally agreed targets to avoid the threshold for "dangerous" climate change. If the agreements hold, these reserves will be in effect unburnable and so worthless – leading to massive market losses.
The Clean Revolution, 19 April 2013 | After it became evident that the proposal had been rejected, the price of EUAs collapsed to reach an all-time low of €2.63. Going forward, we expect the average price for Phase 3 (2013-20) to stay down at about €2.50, assuming there is no regulatory intervention. That’s much lower than our initial price forecast of €13. Unfortunately, the EUA market is essentially finished until further notice. Speculators and industrials will exit the market, which only leaves utilities who will continue to cover power hedges. Volatility should naturally decline, leaving the ETS operating more like a tax, than a market.
By Rhett A. Butler, mongabay.com, 19 April 2013 | Indonesian palm oil companies would support land swaps as a means to reduce carbon emissions from deforestation while simultaneously expanding production, representatives from the country’s largest association of palm oil producers told mongabay.com in an interview last month. GAPKI General Secretary Joko Supriyono and Executive Director Fadhil Hasan said the Indonesian palm oil industry would support a mechanism under which palm oil companies could swap high carbon stock (HCS) and high conservation value (HCV) forest in so-called "APL" areas – lands zoned for conversion – for the equivalent area of non-forest lands that are part of the national "forest estate" if such exchanges were permitted by law. As much of 40 million hectares of Indonesia’s "forest estate" – land controlled by the powerful Ministry of Forestry – consists of land that is either stripped of forest or heavily degraded.
By Ruri Syailendrawati, Global Prosperity by the Center for Global Prosperity, 19 April 2013 | By and large, the enticement of profitable carbon trading should not overshadow the more dire need of reforestation and forest preservation. Conclusively, despite ongoing arguments against the initiative, the REDD flag has already been raised in Indonesia and it is an important initial step towards what will hopefully be a more community-centric and collaborative effort at sustainable development. It is about time that all parties; the government, for-profit and non-profit private organizations, and the civil society, recognize the signaled urgency to collaborate and carry the “initiative flag” together, in a way that our future generations will not be rendered to say, “They have failed us.”
United Nations News Centre, 19 April 2013 | A United Nations-backed project in Kenya is protecting forests and wildlife, as well as providing alternative livelihoods, and offers valuable lessons on how governments and the private sector can successfully work together for the betterment of communities and the environment. The project is run through the UN Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation (REDD+), which seeks to create financial value for the carbon stored in forests, offering incentives for developing countries to reduce emissions and invest in low-carbon technologies to sustainable development. The Kasigau Corridor REDD+ Project is protecting 200,000 hectares – 500,000 acres – of dryland forest in south-eastern Kenya in a vital wildlife and biodiversity corridor between two national parks, Tsavo East and Tsavo West.
Survival International, 19 April 2013 | Survival International supporters will protest outside Peruvian embassies and consulates around the world on April 23rd to call for an end to the deadly expansion of the Camisea gas project in Peru’s Amazon rainforest, which puts the lives of uncontacted Indians at risk. Protesters will carry placards and gas masks symbolizing the lethal effects of the Camisea project on uncontacted tribes in the area, and will hand a petition to Peruvian embassies and consulates in London, San Francisco, Berlin, Madrid and Paris. The urgent petition asks Peru’s President to stop outsiders and companies from invading uncontacted tribes’ land, and has been signed by over 120,000 people around the world. Uncontacted Indians are extremely vulnerable to diseases brought in by outsiders – initial exploration in the Camisea block in the 1980s led to the deaths of half the Nahua tribe.
City of London Police, 19 April 2013 | City of London Police this week secured its first criminal convictions and prison sentences for a carbon credit fraud following a three-year trans-Atlantic investigation. Ian Macdonald and David Downes were jailed at Kingston Crown Court yesterday for being the masterminds of an international boiler room fraud that funneled $9 million from UK investors into Canadian and US bank accounts. The pair’s criminal operation targeted thousands of people, many of them elderly and vulnerable, with offers of carbon credits and shares that were marketed as highly profitable investments but in reality they were almost or completely worthless. Some of the money was lost to fund lavish lifestyles in Marbella, but much of it has since been recovered from frozen bank accounts and will be returned to victims by the City of London Police.
20 April 2013
The Economist, 20 April 2013 | The world’s largest carbon market has been holed below the water line. On April 16th the European Parliament voted to reject an attempt to bolster Europe’s flagship environmental programme, the Emissions Trading System (ETS). Carbon prices, already low, plunged. The emerging network of global carbon trading and European climate policy as a whole could sink. The ETS has long been a mess. It is a cap-and-trade scheme in which permits to emit carbon—about 16 billion tonnes-worth in 2013-20, or roughly half the European Union’s total carbon emissions—are allocated to firms and can then be traded between them. Partly because recession has reduced industrial demand for the permits, and partly because the EU gave away too many allowances in the first place, there is massive overcapacity in the carbon market. The surplus is 1.5 billion-2 billion tonnes, or about a year’s emissions.
21 April 2013
By Stanley Reed and Mark Scott, New York Times, 21 April 2013 | But over time, the declining prices for the credits have sapped the European market of value, legitimacy and liquidity — the ease with which the allowances can be traded — making it less attractive for financial professionals. A few years ago, analysts thought world carbon markets were heading for the $2 trillion mark by the end of this decade. Today, the reality looks much more modest. Total trading last year was 62 billion euros, down from 96 billion in 2011, according to Thomson Reuters Point Carbon, a market research firm based in Oslo. Close to 90 percent of that activity was in Europe, while North American trading represented less than 1 percent of worldwide market value. Financial institutions that had rushed to increase staff have shrunk their carbon desks. Companies have also laid off other professionals who helped set up greenhouse gas reduction projects in developing countries like China and India.
PHOTO credit: Image created using wordle.net.