UK Closes 19 Fraudulent Carbon Credit Firms That Scammed $39 Million In "Securities"

[hatrack]

More than a dozen companies that "preyed on older people" through carbon credit scams – selling them as if they were shares or bonds, when they were worthless in that form – have been closed by the industry's regulator.

Nineteen firms that attracted investments of nearly £24m from more than 1,500 people by offering "worthless" carbon credits – or certified emission reductions (CERs) – were wound up by the Insolvency Service in the last 15 months.

The consumer minister, Jo Swinson, said the offending companies made money from carbon credit scams in which small investors were promised huge returns for trading permits that each offer corporations the right to emit one tonne of carbon dioxide. But the amount purchased by people, while costing a significant amount to individuals, was relatively too small to attract interest from big companies, who usually trade CERs in bulk.

Swinson said: "This is a particularly contemptible scam as it not only preyed on older people trying to maximise their savings but also targeted their sincere desire to make ethical investments. Instead investors have been left out of pocket with shares that are either worthless or do not exist.

EDIT

http://www.theguardian.com/uk-news/2013/nov/06/carbon-credit-fraud-firms-closed

Thank Heaven that we don't have to deal with the jack-booted thuggery of a carbon tax, but instead can rely on the entrepreneurial ingenuity of the invisible hand's followers!

[Nihil]

1. But, but, but ... that sort of thing is the ideal solution according to "economists" ...

I'm sure I've heard some of them decry the idea of a carbon tax in favour of
letting the invisible hand-job of the market "solve the problem"?

[kristopher]

2. You (and hatrack) might want to work on your terminology

When someone says "the invisible hand of the market" they aren't referring to policies that direct market results; they are saying that the mass of individual choices based solely on self interest via unregulated transactions will produce more beneficial results for society writ large than those made 'by human masterminding'.

The particular challenge facing us is that we need to transition away from carbon to renewables.

How do we deal with that?

Invisible hand proponents will say "do nothing, if one product is superior it will defeat the other".

That is idiotic because nearly every market develops distortions that remove it so far from the ideal that it simply can't help but serve special interests.

That leaves us with a two step process:
1) Arriving at a normative decision that remedial action needs to be taken to override or correct the undesirable market forces.

2) A policy which can achieve the goal and that is acceptable to all the stakeholders needs to be developed and implemented.

In this case the Gordian Knot confronting us is that we don't capture the cost of the damage that fossil fuels are doing in their price. This results in the carbon sources having an unfair price advantage over the low carbon alternatives.

That means we have two compatible paths to follow:
1) We can artificially raise the price of carbon with mechanisms like cap and trade, carbon credits or a carbon tax. As you can see, these are all variations on a theme.
2) We can artificially (subsidies) or substantively lower the price of the alternatives.

With that in mind I hope you can see why I don't understand your remarks.