Author: Interpol. Environmental Crime Programme
Title: Guide to Carbon Trading Crime
Summary: Over recent decades there has been a growing scientific consensus that average global temperatures are rising as a result of increased concentrations of greenhouse gases in the atmosphere caused by human activities, particularly industrialization. In response to this scientific evidence, the global community agreed in 1992 to an international treaty, the United Nations Framework Convention on Climate Change (UNFCCC). The treaty requires countries to cooperatively consider what they could do to limit average global temperature increases and the resulting climate change and to cope with whatever impacts were, by then, inevitable. As at June 2013, the treaty has been ratified by 195 parties.1 In 1997, the Kyoto Protocol was adopted as an international agreement under the UNFCCC and entered into force in February 2005.2 As at June 2013, there are 192 parties to the Protocol.3 The major feature of the Protocol is that it sets binding targets for 37 industrialized countries (the “Annex I” parties)4 and the European Community to reduce their emissions of six specified types of greenhouse gases – the three most important being carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). The others being hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6). While countries are encouraged to reduce emissions of all these greenhouse gases, for the purposes of standardising the measurements, the emissions of these other gases are converted into the equivalent “global warming potential” of CO2. For example, methane (CH4) has 21 times the global warming potential of carbon dioxide (which is measured over a 100 year timescale).5 Therefore the emission of 1 tonne of methane is considered to be equivalent to the emission of 21 tonnes of carbon dioxide. While the Kyoto Protocol requires signatory countries to meet their targets primarily through domestic measures, it also provides for a number of flexible mechanisms that allows them to offset their emissions by purchasing reductions made in other countries. This is done by purchasing “units”, each unit being equivalent to one tonne of CO2 (emissions of other greenhouse gases being converted to the equivalent number of tonnes of CO2). Through the trading of these units to offset emissions of greenhouse gases, a new commodity has been created in the form of emission reductions or removals. Since carbon dioxide (CO2) is the principal greenhouse gas, this market is widely referred to as the “carbon market”,6 with each of the units traded commonly referred to as “carbon credits”.7 Under the Kyoto Protocol, countries are to keep precise records of the trades carried out. Transfers and acquisitions of carbon credits are tracked and recorded through the registry systems under the Protocol. The UN Climate Change Secretariat, based in Bonn, Germany, keeps an international transaction log to ensure secure transfer of carbon credits between countries and to verify that transactions are consistent with the rules of the Protocol. Emissions trading schemes may also be established as climate policy instruments at the national and regional levels. Under such schemes, governments set emissions obligations to be reached by the participating entities. The European Union’s Emissions Trading Scheme (EU-ETS) is the largest in operation. INTERPOL, through its Environmental Crime Programme and the Economic and Financial Crimes sub-Directorate, recognize that emerging carbon markets, like any market, are at risk of exploitation through criminal means and therefore require proper monitoring and enforcement to ensure environmental and financial integrity. This guide is not intended to take a position on the value of carbon trading in either a general or specific form but is intended to assess the current vulnerabilities of the existing and emerging carbon markets and provide fundamental information necessary to establish adequate policing of these mechanisms. INTERPOL is the only international police organization with a trans-boundary mandate, with designated units addressing both environmental and financial crimes. Its mandate includes the exchange of criminal intelligence and sensitive information between law enforcement agencies amongst INTERPOL’s 190 member countries. INTERPOL recognizes carbon trading crime as a new and emerging type of environmental and financial crime. Before assessing the potential scope for criminal activity, this report offers a comprehensive overview of the carbon market and carbon trading in practice, for those unfamiliar with its operations and terminology.
Details: Lyon, France: Interpol, 2013. 31p.
Source: Internet Resource: Accessed August 19, 2013 at: www.interpol.int
Year: 2013
Country: International
URL:
Shelf Number: 129663
Keywords:
Carbon Trading Crime (International)Environmental PollutionFinancial CrimesOffenses Against the Environment |
