Roylat.com

In a paragraph I omitted in the previous post, Mr. Hansen warned that cap and trade would enrich speculators and create opportunities for fraud:

If that isn’t bad enough, Wall Street is poised to make billions of dollars in the “trade” part of cap-and-trade. The market for trading permits to emit carbon appears likely to be loosely regulated, to be open to speculators and to include derivatives. All the profits of this pollution trading system would be extracted from the public via increased energy prices.

Today’s Der Spiegel documents that fraud is not merely a possibility but already big business. The fraud detailed here is undoubtedly the tip of a large iceberg.

Fraudulent Emissions-Trading Schemes Rob German Tax Authorities

By Beat Balzli

12/07/2009 –Der Speigel

REUTERS

The Kyoto Protocol introduced a scheme for trading emissions certificates as a way to help reduce CO2 emissions. German tax authorities are now investigating almost 40 companies that traded certificates for allegedly taking advantage of loopholes in sales tax laws to bilk the taxman out of hundreds of millions of euros.

German Environment Minister Norbert Röttgen has hardly been in office for much more than a month, but he’s already choosing his words for dramatic effect. "It’s about the way we live, and it’s about survival," Röttgen said last Thursday before the German parliament, the Bundestag, referring to the climate summit beginning Monday in Copenhagen. At the summit, the nations of the world will search for ways to reduce the CO2 emissions behind global warming. One of the tools to be discussed is the trading of emissions certificates.

In Germany, though, it is precisely this instrument that is causing a huge headache for Röttgen, as dozens of tax offices across the country are investigating shady emissions trading companies. All of the companies in question maintain accounts with the German Emissions Trading Authority (DEHSt), an arm of the ministry Röttgen heads. According to DEHSt head Hans-Jürgen Nantke, since September, his agency has "received official requests for assistance in cases relating to suspected sales tax fraud from various regional tax offices and tax investigation offices."
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