Policing Carbon Corruption

June 11th, 2009

Posted by: Roger Pielke, Jr.

Imagine a cap and trade regime in place, and a company decides to shave off a few percentage points on its emissions accounting in order to generate a few tens of thousands more allowances. What happens then?

Australian Climate Change Minister Penny Wong explains the policing of carbon corruption via the Herald Sun (and for those like me needing some translation from Australian, here is the definition of “rort”):

Interpol has warned the carbon market will be irresistible to criminal gangs because of the vast amounts of cash to be made. Possible rorts include under-reporting of carbon emissions by firms and bogus carbon offset schemes.

“If someone is rorting it by even 1 per cent a year, we’re talking about many, many millions of dollars,” Mr Torr said.

Ms Wong’s office said AFP [Australian federal police] agents would be expected to enter premises and request paperwork to monitor firms’ emissions reductions. They would act on the 30-strong Australian Climate Change Regulatory Authority’s orders.

It said the authority could appoint staff members or police as inspectors.

She said the Department of Climate Change had spoken to the AFPA [Australian Federal Police Association] and the parties would talk again. Carbon trading involves carbon emissions rights buying and selling. Businesses can offset emissions by investing in climate-friendly projects, or carbon credits.

Ms Wong’s office said provisions had been made to ensure compliance. “Inspectors may enter premises and exercise other monitoring powers,” she said. “The inspectors may ask questions and seek the production of documents. There is provision for the issue of monitoring warrants by magistrates.”

The AFP’s 2855 sworn agents are involved in law enforcement in Australia and overseas, investigating terrorist threats, drug syndicates, people trafficking, fraud and threats against children.

Mr Torr said breaking carbon trading laws would be like breaking other laws. “These offences will constitute another federal crime type, along with narcotics importing, people smuggling and all the rest of it, that the AFP will be expected to police,” he said. “I can see very complex, covert investigations . . . a lot of scientific expertise required.”

Narcotics, human trafficking, carbon corruption. Wouldn’t a carbon tax be easier?

4 Responses to “Policing Carbon Corruption”

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  1. dean Says:

    While I share your preference for a carbon tax, I don’t see that it makes a big difference in this issue. Wouldn’t the amount owed be based on emissions, and wouldn’t we generally be depending on the emitting firm to tell us what they are emitting? Or do you expect the government to physically place monitors on all sites that only they control?

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  3. Maurice Garoutte Says:

    Wouldn’t a carbon tax be easier? Easier to rort? No.
    If you’re wont to rort then you want cap and trade.

    What does your congressman want?

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  5. Mark Bahner Says:

    “While I share your preference for a carbon tax, I don’t see that it makes a big difference in this issue. Wouldn’t the amount owed be based on emissions, and wouldn’t we generally be depending on the emitting firm to tell us what they are emitting? Or do you expect the government to physically place monitors on all sites that only they control?”

    The generally accepted thought is that a carbon tax on coal would be at the mine; it wouldn’t be assessed at the point of combustion. (It’s expected that the mines would then pass that cost on to customers.)

    And natural gas and gasoline don’t need CO2 emissions testing; the amount of CO2 emitted is well-established from the chemical composition. So as long as one knows how much natural gas or gasoline is burned, one can calculate the CO2 emissions; one doesn’t need to measure them.

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  7. RogerCaiazza Says:

    I also am an advocate for a carbon tax based on measurements at the mine, the refinery and the natural gas transmission system. For the record, the estimates of CO2 from those measurements are, without question, more accurate than trying to measure/estimate them at the point of combustion. I base that statement on the last 15 years of my career which has been largely devoted to measuring and reporting SO2 for the acid rain program and NOX for the NOX Budget program using continuous emissions monitoring systems on electric generating unit stacks.

    Although we can measure the concentration of SO2, NOX, and CO2 accurately the problem is that in order to calculate the mass emitted, you have to know the volume of the exhaust gas. In order to do that all the coal-fired electric generating units in the acid rain program measure the stack velocity. While the theory is fine there are assumptions that the flow is laminar and consistent across the stack. Those assumptions just don’t work in the real world so the accuracy is all right but there are acknowledged adjustment factors that bias the results high.

    Someday someone is going to calculate the differences and realize that there is a quick way to get a significant reduction in emissions – just change the accepted methodology for CO2 reporting based on stack measurements to CO2 based on fuel quantities. It will be just about as real as some of the offsets proposed.