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More Carbon Market Fraud Unearthed

carbonic emissions2The biggest clean energy auditor in the world has been suspended by United Nations inspectors, the latest in a round of fraud headlines involving the carbon trading market under the Clean Development Mechanism.

SGS UK’s accreditation was suspended after accusations that its staff had not properly audited projects in carbon trading markets. It also was asserted that SGS’s auditors were not qualified to perform the audits, reports the Times Online.

DNV, a Norwegian auditor, was hit last November for its involvement in similar infractions.

UN inspectors claim to have found six irregularities in a recent surprise check of SGS’s work. Even though SGS has fixed the problems, it is still suspended, pending UN verification that the issues have been rectified.

The dust-up is being blamed on SGS being overworked and overmatched after taking on a large number of audits formerly handled by DNV, which prior to November itself was the largest REC auditor in the world.

Critics also say it is problematic that in most cases the auditing companies are paid by entities who want to sell the carbon credits, and thus the auditors are prone to approve as many projects as possible in order to generate more business.

This latest headline follows August news of carbon trading credit scams in the UK.

To thwart fraud Down Under, Australia recently gave its federal police the ability to enter company premises and request paperwork in order to prosecute a new range of climate offenses including bogus carbon offset schemes and under reporting of carbon emissions.

The recent problems in Europe are not expected to bode well for the EU’s bargaining position in the upcoming Copenhagen climate talks, analysts say.

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One thought on “More Carbon Market Fraud Unearthed

  1. I think this is not true that the validator is being paid in carbon credits. This misunderstanding needs to be corrected, or a proper fact needs to be presented.

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