Skip to content

A key element of Prime Minister Julia Gillard’s carbon tax policy is designed to ensure that Australia reaches the target of a 5 per cent reduction in greenhouse gas emissions by 2020, not by cutting that volume in emissions from Australia, but by purchasing carbon credit offsets from other countries.

When asked recently about the purchase of offshore permits Julia Gillard said: “Yes, this is going to be an internationally-linked scheme, and so it should be.”

It is alarming that the Prime Minister has given no indication that she is aware or has any understanding of the recent history of the operations of international carbon credit markets.

Just six weeks ago, the World Bank reported that the international market in carbon credits has suffered a debilitating collapse and expressed doubt about the ongoing viability of global markets.

According to the World Bank, trading in credits commenced after the Kyoto Protocol was adopted in 2005, and about $25 billion was generated over the years to 2009.

However, that market collapsed to $1.5 billion last year, due to ongoing concerns about the commitment of nations after the expiry of the Kyoto Protocol in 2012.

The United States withdrew from the Kyoto Protocol in March 2001 and has indicated it will not commit to any replacement treaty, while Russia, Japan and Canada have all stated recently that they will not continue with the Protocol after it expires.

On December 28, 2010, the European law enforcement agency EuroPol issued a media release about extensive defrauding of the European Union emissions trading system.

EuroPol reported that it had raided several hundred offices throughout Europe and had arrested more than 100 people.

In one operation in Italy, the police conducted raids on 150 companies in eight regions as part of an investigation into huge volumes of suspected fraudulent transactions on the Italian Power Exchange.

EuroPol reported that raids also occurred in Norway, Switzerland, Belgium, Czech Republic, Denmark, Latvia, the Netherlands, Slovak Republic and Portugal.

After these actions, trading volumes in Europe dropped by 90 per cent.

It appears that 90 per cent of trades in the European Union emissions trading system were fraudulent, resulting in a loss to European taxpayers of more than $6.6 billion.

The Wall Street Journal concluded that the EU emissions trading system was not actually a functional scheme at all but was a “political smokescreen” to enable European politicians to claim “green” credentials, while avoiding the difficult decisions on reducing emissions.

National Times, 20 July 2011