The film will be pre-screened at The Frontline Club
We will be there. Will you?
It’s November 21. at 7pm
The film will be pre-screened at The Frontline Club
We will be there. Will you?
It’s November 21. at 7pm
A collapsed CO2 credit system, as well as black-market trade, placed Denmark at the centre of a large-scale fraud in 2009 and 2010. Two years of extensive research by director and investigative journalist Tom Heinemann leads to these controversial facts regarding the climate change policy. In the documentary, ‘The Carbon Crooks’, viewers are encouraged to take a look for themselves.
“The European carbon credit market has de facto collapsed because the price is so low that fluctuations don’t effect carbon emissions,” says Joergen Henningsen, former top official at the European Commission, in ‘The Carbon Crooks’.
When the UN and the EU implemented the international carbon credit system back in 2005, their ambitions were sky-high. The idea was that the market would pay for the reduction of carbon emissions and high prices of as much as 30 euro per credit would help further the green transition in both developed and developing countries. But this is not how it turned out. 2013 will be the year where carbon emissions are the highest in the history of mankind. So what went wrong?
In ‘The Carbon Crooks’ the internationally acclaimed journalist and director, Tom Heinemann uncovers how the carbon credit system, which was implemented after The Kyoto Protocol from 1997, has had the completely opposite effect of what it intended. The bottom fell out of the market and the cheapest credits were traded for as little as 0,05 euro for one ton of CO2 emission. Today it has never been cheaper to pollute since the introduction of the EU ETS carbon market in 2005.
“Many billions – possible hundreds of billions of pounds of carbon are being traded – but that has nothing to do directly with climate change. Indirectly I think it makes things worse. So I would say carbon trading again is worse than doing nothing”, says Kevin Anderson, Professor, University of Manchester and Climate advisor for the British Government.
An essential reason for the collapse has to do with the fact that there are to many carbon credits in the market and combined with the financial crisis in 2008 led to an overflow of credits. However, the credits almost immediately became the object of far-reaching fraud and market speculation and the carbon credit system lost its value. Experts and Europol estimate that European countries have lost around 8-10 billion euro to hackers and VAT fraudsters from all over the world. And as you will see in ‘The Carbon Crooks,’ Denmark played a significant role in this scam.
We are left to wonder why the EU, the UN, and NGOs from all over the world still seem to believe that carbon credit trading help prevent global warming. A collapsed system exploited by VAT fraudsters and common thieves.
For broadcasters: Please contact Charlotte Gry Madsen, DR International Sales firstname.lastname@example.org
For DVD’s etc.: Please contact www.tomheinemann.dk
Tonight Tom Heinemann’s tragic film about the fraud in the carbon credit market will be aired in Danish National television (DR1)
BY HENRIK PALLE , TV EDITOR “Politiken”
Photo: Bo Tengberg
The arms were held high as the world’s political leaders in 1997 agreed to curb emissions of CO2 and other greenhouse gases in order to do something about global warming and thus the entire climate.
However, and while it did not become the tax -based solution that they really had in mind from the European’s side, but rather a market-oriented way of doing things, where the new carbon credits, which states and companies are allocated and then keep house, can be traded between private and public and government agencies. And it was not optimal, but better than nothing. At least the U.S. was on the bandwagon and willing to do something. That is until George W. Bush beated Al Gore by a narrow margin and subsequently pulled the United States completely out of the climate agreement.
No one will admit the defeat
But it is not only the reason why the project with carbon credits ended up – first by running of the track – and at the end completely collapsing , as an EU-official Jørgen Henningsen rounds it up in Tom Heinemann’s excellent film on the subject. It was also wrong because it failed to take the necessary IT-security precautions as it was all too easy to gain access to the group of traders; You could create false identities and use these to roam around with the electronic certificates in carousel fraud and cheat the European states for many billions.
It is a thought-provoking story, Tom Heinemann, previously seen thoroughly on the Third World problems and environmental issues in his films, rolls out before our eyes. The ‘Oh, it should be so good, but now it’s actually bad’, is the sad conclusion of the study of the carbon credit story.
But the most distressing is in fact that the failure will not lead to innovation or increased action in this area: It would require that someone stood up and admitted defeat and took responsibility. What no one is willing to do. There is too much political prestige at stake. Journalisticly, Tom Heinemann takes a chronological approach. He starts with the Kyoto summit and then in chapters – all small well argued tragedies – he tells about fraud and thefts – and how the authorities far too late lifted their bum’s and stopped sitting on their hands.
Skillfully he presents witness after witness. And that’s in no way anyone, but knowledgeable people and politicians: Martin Lidegaard , Ritt Bjerregaard, Connie Hedegaard (maybe you have to be called something with ‘gaard’ to be an environmental politician?) And – among others – the journalist Bo Elkjaer. Apart from Connie Hedegaard, who becomes girly offended, all the others are very open and willing to explain the failure of the project. Also financiers and researchers are participating. And absolutely no one has anything good to say about the market-based carbon credit solution.
Good visual side
On paper it sounds like that the carbon credits is something that can’t be redeemed visually in any particular sexy way. Nevertheless the director and photographer manage to create a story that also gives the visual sense of what it needs. The talking heads work fine, because there are so many of them and they are bound together by dreamy and scary images where clouds of smoke and emissions form a thematic wallpaper behind the story, and with an effective use of music as the spice.
The film’s most crass course is about a Danish company’s water purification project in Africa , where they have distributed 900,000 useless filters and in return got carbon credits to sell because the filters allegedly resulted in a documented smaller carbon footprint.
The problem is, and as the film shows calmly and soberly, that it is not the case, because no one actually uses the water purification filters .
Here you sense really the intention and one becomes uncomfortable.
“It’s all about the international climate battle. It has taken many years to negotiate getting all the pieces of the jigsaw in place. So it would be stupid if all these years of work were suddenly wasted – without having something else to put in its place.
Read the full transcript of the interview with Mrs. Connie Hedegaard here
From Reuters Point Carbon.
11 Sep 2013 18:18
LONDON, Sept 11 (Reuters Point Carbon) – Thefts, fraud and money laundering in Europe’s carbon market have cost European companies and taxpayers more than 15 billion euros ($19.9 billion) since its 2005 inception, according to a new documentary by Danish filmmaker Tom Heinemann.
In “Carbon Crooks”, a 57-minute film that aired on Danish television on Monday, Heinemann said he boiled down 80 hours of film and interviews to explore whether carbon trading has had any impact on rising global greenhouse gas emissions.
“I wanted to make a global film on global issues … but I turned my focus to the (carbon trading) system, and during my research it became clear to me that it has some serious problems, not only with the price of the credits but the ongoing fraud investigations,” Heinemann said.
The film focuses mainly on how the EU Emissions Trading Scheme (ETS), the world’s largest carbon market, was targeted by criminals between 2008 and 2011, events which some have called the “crime of the century”.
“The crime of the century? Well, I think it’s a good example of crime in the modern 21st century and how in particular the internet is used to exploit criminal opportunities,” said Rob Wainwright, director of Europol, in the film.
Carbon Crooks also features interviews with EU Climate Action Commissioner Connie Hedegaard, Danish Climate Minister Martin Lidegaard and former EU Environment Commissioner Ritt Bjerregaard.
STEALING STOLEN CREDITS
The film claims Europe’s trading scheme was targeted by criminals with links to organized crime syndicates all over the world.
Heinemann shows how easy it was for criminals using false identities to open accounts at Denmark’s national emissions registry and commit international tax fraud, estimated by Europol to have cost European tax payers more than 5 billion euros.
The film alleges the Danish registry was mismanaged by Denmark’s Energy Agency, a claim supported by a March 2012 report by independent auditors Rigsrevisionen, which said the registry “attracted VAT (value-added tax) fraudsters and impacted the scope of VAT carousel fraud in other EU member states”.
Heinemann cites one example of an account at the registry opened under the name of a dead Indian poet Mirza Ghalib and registered to a housing estate north of Copenhagen.
“Including VAT fraud, money laundering and theft, it is around 15 billion euros, and more than 60 percent is due to VAT fraud,” said Marius Frunza, a carbon trading expert and lecturer at two French universities, estimating the cost of crimes related to the EU ETS.
Between 2010 and 2011, more than 50 million euros worth of carbon permits were stolen by hackers from a handful of national registries, using elaborate tactics such as triggering fire alarms in government buildings to create a diversion to give them access to accounts.
While all of the reported thefts related to accounts owned by companies, Heinemann reveals that in November 2010 an account impounded by Denmark’s state prosecutor for financial crime was hacked and 1,905 permits being held as evidence were stolen.
The film also examines criticisms of the voluntary carbon market and the Clean Development Mechanism, a carbon offset scheme designed under the 1997 Kyoto Protocol climate pact.
The CDM has come under fire by green groups for approving for climate finance potentially thousands of low-carbon projects that would have cut emissions regardless of whether they received proceeds from selling carbon credits.
The film claims Western countries and companies have bought U.N.-issued credits from Chinese wind farms that were not even connected to the grid, and from hydropower plants that had already been built.
“Looking back on a lot of the evaluations of the projects, it hasn’t worked. It’s been a lot of hot air with few concrete results … and that’s why we in Denmark have to make our green transition here,” said Danish Climate Minister Lidegaard in the film.
Heinemann also investigates a voluntary carbon offsetting scheme in Kenya, where 900,000 water purification devices – dubbed LifeStraws – were distributed by Swiss-headquartered disease control firm Vestergaard Frandsen to deter families from burning wood to boil their drinking water, thus cutting CO2 emissions.
The film argues that the credits, worth up to 67 million euros on the international carbon market, were handed out by carbon credit certifier The Gold Standard based on a survey showing that 79 percent of families would boil their water if they had the time and money, versus 25 percent that actually do.
But through interviews with locals, the film suggested LifeStraws were used by a tiny fraction of recipients, compared to a 92 percent usage rate measured by several studies carried out by three separate firms.
“Three large-scale, statistically relevant field studies of randomly selected households … showed 8 percent of circa 850,000 households do not use the LifeStraw. That is around 70,000 households, so it is unsurprising that Tom (Heinemann) was able to find households not using the filters,” a Gold Standard spokeswoman said.
She added that after assessing the surveys, The Gold Standard agreed to issue half the credits – some 1.3 million units – but would commission a further investigation before handing out the rest.
Carbon Crooks was part-funded by British non-profit film foundation BRITDOC, support that Heinemann hopes will lead to the documentary being aired on UK television.
By Michael Szabo – michael.szabo@thomsonreuters.
Thomson Reuters Point Carbon is a world-leading provider of independent news, analysis and consulting services for European and global power, gas and carbon markets. Thomson Reuters Point Carbon’s comprehensive services provide professionals with market-moving information through monitoring fundamental information, key market players and business and policy developments.
By Chris Lang, Editor REDD Monitor
Yesterday, “Varm luft for milliarder”, a documentary by Tom Heinemann, was broadcast on Danish television. It’s an exceptionally good documentary, with beautiful photography and featuring interviews with politicians, academics, a carbon trader, a journalist and an activist.
The narration is by Danish actor Nikolaj Coster-Waldau (Headhunters, Game of Thrones, Black Hawk Down). “One carbon credit is equivalent to one ton of carbon. Or the volume of one hot air balloon,” he tells us.
Called “Carbon Crooks” in English, the documentary presents a detailed critique of carbon trading starting with the Kyoto Protocol. It looks into the VAT carousels, computer hacking, theft, money laundering and fraud with carbon credits that have cost European tax payers an estimated €15 billion. It mentions carbon credits from wind farms in China that are not connected to the grid. And “smokeless” factories, where you can’t breathe the air. And looks in detail at a project that distributed thousands of water filters to villagers in Kenya but that hardly anyone uses. And it looks at the collapse of the carbon market in Europe.
I watched the documentary last night. This morning I started watching it again, aiming to highlight the best bits. Six hours later I have a transcript of almost the entire documentary. The best bits of this hour-long documentary are about 60 minutes long.
Regardless of your views about carbon trading you should watch this documentary. You can buy a copy via the documentary website.
When the Kyoto Protocol was agreed in 1997, Bill Clinton announced it as a success:
“I’m particularly pleased at the agreement. It strongly reflected the commitment of the United States to use the tools of the free market to tackle this problem. We got what we wanted, which is joint implementation, emissions trading, a market oriented approach. It’s a huge first step. And I did not dream when we started that we could get this far. We should be very, very proud of this.”
While George Bush gets the blame for backing out of the Kyoto Protocol, Kyoto was “made in the USA” by Gore and Clinton.
A few months before the Kyoto meeting, the Byrd-Hagel Senate Resolution had been unanimously approved in the US, preventing the US delegation from signing an agreement in Kyoto (or anywhere else) to limit GHG emissions if this agreement excludes poor countries or if the agreement “would result in serious harm to the economy of the United States”.
Al Gore led the US climate negotiating team in Kyoto. Ritt Bjerregaard was an EU Commissioner and one of the EU’s negotiators in Kyoto. “Our spirits rose when we learned that Al Gore was coming … We were quite optimistic. We simply didn’t think he’d come without being able to get something passed subsquently,” she says in the documentary.
Before Kyoto, the EU wanted cuts in greenhouse gas emissions of 15% by 2010 and a tax on emissions.
During the Kyoto negotiations Gore announced that he was “instructing our delegation right now to show increased negotiating flexibility.”
But this “flexibility” meant pushing the target down to 5.2% by 2012. Gore’s team also insisted on carbon trading as part of the agreement. “It destroyed the whole agreement,” as George Monbiot put it in 2007.
Heinemann’s documentary spares Gore’s further blushes by not pointing out that in 2004, Gore teamed up with David Blood, a former chief executive at Goldman Sachs, to set up Generation Investment Management, which profits from, er, carbon trading.
Connie Hedegaard, the EU’s Environment Commissioner, is interviewed in the documentary. Asked about the massive fraud in the EU carbon markets, she replies,
“You can always say that crimes in cyberspace are a problem. But it happens in all kinds of financial transaction systems. During the financial crisis we’ve seen transactions you can’t trace back to their origin. That’s not an excuse, but you have to know that these kinds of crimes do take place. It’s very difficult to create a system which cuts out crime. I won’t say it can’t happen again. Nobody can say that. When you trade in cyberspace, fraud is possible, just as it is when it’s not in cyberspace, but ordinary crime.”
And that is her response to €15 billion-worth of fraud, in a system that was supposed to address climate change, but which patently hasn’t.
Towards the end of the film, Kevin Anderson Professor at the University of Manchester explains the reality of carbon trading,
“Many billions, possibly even hundreds of billions of pounds of carbon is getting traded. That has nothing to do directly with climate change. Indirectly I think it makes things worse. So I would say carbon trading again is worse than doing nothing.”
We tried for weeks and weeks to get an interview with Vestergaard-Frandsen. They declined. We wanted to hear about their LifeStraw project in Kakamega, Kenya. We would have liked to hear their opinion on why one can gain carbon credits for sale when the calculations are based on a “suppressed demand”, meaning that you get credits just by asking a bunch of people if they would do something else if they had money and time enough.
It’s like asking a commuter in a gridlock: If you had time and money enough would you like to skip the endless quees every day?
Well, the method is valid in the Voluntary Carbon Credit Market. Actually almost half of 119 project is using “suppressed demand” to calculate how many carbon credits they can get out of it.
25% – 38% or 29 %
Just yesterday – three days before the film is about to be aired for the first time in National Danish Television, DR1 Vestergaard-Frandsen have contacted various journalist with a so-called fact-sheet. And now it gets really interesting.
After almost endless mail-communication with the “Aid-Giant”, we were told that various international and national surveys as to how many actually is boiling their water (in real life – not in the suppressed demand-therory) the correct figure was 38 %. We have several other surveys talking about around 25 %.
Now – in the new statement from Vestergaard-Frandsen it gets really interesting. Gone is the 38 % from previous e-mails. Now the rate is 29 %. On top of that comes the “suppressed demand” making the total almost 80 %. (The way to make as many carbon credits as possible)
Here is what Vestergaard-Frandsen now claim:
• Calculations for boiling rates are based on the fact that 79.6 percent of all residents surveyed
either boil water or would choose to boil water if they had the time and resources to do so. This
includes 29 percent of people who currently boil water, a percentage which falls within the
range of the globally recognized Demographic and Health Survey for Kenya which
estimates boiling rates of 25%-38% depending on whether the resident lives in a rural or urban
setting. (Reference: http://www.measuredhs.com/pubs/pdf/FR229/FR229.pdf)
According the above mentioned report it is stated very clearly that boiling rates in rural Kenya is between 24-25 % and up to 38 % in urban areas.
So how can Vestergaard-Frandsen now do a calculation of their own stating that 29 % of the people in Western Kenya boils their water.
A true mystery.
The documentary team also interviews Ritt Bjerregaard, an EU Commissioner who was in Kyoto in 1997 as part of the EU team negotiating the Kyoto Protocol. The interview is available here (in Danish). Bjerregaard explains that the EU would have preferred a tax on carbon, coupled with guidance on reducing emissions and removing some coal-fired power plants. “It was an attempt to change our way to use our energy,” she says in the interview.
But it wasn’t to be. Al Gore led the US negotiating team and pushed carbon trading into the Kyoto Protocol. More than 15 years after Kyoto, greenhouse gas levels in the atmosphere are higher than ever. Bjerregaard comments,
“Although I only have my knowledge from the media, it is clear that our scepticism about the market system has proved to be correct. The trouble is that the world is so dependent on energy, there is no desire to change anything. Apparently there must be truly great disasters in order to get the necessary changes.”
The documentary looks into crime in the carbon markets. Marius-Christian Frunza is a lecturer at Sorbonne and Dorphine University. He’s written a book titled, “Fraud and Carbon Markets” (which REDD-Monitor will be reviewing in the coming weeks). He points out that,
“If you want to do crime and you want to be fast and untraceable, carbon is one of the perfect candidates.”
Larm Film & Heinemann Media present
in corporation with Britdoc Journalism Fund / Channel 4 and DR
The Carbon Crooks –
a documentary on Climate, Credits and Crooks
At the very end of 2012, the Kyoto Protocol expired. All the countries that ratifed the protocol have guaranteed that they will cut down on their carbon emissions and curb the greenhouse gasses.
The question is: How did they do that? One of the solutions has been to buy carbon credits. If e.g. a rich country in the developed world has problems in reaching the goal set in the Kyoto Protocol, they just buy Carbon Credits in the poor countries. Hocus-pocus and the arithmetic fits.
On top of that, the Carbon trading industry has been exposed to massive theft and fraud. According to Europol the tax fraud exceeds more than 5 billion euro. And Denmark was one of the main centers for one of the biggest frauds this world have ever seen.