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November 19, 2013#

The Chilling Effects of Carbon Trading

Filmens billede UP IN SMOKE fotograf Bo Tengberg

Brand new, brilliant article by Mark Schapiro

Printed in the November magazine from Danish Film Institute

Known for prodding sacred cows, director Tom Heinemann takes a close look at the 200 billion dollar market that is the world’s most significant effort to date to curb greenhouse gas emissions. His evidence in Carbon Crooks points to the real victim: the climate.

In his last film, The Micro Debt, documentary filmmaker Tom Heinemann uncovered deep flaws in the micro-credit system set up by Mohammad Yunus’ Grameen Bank. This time, Heinemann sets out to follow the trail of money from the carbon markets to the distant locales where European polluters attempt to “offset” their greenhouse gas emissions. He visits projects in Bangladesh, where we see a supposedly “smokefree” brick factory belching greenhouse gases into the atmosphere, and China, where Heinemann discovers that carbon credits were issued for a wind farm that was never connected to the power grid. That’s when he realizes it’s not just about one project or another. The problem lies with the financial system of carbon trading itself.

In Carbon Crooks, Heinemann ventures into rarely investigated terrain: the European Trading System, in which companies are supposed to purchase allowances and offsets for their greenhouse gases. The system was conjured out of the negotiations over the Kyoto Protocol in 1997 and is a largely American creation that, Heinemann demonstrates, the Europeans were left to implement after the US pulled out of the global accord in 2001. Carbon Crooks is an investigation into this multibillion dollar carbon market – a huge amount of funds flowing around the world that few understand and even the international police agency Interpol describes as a “legal fiction” because of the counter-intuitive nature of investing in a commodity in order to make it disappear.

Heinemann opted to present the story like multiple chapters of a crime story, with ominous atmospherics by cinematographer Bo Tengberg, known for his work on The Killing and other highend dramas. Creating the mood of a noir mystery, Heinemann’s interviews with participants in the Kyoto negotiations are filmed like they are crime witnesses coolly recollecting Europe’s surrender to the United States as if it had just happened yesterday. The filmmaker’s main inspiration was Charles Ferguson’s Inside Job, which probed the equally opaque machinations of the 2008 global financial crisis. Seeking to uncover the mysteries of the carbon market, Heinemann found many corollaries between Ferguson’s probe into the perverse financial mechanisms and the weirdly ingenious ways that traders and criminals have devised to manipulate the imaginary commodity at the heart of the carbon markets – which despite being called “carbon” is actually traded as a digit on a computer screen. First, there are the traders. Heinemann elicits statements from several who are remarkably candid about the ease with which huge profits can be made from gambling on carbon prices – which have been in steady decline, undermining the market’s very reason for existing. Second, there are the criminals who profit from mastering the highly complex and obscure machinations of the market. Heinemann looks into the hackers who looted the Czech Republic’s central register of emission allowances and the fly-by-night traders who basically took over the Danish trading exchange and, before skipping town, pocketed – not paid – at least five billion euros of VAT. A French carbon fraud expert estimates that the schemes so far have costEuropean taxpayers at least 15 billion euros.

The effect is that of a financial thriller – but, alas, it’s a real story. What’s being scammed is the single most significant initiative the world has yet come up with to try and curb the emission of greenhouse gases into the atmosphere. The film is about a white-collar crime with the highest possible stakes: the stolen funds were among the precious billions that Europe was supposed to commit to help steer us away from fossil fuels •

Carbon Crooks had its national release in September and is produced by Søren Steen Jespersen for Larm Film.

 

 

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