Protecting the environment with intelligence

Carbon Trade

Carbon trading has emerged as one of the most heavily promoted mechanisms for tackling climate change. By putting a price on greenhouse gases, proponents say, emissions reductions and increases can be traded between companies and governments, leading to the most efficient means of greenhouse gas reduction.



EIA’s investigations and other recent evidence shows that many aspects of the carbon trading system are wide open to ‘gaming’, exploitation, corruption and abuse.

EIA has been closely involved in investigating dubious emissions reductions earned from destroying the climate-changing by-products of manufacturing refrigerant chemicals (HFCs). Plants which destroy these pollutants can sell the credits for cash.

In fact, so valuable were the permits earned for destroying these greenhouse gases that many companies began to over-produce them simply to harvest the credits. This led to more refrigerant by-products being manufactured, more greenhouse gas emissions in developed countries (since permits were being bought to allow continued emissions) and a massive waste of public money.

Following EIA’s exposure of gaming in the carbon system, the European Union eventually agreed to outlaw the use of these kinds of permits.

Similarly, proposed new systems for trading emissions avoided by protecting forests (so-called Reduced Emissions from avoided Deforestation and Degradation – REDD) could be vulnerable to abuse and corruption. EIA will be keeping a close watch.