In the first Climate Cheats report in April, the Morgan Foundation revealed the full extent of how New Zealand used fraudulent carbon credits to meet its international obligations to reduce carbon emissions. As a country we have done nothing to reduce our emissions thus far, and have instead relied heavily on cheap, fraudulent credits from Russia and the Ukraine. In total we handed over 97 million Emissions Reductions Units – the vast majority of which were likely fraudulent and did not result in any reduction in emissions. These made up some 25% of the units we handed over in the first Kyoto period. The results of engaging in this scam were that some $200m went into the pockets of foreign criminals, the price of carbon went to virtually zero, our emissions increased, and polluters profited. Finally, the use of these fraudulent units to meet past obligations has allowed the Government to build up a stockpile of units which it is using to meet our future emissions targets, potentially past 2020.
The Government’s response to our report was to say that it was not responsible for purchasing the credits, because these were bought by businesses in the course of the operation of the Emissions Trading Scheme. In this follow up report we identify those businesses that traded most heavily in the cheap, fraudulent foreign credits. If the Government continues to duck responsibility, the risk for these businesses is that the mud sticks to them instead. The data isn’t perfect, but it gives some interesting results:
- NZ Steel made big profits from buying fraudulent foreign units and selling or banking the (more valuable) free units they got from Government; essentially profiting from polluting.
- The power and petrol companies, led by BP but including Z, Caltex and Genesis, were the biggest users of fraudulent units. They claim they did this to provide the best deal for their customers, but interestingly Mobil didn’t purchase any of these units and somehow remained competitive.
- Some forestry companies also bought the units. Some of these may have been engaging in a rort similar to NZ Steel, but it is hard to tell which companies did this.
We want these businesses to join our call for the Government to ‘dump the junk’. At the very least Government should not carry forward any surplus units past 2020; the only reason we have these surplus units is because we traded in fraudulent foreign units in the past.
Without the Government stepping in to right the wrong, any company wishing to clear themselves of being implicit in greenwashing faces a potentially large liability.