The great carbon trading fraud

In a new report, Friends of the Earth says that to date "cap and trade" carbon markets have done almost nothing to reduce emissions but have been plagued by inefficiency and corruption that render them unfit for purpose.

"The majority of the trade is carried out not between polluting industries and factories covered by carbon trading schemes, but by banks and investors who profit from speculation on the carbon markets – packaging carbon credits into increasingly complex financial products similar to the 'shadow finance' around sub-prime mortgages which triggered the recent economic crash."

The FoE claims that the first phase of the European emissions trading scheme between 2005 and 2007 failed. And the second phase, from 2008-2012, is likely to fail too, it said.