US Companies have used a questionable business practice of carbon credits

The Clean Development Mechanism of the Kyoto Protocol eventually gestated a perverse incentive; companies find it cheaper to offset their greenhouse gas reducing

Stefano Valentino * / Tierramérica Special

Green house gas reduction

Major U.S. corporations such as Dow Chemical, ConocoPhillips, Chevron and Cabot Corporation, have used a questionable business practice of carbon credits to offset their climate pollution’s role in Europe, according to the following investigation.

Dow was the main buyer. The company has factories producing plastics and chemicals that emit carbon dioxide in Germany, Belgium, Spain, Holland and Poland. Meetings take place 21 among the top 100 European buyers of certified carbon emission reductions (CERs) arising from the 19 projects of dubious legitimacy.

The power generation settled down in the European Union (EU), some of them subsidiaries of U.S. companies are forced to cut greenhouse-gas pollution that cause global warming, by adopting cleaner technologies or offsetting emissions through the purchase of CRE.

Companies find it cheaper to offset their emissions to reduce them really. And the weaknesses of European standards, they can.

The CRE are fought under the Clean Development Mechanism (CDM) of Kyoto Protocol, the only international treaty that requires signatory industrial nations to reduce their greenhouse emissions.

CRE each equal to one ton of carbon dioxide that was thrown into the atmosphere. And for the responsible delivery of an approved project, after certifying that the reduction actually took place. Then you can generate tradable instruments, subject to the laws of supply and demand.

The CDM was established by the United Nations Organization for industrial countries subsidize climate change mitigation in developing nations. But ended up creating a perverse incentive to maximize profits used a handful of manufacturing of industrial gases, mostly located in India and China, which obtained those 19 projects.

China Jiangsu Meilan Chemical’s and Navin Fluorine International Hindu, among others, pledged to capture and destroy HFC-23, a residue from the production of the refrigerant HCFC-22 (hydro chlorofluorocarbon), banned in the European Union and the United States because depletes the ozone layer.

HCFC-22 is also a super greenhouse gas, 810 thousand times more potent than carbon dioxide, and HFC-23 11 000 it is 700 times more.

But Indian and Chinese companies ended up producing more of that gas and getting a lot more CRE than necessary, according to research panel of experts in CDM methodology.

In June 2010, non-governmental environmental organizations CDM Watch, based in Bonn, and Environmental Investigation Agency (EIA, for its acronym in English), based in London, discovered this blatant misuse of the CDM and provided evidence.

“Certificates of HFC-23 do not represent real reductions in greenhouse gases,” said Diego Martinez-Schuett, CDM Watch. “And buyers used these false reductions as permits to pollute more in Europe.”

The 19 projects of industrial gas destruction approved by the CDM accumulated nearly 500 million loans worth three thousand 300 million dollars. Nearly 90 percent of them flooded the EU, and constitute more than half of the total block offsets.

Between 2009 and 2010, U.S. corporations bought almost one million credits for HFC-23 at an average price of $ 16 per unit. Since then “spent” at least $ 16 million in alleged emission reductions.

The same behavior continued their European competitors such as BP and British Shell, RWE of Germany, Norway’s Statoil, the Spanish-Italian group Enel and France’s EDF.

The ten most popular transatlantic companies listed on the main global stock market joined Euronext NYSE-$ 254 million on these false claims, excluding 2011 data not yet published.

In June last year, European regulators decided to ban these CRE, but the measure will only be effective from May 2013. “The EU came under pressure from investors to postpone the ban, initially scheduled for January 1, 2013,” said activist Natasha Hurley, of the EIA.

Meanwhile, the door remains open for Dow, Shell and other polluting companies to acquire a further 53 million false CRE.

U.S. firms say they were unaware of the unlawful nature of HFC-23 credits before the discarded EU.

What matters now is “what will make buyers of these CERs to legitimize their compensation measures,” asked Rob Elsworth, of Sandbag, a nongovernmental organization that investigates the integrity of emissions trading and added up the figures used in this article to show the involvement of businesses.

The question was posed to several of these companies

“In recent years, we use these CERs to meet,” said the head of communications at Dow’s subsidiary in Belgium, Holland and Luxembourg, Drea Berghorst. “We will continue to meet the standards, which means that we will stop using the CRE industrial gas in April 2013,” he said.

Chevron and Cabot responded similarly, without ruling out the option to buy more credits from HFC-23 while in circulation.

“Chevron respected and will respect all aspects required by European standards for emissions trading,” said Sean Comey, media consultant in the company’s world headquarters in California. The corporation took advantage of these credits to offset emissions from offshore oil which operates in Britain.

“We work with a prestigious financial agent, JP Morgan, to buy those CRE and ordered everyone to be certified and validated,” said Vanessa Apicerno, a specialist in media relations of Cabot’s headquarters in Boston.

The corporation used the CRE to offset pollution generated by their articles of carbon black and thermoplastic in France and Italy. ConocoPhillips, which used the credit for its refineries in Britain and Norway, declined to comment.

Now more than ever, companies have good reason to use shareholders’ money in investments that exacerbate climate change.

In fact, brokers are trying to sell the race remnants of these CRE before they become waste in 2013, and push the prices down. In February, prices were only six dollars a ton, after reaching a peak of $ 33.

“Companies are looking for the cheapest way to meet the standards. Market participants are free to have their ethical considerations about how to deal with climate change, but the system is governed by the economy, “said Richard Chatterton, analyst, Bloomberg New Energy Finance.

Statistics show that the price difference is more important than the quality of the certificate.

“The common CRE (such as HFC-23) still constitute over 95 percent of the volumes traded in the future,” said Sara Ståhl, director of global markets for Green Exchange, a market operator dedicated to environmental derivatives. “And they are just 46 cents cheaper than our future plus CRE (non HFC-23).”

Considering the additional amount of CRE inflated supported by the EU until next year, we can estimate that savings to business will be about $ 24 million. The real question is whether these coins worth saving for corporations to save the real world from overheating.

* Published in accordance with Freereporter This research was supported by the Fund for Investigative Journalism and the Society of Environmental Journalists

Latin American Leaders Demand Action on Illicit Arms Trafficking!

Latin America is the area south of the Rio Gra...

Image via Wikipedia

At the close of the summit, the member countries issued a separate and special declaration (available in pdf format here) defining public security as a precondition for economic and social progress and calling for international cooperation, technical assistance and legislation to combat the illicit trafficking of weapons.

Mexico’s President Felipe Calderon also called on the international community to provide financial and technical assistance to the region and urged his counterparts in Latin America to strengthen legislative controls on the possession and use of firearms, ammunition and explosives.

These calls for a more regional approach to curbing arms trafficking were overshadowed by a controversial outburst from Ecuador’s president, the absence of 11 heads-of-state and the summit’s macro-economic themes.

But inside the summit walls, public security emerged as a top concern and representatives of a region struggling with high rates of violence and criminality used the platform to call for agreement on regulating the international arms trade. The surge in violent crime in Latin America has been particularly devastating to countries that have resources important to drug trafficking networks and relatively weak state institutions. Honduras, for example, is a transit country for the majority of cocaine smuggled out of South America and is on track to have the highest murder rate in the world.

A recent United Nations report (pdf available here) says that 31 percent of the estimated 468,000 intentional homicides committed around the world in 2010 occurred in the Americas. And firearms, which were used in 42 percent of violent deaths, “undoubtedly drive homicide increases in certain regions and, where they do, members of organized criminal groups are often those who pull the trigger,” according to the UN.

The ability of Latin American countries to control firearm availability certainly depends on international cooperation. Unfortunately, weapons transfers can take place on a relatively small scale without triggering attention from federal authorities. A variety of obstacles prevent stricter control over domestic guns sales in the U.S., such as powerful lobbying groups like the National Rifle Association and their congressional allies who block legislation that would tighten federal control over gun sales.

The availability of powerful assault weapons in the U.S. has likely had an effect on violence in the region. An analysis by blogger Diego de Valle illustrates how the expiration of the ban on assault weapons in the U.S. is correlated with rising homicide rates in the war against (and amongst) the drug cartels. Access to U.S. assault weapons may also be related to the rise in incidents of multiple homicides in Mexico.

The U.S. is an important player in controlling the circulation of illegal weapons in Mexico, but it is only one of many. According to arms expert Keith Krause, substantial quantities of weapons seized from Mexico’s criminals originate in Mexico or Central America. Honduras, for example, recently admitted that it cannot account for thousands of guns that disappeared from government warehouses. Many weapons that were funnelled to Central America to fight 20th century conflicts are still circulating today, fueling narcotics-related conflict in Mexico, El Salvador and Guatemala.

But controlling this market is a tall order for any country or region. The illicit global market for small arms and light weapons (SALW) is estimated to be worth approximately $1 billion dollars annually. Trade flourishes in part because of a large gray market of legal guns that become illegal when they are lost or stolen from government stockpiles. Government weapons and ammunition stockpiles that are poorly monitored can be diverted to this gray market with little risk because, in the absence of a universal marking and tracking system, it is difficult to trace to a “legitimate” owner and hold that person accountable.

The long career of international arms dealer Victor Bout, and his eventual capture in a DEA sting explicitly demonstrates of the need for a global treaty on the weapons trade, according to Oxfam International. Despite significant evidence of Bout’s participation in illegal weapons sales, he was able to continue to sell guns and fuel conflict in the world’s worst war zones for two decades.

Currently, only 73 (out of 154) countries regulate trade in light weapons and, of those, only 56 have laws criminalizing their illicit transfer. The lack of a global treaty addressing the trade in SALW allows gun traffickers to avoid both arrest in countries that lack penalties and extradition to countries with comprehensive, enforceable laws.

Currently, commodities like bananas and electronics are highly regulated under international law, but there are no substantial agreements requiring states to monitor and restrict transfers of arms and ammunition around the globe.

This may change. A proposed global Arms Trade Agreement will be debated in the UN next year. And while it will not eliminate the illicit trade in guns, it can reduce the availability of military-grade weapons on the shadowy gray market and clarify the fuzzy boundaries between licit and illict trade in weapons responsible for hundreds of thousands violent deaths. It may also give Latin American and Caribbean governments a template for further regional and domestic action on this issue.


human trafficking through the Americas


Image via WikipediaModern day slavery routes

The United Nations estimates that human trafficking through the Americas represents a $7 billion per year business for organized criminal groups. They draw this money from the nearly three million people, mostly immigrants from the region moving north to the United States, who relocate every year, paying between $2,000 and $10,000 per trip.

The reasons for these migrations include economic hardship, political persecution, and family ties. These migrants have become vital providers for their families at home. Remittances sent from the United States to El Salvador, Honduras and Guatemala represent close to ten percent of the GDP of these three countries combined. Organized criminal gangs exploit these vulnerabilities. They extort entire families, sometime several times over several different borders, during one single trip. The gangs also sell their cargo into indentured servitude where they are virtually enslaved until they pay off their “debts.”

The massive trade in humans starts as far south as Argentina and almost always passes through Mexico. The entry points, while often well guarded, rarely change. They include Tijuana, Mexicali, Nogales, Ciudad Juárez, Laredo, Reynosa and Matamoros. The migrants are often held in “safe-houses” on the U.S. side while relatives or friends pay off the remaining sums demanded by the traffickers. The vast majority – close to 90 percent – are from Mexico. Most of the rest come from Central America. These Central American migrants pay more money and face more obstacles en route, including criminal gangs like the Mara Salvatrucha 13, drug trafficking groups like the Zetas and corrupt police who kidnap and extort them during their journey. Still, the United Nations estimates that many of the migrant smuggling routes are still controlled by smaller, “mom and pop” operations.

Other migrants include Chinese who are trafficked through Latin America, most notably Colombia and the Darien Gap in Panama, on their way to the United States. Wealthier Asians are known to purchase false passports in places like Guatemala and Venezuela, which allow them to transit into European countries like Spain easier. Migrants are often used as mules to carry drugs and other contraband.

Haiti; haven for Human Trafficking and illegal adoptions!


Poverty, endemic corruption, and lawlessness are the norm in what is the poorest nation in the Western Hemisphere. The void of authority has made Haiti a key transit point for drugs going to the United States, and, to a lesser extent, Europe, as well as a haven for myriad other criminal activities including human smuggling, human trafficking, and illegal adoptions.

Things have gotten worse since the earthquake in January 2010, which left entire cities in rubble, the country’s little infrastructure in tatters, and over 230,000 dead.

What was already a difficult place to live has also become a nearly impossible place to police. To cite one example, nearly 6,000 prisoners escaped from a maximum security prison following the quake, only eight per cent of whom have been recaptured

The UN mission adds that it’s worried about security forces’ connections to organized crime and noted that the murder rate “did not stop going up” in 2009 to 2010, according to EFE’s account, without specifying by how much or where homicides were increasing.

Amidst the chaos are thousands of children. The United States Department of State estimates that close to half a million children were displaced by the quake, adding to a culture of people inured to the death and destruction around them.

The State Department qualifies Haiti as a “special case” in matters of human trafficking, the highest alarm bell it can sound. And in its 2010 report on human trafficking, it says most of those trafficked are “restaveks,” a term used for domestic child servants who form part of an extended family.

“Restaveks are treated differently from other non-biological children living in households,” the State Department says. “In addition to involuntary servitude, restaveks are particularly vulnerable to beatings, sexual assaults and other abuses by family members in the homes in which they are residing.”

Haiti has created a special Brigade for the Protection of Minors, but this has done little to curb trafficking since the brigade does not pursue forced labour or forced prostitution cases because there is no existing law against these activities, the State Department adds. It noted an increase in the number of restaveks found in shelters since the quake.

The UN’s report may indicate that other children are also being bought and sold in large numbers on the black market, as desperate, entrepreneurial parents seek to lower their burden. Much of this market, it appears, is in the Dominican Republic, which shares the Hispaniola Island with Haiti.

Haitians are trafficked to work on Dominican sugar plantations, in brothels and other forced servitude, the State Department says.