A new scandal has afflicted the European carbon trading market. The European Commission announced today it has suspended all spot trading due to a reported theft of $38 million in 2 million carbon allowances. This is the latest scandal to envelope the controversial European greenhouse trading scheme that has been wracked by repeated frauds since its founding in 2005. The suspension is for a week but the latest fraud charges continue to weaken the program’s credibility.
The Obama administration sought to impose a similar trading market in the U.S with a proposed “cap and trade” program that would force industry to trade carbon emissions for unspecified greenhouse saving measures. The system was considered unverifiable, open to fraud, and a new tax on consumers.
Having failed to pass cap and trade through Congress, the U.S. Environmental Protection Agency has begun trying to impose a new carbon restriction program by regulations. The latest action was on December 22 which targeted oil refineries and power plants.