Image Source : Wikimedia . Org
Flow Chart of how Landfill Gas Clean Development Mechanism projects create and sell carbon credits.
Author
Deefalvo
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LONDON |
(Reuters)
- Nineteen companies selling carbon credits have been shut in the past
15 months for bilking investors out of 24 million pounds ($38.7
million), British regulators said on Wednesday, warning more firms were
trying to sell carbon as a viable option for private investors.The UK Insolvency Service said more than 1,500 investors had been ripped off by the firms, which target mainly the elderly with high pressure sales techniques and promises of hefty returns of more than 40 percent.
"Salesmen played on peoples' keenness to ‘do their bit' to save the environment while making an investment at the same time," the Service said in a statement.
The companies typically offer carbon offsets approved by the United Nations - a feature used to give the offering credibility - as well as those issued in the opaque and unregulated voluntary market. Each credit is equivalent to a reduction of one tonne of carbon dioxide and can be used to offset a company's carbon footprint.
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Carbon credit fraud firms closed
Insolvency service winds up companies that sold older people worthless certificates for millions of pounds in total
Victims were duped
into buying carbon trading certificates that were worthless when sold in
that form. Photograph: Hadyn West/PA
Nineteen firms that attracted investments of nearly £24m from more than 1,500 people by offering "worthless" carbon credits – or certified emission reductions (CERs) – were wound up by the Insolvency Service in the last 15 months.
The consumer minister, Jo Swinson, said the offending companies made money from carbon credit scams in which small investors were promised huge returns for trading permits that each offer corporations the right to emit one tonne of carbon dioxide.
But the amount purchased by people, while costing a significant amount to individuals, was relatively too small to attract interest from big companies, who usually trade CERs in bulk.
Swinson said: "This is a particularly contemptible scam as it not only preyed on older people trying to maximise their savings but also targeted their sincere desire to make ethical investments. Instead investors have been left out of pocket with shares that are either worthless or do not exist.
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