Traders shut down risky carbon desks
The Telegraph|Rowena Mason|September 25, 2011
Large institutional traders have been shutting down their carbon desks, as the £80bn emissions market is still full of hazards six months after an outbreak of fraud. ...The City of London Corporation gave evidence to the Energy Select Committee that some traders are even leaving the market because they are so worried about the potential for handling stolen allowances.
Large institutional traders have been shutting down their carbon desks, as the £80bn emissions market is still full of hazards six months after an outbreak of fraud. ...The City of London Corporation gave evidence to the Energy Select Committee that some traders are even leaving the market because they are so worried about the potential for handling stolen allowances.
The troubled spot market has seen the theft of €3m (£2.6m) in allowances, a €5bn VAT fraud leading to 100 arrests and the temporary closure of a major exchange this year.
In a new MPs' inquiry, market participants and observers, including Barclays Capital, have raised worries that the scandals are seriously damaging the reputation of the European market.
The City of London Corporation gave evidence to the Energy Select Committee that some traders are even leaving the market because they are so worried about the potential for handling stolen allowances.
Since the fraud, doubts have been raised about the future of the European Union emissions trading scheme, in which companies can trade allowances that permit them to emit carbon …
... more [truncated due to possible copyright]The troubled spot market has seen the theft of €3m (£2.6m) in allowances, a €5bn VAT fraud leading to 100 arrests and the temporary closure of a major exchange this year.
In a new MPs' inquiry, market participants and observers, including Barclays Capital, have raised worries that the scandals are seriously damaging the reputation of the European market.
The City of London Corporation gave evidence to the Energy Select Committee that some traders are even leaving the market because they are so worried about the potential for handling stolen allowances.
Since the fraud, doubts have been raised about the future of the European Union emissions trading scheme, in which companies can trade allowances that permit them to emit carbon dioxide.
European authorities have fought back against criticism by proposing better security, including a central registry for carbon allowances to stop theft occuring.
David Merlin-Jones, Civitas research fellow, said: "An active watchdog is required if the emissions trading scheme is to continue.
A full-time, independent agency is required to prevent fraud. It would also be sensible to restrict access to the carbon market to those who need it for compliance purposes."