REDD-Monitor’s occasional series, Carbonballs features the howlers made by con artists selling carbon credits as investments. This time round, it’s Enviro Associates trying to explain carbon credits to gullible investors.
Enviro Associates has appeared a few times already on REDD-Monitor. The BBC caught Luke Ryan, director of Enviro Associates saying there was “serious money” to be made by investing in carbon credits. Before he became director of Enviro Associates, Ryan had been censured by the Financial Services Authority. Journalist Paul Murphy, writing on the Financial Times blog, FT Alphaville, described an email from Enviro Associates as “scumbag correspondence“.
On its website, Enviro Associates has a FAQ’s [sic] list. The first question is “Why should I talk to Enviro Associates?” The only sensible answer is that you shouldn’t, unless you happen to work for the City of London police. Of course that’s not what Enviro Associates tells us. Instead we get this nonsense:
Enviro Associates operates in the Secondary Market for VCS Verified Carbon Credits as a introductory broker.
There is no secondary market for voluntary carbon credits. Let’s reminder ourselves of what Andrew Ager said in his 2012 presentation about carbon trading to the City of London Police:
“You would only buy voluntary carbon credits to offset your carbon foot print. There is no other economic reason.”
Here’s another Carbonballs from Enviro Associates:
VERs trade over the counter (OTC) and on some exchanges such as the Chicago Climate Exchange (CCX).
Just one problem here. The Chicago Climate Exchange closed down in 2010. Enviro Associates was registered with Companies House in the UK in February 2011 – after the Chicago Climate Exchange closed down.
Enviro Associates offers a “7 step guide to how the process of buying carbon credits works”. Strangely, this still mentions Carbon Neutral Investments, a company that split three ways almost one year ago. But the mention of Carbon Neutral Investments seems like a good reason to remind ourselves of the warning put out by the Financial Services Authority in March 2013: “Beware when an investment involves Carbon Neutral Investments“.
Enviro Associates gives us more Carbonballs in response to the question “Who buys carbon credits?”:
Individuals can purchase carbon credits to hold speculatively.
This one is true. Individuals can buy carbon credits. Individuals can also buy plastic watering cans on Ebay. They could hold both speculatively. They are extremely unlikely to make any money with either “investment” though. As a survey carried out by the Financial Conduct Authority in 2012-2013 clearly showed.
Enviro Associates silliest Carbonballs is the answer to the question “Can I profit from Carbon Credits?”
Enviro Associates believe that demand for all types of emission reduction units will grow more quickly than supply, meaning that units bought at today’s prices and held could increase in value in the medium to long term.
Apart from the fact that Enviro Associates is selling near-worthless carbon credits the price of which falls over time, the reality is that currently the supply of carbon credits far exceeds demand. In January 2014, Global Canopy Programme, the Amazon Environmental Research Institute, Fauna & Flora International, and UNEP Finance Initiative put out a report that noted that,
There is currently no source of demand that will pay for medium to long-term emission reductions from REDD+ in the period between 2015 and 2020… demand for REDD+ emission reductions could be as little as 3% of the supply between 2015 and 2020.
If you have bought carbon credits from Enviro Associates, or been contacted by Enviro Associates with offers of selling your carbon credits (for an advance fee), please leave a comment below. And if you haven’t done so already, please get in touch with Action Fraud: