The Climate Change Committee will block the holes that let thieves take £5 billion from the carbon exchange
A long-overdue clampdown on security in the carbon trading exchange has been promised by the European Commission’s Climate Change Committee (CCC) yesterday.
Connie Hedegaard, European commissioner for climate action, said: “The commission has identified a range of actions member states can already take in the short term to further improve security. For example, by regularly reviewing security plans, by reinforcing registry account policies and identity checks, by training registry users, etcetera.”
A £5 Billion Lesson In Security
The commission meeting on February 23 was called following the forced closure of the Emissions Trading System for two weeks on January 19. The CCC outlined the actions to strengthen the integrity of carbon market trading following cyber-thefts from several registries over a period of more than 12 months.
Selected local exchanges had been closed a year earlier, following carbon permit thefts amounting to over £2.6 million, but trading continued on the European Emissions Exchange. This followed closely on a December 2009 report that claimed £4.5 billion had been taken out of the system.
The January 2011 closure was forced after the discovery of a further £6 million theft over a period of several months.
Securing the Exchange has been an expensive exercise but the CC believes that its recommended remedial actions will seal the numerous holes in the system but execution still seems to lack a tone of urgency.
Hedegaaard said, “For the medium and long term, we reinforce efforts to identify solutions in co-operation both with member states and through a regular dialogue with stakeholders.”
There is also the issue of VAT fraud to be tackled. Hedegaard suggested that better use of options in existing EU legislation would prevent this. Although enabling legislation at EU level has been in force since September 2009, not all member states have succeeded in implementing it.