Environmental crime is now becoming a serious problem worldwide in different forms, with some of them being among the most profitable criminal activities in the world.
More lucrative and less risky than many traditional criminal activities, environmental crime is growing largely unchecked. “Low risks, high profits,” is the mantra of organized environmental criminals. And environmental crime is paying more and more. Estimates vary greatly, but the figures cited by experts are staggering. After drugs, human and arms trafficking, this is the next most important source of revenue for organized crime. 1
A 2014 report by the United Nations Environment Program (UNEP) and Interpol, estimated the value of illegal and environmentally harmful activities at between $70 and $213 billion per year. This includes illegal deforestation, poaching, trafficking of protected species, fishing, mining and dumping. But this is a conservative estimate since carbon trading has also now become an environmental crime cash cow.
Some companies are willing to do whatever it takes to obtain rare metals at the lowest possible prices, for use in mobile phones and wind turbines. The spread of civil wars and conflicts has led to the involvement of guerrilla and terrorist groups in the trafficking of precious wood and stones. After all, the penalties for these activities are less severe than those attached to drugs trafficking or prostitution. 1
It is the profit motive, not Asian tradition, that endangers rhinos, elephants, tigers and sharks. In traditional Chinese medicine, powdered rhino horn was wrongly believed to be effective against fevers, rheumatism, gout and much else. It was also used in pre-modern medicine in India, Korea, Malaysia and elsewhere. Asia's population and wealth have both grown spectacularly. Tens of millions of people have become able to afford expensive cures. Small wonder the rhino and other endangered species are feeling the pressure. 2
The same, after all, is true of many other species whose products are much sought after in Asia for the culinary, curative or decorative purposes. The economics of extinction are ruthless. The fewer specimens of a creature there are, the greater the value of its products.
The illegal exploitation of natural resources has been left to develop relatively freely, with little or no official intervention. In certain poor African countries, the training, equipment and employment of rangers to fight poaching is carried out entirely by environmental NGOs. But this is often not a fair fight. Each year about 100 guards are killed by poachers who have become a militarized force. A grand total of seven Interpol agents are currently assigned to the fight against poaching in Africa. 1
From 2005 to 2009, a few US graduates straight out of college promised to turn biochar into energy and save the world as well. They raised $54 million, gave $17 million to early investors and then promised a 484% return to later investors. The Clinton Foundation loved them, but they never made even a kilo of biochar. Not long after that the US SEC figured the scam out and shut them down. That was 2009. then it took only 10 years to get one sentenced to 30 months in jail. 3
Instead of high returns, the over 300 victims of this fraud unwittingly invested in uninhabitable land and a bogus trash-to-green energy business idea based on bogus scientific methodology. 4
Some folks called this the biggest environmental scam. Not so says Joanne Nova. “It would be except for all the bigger scams, like wind farm racketeers in Scotland who were paid 328 million pounds to do nothing and the 1.8 billion pounds consumers paid on giant interconnectors so that the wind farms could make a profit, or the $2 billion Russian and Ukrainian fake carbon credit scam. Add the Chinese hydrofluorocarbon factory scam, and the $5 billion VAT Tax fraud and the $100 billion plus dollars invested in scientists in the hope we might understand what causes climate change. And that's just for starters.” 3
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Noticeable environmental crimes
- Wild animal traffic: Regarded by the Interpol as the third largest business in the world, after drugs and arms trafficking, wild animal traffic raises a serious threat for the world's biodiversity survival. 5- Indiscriminate logging: The uncontrolled logging to get wood for furniture or other goods, or even for farm lands, is the most serious cause of this environmental crime.
- Electronic waste mismanagement: In the so-called developed countries there are up to 50 million tons of electronic waste every year (computers, TV sets, mobile phones, appliances, etc.). And up to 75% of all this is estimated to leave the official circuit and a good deal to be illegally exported to Africa, China or India.
- Finning: A hundred million sharks are captured every year by specialized ships and up to 70 million of them are captured to only have their fins cut off alive on the ship and the be thrown back into the sea. This practice involves a slow and painful death, and it has been banned in the EU since 2003. Knowing that a kilogram of a shark fin is worth 600 euros in the Asian market , the finning trade is patently obvious.
- Dumping in rivers and aquifers: This is a very serious crime because not only does it cause the local wildlife to die or get ill but also, as a result of the water leaking into the soil , it finds its way to pollute the surrounding flora as well, affecting the food chain. 5- Carbon trading: Between 2008 and 2009, 1.6 billion euros were swindled in a huge carbon quota market scam dubbed the fraud of the century. Scam operatives are thought to have profited from a weakness in the European Union's carbon trading scheme that enabled the protagonists to sift off millions from the French state. The scam, which threw together wealthy businessmen, a high-ranking police official and France's seedy underworld, operated as follows: in 2005, the EU set carbon emission quotas for companies, in an effort to find a market based mechanism to tackle climate change. Companies were allocated credits which they could then sell or buy according to their needs. 6
France, unlike other EU countries, slapped a sales tax (VAT) on these credits. Here, fraudsters saw a golden opportunity. They bought VAT-free credits abroad and then sold them on the French market with the added sales tax, which they did not pay back to the French government. This money was either reinvested into buying new quotas, placed in a network of dummy companies created for that purpose or invested in luxury goods and real estate.
Several people have been convicted in France for roles in the crime, which investigators say cost the government 1.6 billion euros. In Germany, seven former Deutsche Bank AG managers were also found guilty by a court of participating in a parallel conspiracy to cheat on VAT refunds for carbon emissions trading. 7
California's Cap and Trade Program
A new analysis finds California's cap and trade program may vastly overstate emissions reductions. Under a California program aimed at curbing climate pollution, landowners across the US have received hundreds of millions of dollars for promised carbon dioxide reductions that may not occur. The state has issued carbon offset credits to projects that may overstate their emissions reductions by 80 million tons of carbon dioxide, a third of the total cuts that the state's cap and trade program was expected to achieve in the next decade, according to a policy brief by the University of California, Berkeley. 8
The findings raise troubling questions about the effectiveness of California's cap and trade program, one of the world's most high profile tests of such a market based mechanism for combating climate risks. Implemented in 2013, the system is a centerpiece of the state's ambitious efforts to roll back greenhouse gas emissions, expected to achieve nearly 40% of California's total cuts.
To date, forestry projects have received more than 122 million credits, worth more than $1 billion. But more than 80% of the credits that California's Air Resources Board has issued to some three dozen analyzed forestry projects likely don't represent true emissions reductions. 8
Great concluding remarks from Joanne Nova; “We need to teach our children. No. Free. Lunch. If someone tells you they can save the world for free and you can get rich quickly, it's time to find out why everyone isn't doing it already.” 3
References
Valery Laramee de Tannenberg, ”Can we stamp out environmental crime?”, euractiv.com, March 18, 2016
“Horn of scarcity,” The Economist, April 20, 2013
Joanne Nova, “Green fans, born to be scammed. Finally, jail for a $54 million fake green energy Ponzi schemer,” joannenova.com.au, April 12, 2019
Brian X. McCone, “Temple grad given 30 months in prison for $54 million 'green scam' by Mantria Corp., nbcphiladelphia,.com, April 5, 2019
Jack Dini is author of Challenging Environmental Mythology. He has also written for American Council on Science and Health, Environment & Climate News, and Hawaii Reporter.
