How to Avoid Being Scammed when Purchasing Carbon Credits

This is to alert potential investors to the misrepresentations regarding the carbon credit investment opportunity. Things to take into consideration when purchasing carbon credits are included in this article.

Steps

  1. Image titled Avoid Being Scammed when Purchasing Carbon Credits Step 1
    1
    Read the FSA and National Fraud and Intelligence bureau warnings on carbon credit scams. According to the NFIB "If you buy carbon credits you WILL NOT make any money no matter what the salesman says". VER carbon credit investments to individuals are widely reported to be scams, with victims losing an average of 10,000 GBP.
  2. Image titled Avoid Being Scammed when Purchasing Carbon Credits Step 2
    2
    Understand your risk tolerance and that your investment are in line with it.
  3. Image titled Avoid Being Scammed when Purchasing Carbon Credits Step 3
    3
    Understand what you are committing to.
  4. Image titled Avoid Being Scammed when Purchasing Carbon Credits Step 4
    4
    Don´t be persuaded by product salesmen that their product is just what you want – remember, square pegs do not fit exactly into round holes!
  5. Image titled Avoid Being Scammed when Purchasing Carbon Credits Step 5
    5
    Ask about the exit strategy and how and when are your credits going to be sold? There are costs associated with this and you may have to do some work to find someone to sell on your behalf or open a trading account and manage yourself unless a genuine alternative is available.
  6. Image titled Avoid Being Scammed when Purchasing Carbon Credits Step 6
    6
    Ask yourself the following questions.
  7. Image titled Avoid Being Scammed when Purchasing Carbon Credits Step 7
    7
    How much am I paying? A VCS VER should cost around £4 per tonne according to a report conveyed by Thomson Reuters(2013). A CER is about 50 cents
    • Are the credits visible on the public registry? If not, why not?
    • What standard are they? For investment purposes GS and VCS are the best options in the voluntary market.
    • Are you forward buying? If so beware of pricing and delivery risk and the company you purchase from should be FSA regulated.

Warnings

  • To whom are you making your payment? It should go direct to the provider / seller of the credits and not a third party escrow company, agent or similar.
  • Where do your credits go once you have purchased them? If you have been invited to open a trading account then be aware of the costs which start at around 800 GBP plus further annual membership fees which are usually in the region of 100 GBP upwards
  • What, if any, returns have you been promised? Remember carbon credits are spot trades and there are no fixed or guaranteed returns.

VCS VERs should cost around £4 per tonne on average according to the latest results from a report conveyed by Thomson Reuters(2013)

Article Info

Categories: Environmental Awareness