7 ms·

Shell sold carbon credits for carbon that was never captured

109 points by nithinj 2y ago

gnabgib 2y ago
Discussion [0] (42 points, 3 days ago, 8 comments) [0]: https://news.ycombinator.com/item?id=40268576 https://news.ycombinator.com/item?id=40268576
kijin 2y ago
Well, it's called short selling. If there's enough fluctuation in the price of carbon credits, Shell could make a profit even if they are required to buy them back to balance the books. It was probably not a good idea to treat these things like financial instruments.
lisper 2y ago
Well of course they did. The COGS is so much lower -- and hence the profit margin so much higher -- if you do it that way.
colechristensen 2y ago
Stupid. “ Under an agreement with the Alberta government, Shell was awarded two tonnes' worth of emissions reduction credits for each tonne of carbon it actually captured and stored underground at its Quest plant, near Edmonton.” Kinda seems like you should try to smear Alberta not Shell.
- awestroke 2y ago
  Seems like that should be illegal for both parties. Throw Alberta government officials AND Shell execs in jail
coding123 2y ago
Shell... Could just raise the price of their gas to offset carbon going up lol
abdullahkhalids 2y ago
Carbon credits is this weird market, where the product is some positive externality. No one in the market has any incentive to be honest. The buyer of the carbon credits doesn't actually need the carbon to be captured. They just want a certificate for X credits, so they can emit elsewhere or get some other benefit. The seller doesn't actually need to capture the carbon. As long as they can make a convincing enough case to the buyer that they did capture the carbon, the buyer is happy to buy. It's pretty much exactly the same as the plastic recycling market in Canada. The plastic waste is actually just shipped/sold to Asia. Not actually recycled.
- verisimi 2y ago
  Yes, it's a made up product (no one sees or wants 'carbon credits' like they want actual resources), a legislative illusion (the experience is a "y/n" on a screen, digital certificate shuffling), and an exercise in extending trust to the bureaucracy (if 80% or 90% of certs were fake, would anyone know?). What a waste of everyone's time. But the consumer is meant to pay extra taxes for the privilege on their bills.
- moring 2y ago
  Sometimes the only incentive is bad things that happen to you if you get caught. This has been true for pollution before carbon credits. > The buyer of the carbon credits doesn't actually need the carbon to be captured. They just want a certificate for X credits, so they can emit elsewhere or get some other benefit. This is correct, and I think works as intended. The problem on the buyer's side is that the buyer has no incentive to emit no more than allowed by the certificates bought. This has to be verified, and the buyer punished for violation. > The seller doesn't actually need to capture the carbon. As long as they can make a convincing enough case to the buyer that they did capture the carbon, the buyer is happy to buy. The problem here isn't the buyer. Instead, the seller should have to prove that carbon has been captured before getting any carbon credits in the first place -- again, with punishment for violation.
  - verisimi 2y ago
    Say you went to a state of the art carbon sequestering facility, and you see the machine pumping away, what can you verify? Do you trust bureaucrats to correctly measure an invisible 'good', that will be hidden/"stored" inaccessibly underground? It's a world away from tangible goods, eg cars in a production line, or water in pipes. The whole business remains entirely invisible and has scam written all over it.
seydor 2y ago
literally hot air
ChrisArchitect 2y ago
[dupe] Some more discussion: https://news.ycombinator.com/item?id=40268576 https://news.ycombinator.com/item?id=40268576
shrubble 2y ago
5 million tonnes at ~$75 / tonne = $375 million.
honksillet 2y ago
The entire notion of a carbon market is a farce.
theslurmmustflo 2y ago
Casablance meme Im shocked to find fraud in hyper-financialized products
mavili 2y ago
Is ANYONE surprised at all?!
portaouflop 2y ago
Carbon credits is a scam in itself of course there is more scams - its scam all the way down
deleted 2y ago
[deleted]
Simon_ORourke 2y ago
Of course they did, is anyone even remotely surprised at this?
ldehaan 2y ago
[dead]

109 points by nithinj 2y ago

Discussion [0] (42 points, 3 days ago, 8 comments) [0]: https://news.ycombinator.com/item?id=40268576 https://news.ycombinator.com/item?id=40268576

kijin 2y ago

Well, it's called short selling. If there's enough fluctuation in the price of carbon credits, Shell could make a profit even if they are required to buy them back to balance the books. It was probably not a good idea to treat these things like financial instruments.

lisper 2y ago

Well of course they did. The COGS is so much lower -- and hence the profit margin so much higher -- if you do it that way.

colechristensen 2y ago

Stupid. “ Under an agreement with the Alberta government, Shell was awarded two tonnes' worth of emissions reduction credits for each tonne of carbon it actually captured and stored underground at its Quest plant, near Edmonton.” Kinda seems like you should try to smear Alberta not Shell.

awestroke 2y ago
Seems like that should be illegal for both parties. Throw Alberta government officials AND Shell execs in jail

coding123 2y ago

Shell... Could just raise the price of their gas to offset carbon going up lol

abdullahkhalids 2y ago

Carbon credits is this weird market, where the product is some positive externality. No one in the market has any incentive to be honest. The buyer of the carbon credits doesn't actually need the carbon to be captured. They just want a certificate for X credits, so they can emit elsewhere or get some other benefit. The seller doesn't actually need to capture the carbon. As long as they can make a convincing enough case to the buyer that they did capture the carbon, the buyer is happy to buy. It's pretty much exactly the same as the plastic recycling market in Canada. The plastic waste is actually just shipped/sold to Asia. Not actually recycled.

verisimi 2y ago
Yes, it's a made up product (no one sees or wants 'carbon credits' like they want actual resources), a legislative illusion (the experience is a "y/n" on a screen, digital certificate shuffling), and an exercise in extending trust to the bureaucracy (if 80% or 90% of certs were fake, would anyone know?). What a waste of everyone's time. But the consumer is meant to pay extra taxes for the privilege on their bills.
moring 2y ago
Sometimes the only incentive is bad things that happen to you if you get caught. This has been true for pollution before carbon credits. > The buyer of the carbon credits doesn't actually need the carbon to be captured. They just want a certificate for X credits, so they can emit elsewhere or get some other benefit. This is correct, and I think works as intended. The problem on the buyer's side is that the buyer has no incentive to emit no more than allowed by the certificates bought. This has to be verified, and the buyer punished for violation. > The seller doesn't actually need to capture the carbon. As long as they can make a convincing enough case to the buyer that they did capture the carbon, the buyer is happy to buy. The problem here isn't the buyer. Instead, the seller should have to prove that carbon has been captured before getting any carbon credits in the first place -- again, with punishment for violation.
- verisimi 2y ago
  Say you went to a state of the art carbon sequestering facility, and you see the machine pumping away, what can you verify? Do you trust bureaucrats to correctly measure an invisible 'good', that will be hidden/"stored" inaccessibly underground? It's a world away from tangible goods, eg cars in a production line, or water in pipes. The whole business remains entirely invisible and has scam written all over it.