 |
| United Nations Framework Convention on Climate Change (Photo credit: Wikipedia) |
You can mix MLM with almost any business that needs a lot of consumer-level marketing, In the past several years, there has been some attempt to create multi-level "carbon credit" MLMs. So what exactly is a carbon credit?
A carbon credit refers to any sort of trade-able certificate that permits the emission of one ton of CO2 or any equivalent greenhouse gas. Now you're probably going... Why would ANYBODY want to buy that? Good question! To understand that, we have to take a sidetrip to discuss global warming.
Basically, the globe is warming (how much and how fast is subject to some debate) due to all the carbon emissions we're putting into the air from all the fossil fuel we've been burning. And the warming ocean is not good for us in the long run, so United Nations created a framework in 1997 called UNFCCC which established a global quota on how much carbon emissions is allowed for each country. This was signed in Kyoto, Japan, so it's known as the Kyoto Protocol. 192 different states signed, and it was formally adopted in 2005 by the UN at Montreal (see logo above).
What's significant is while US representative signed the treaty, Congress never ratified it, so this protocol is NOT binding on the US. (i.e. US has no requirement to follow the quota given) Canada withdrew from the protocol in 2012, and many nations that had was committed to first period (2008 to 2012) stated that they have no intention to continue onto second period (2013 to 2020). So basically this thing is dead in the water, and may sink altogether.
That doesn't prevent some hucksters from selling you some carbon credits though.
The way carbon credit is supposed to work is by spreading out the carbon quota, the industrialized nations willl not have enough, and will have to 1) spend money on researching green energy and reduce their emissions, and/or 2) spend money on buying quota given to countries that won't use them, like many third-world countries. This is known as the "carbon offset". Theoretically a nation (or companies within a nation) can reduce their carbon emissions so much that they can sell off their own excess, but that's more theoretical.
The carbon credit market relies on the latter: trading credits between nations. Though none of that actually happens. What happens is some sort of initiative buys up the carbon credits for pennies per ton from the third world nations who probably has no idea what it is, only that they're getting some money for not doing anything. Then they resell the carbon credit to companies that need them.
So how does such a thing work? Good question. There is no global unified market for carbon credits. Some programs are registered with the UNFCCC, and there are "boards" that approve various projects and such all over the world, but there's no unifying standard of carbon credit trading.
In the US.multiple "initiatives" are operated by various official cap-and-trade programs operated by local authorities. Participation is voluntary unless state has its own cap-and-trade system in place. California has one that operates in multiple western states.
Fraud in carbon credit is rampant. As a company can get credit for reducing their own emissions, some are known to intentionally pollute before the audit, found to need a high carbon cap, then tune the machinery to maximum efficiency, thus gaining vast amount of carbon credits to be sold. Other ways to defraud is simply outsource or outright move manufacturing to areas not covered by the cap-and-trade carbon credit system. Or perhaps a company can simply *claim* they have carbon credits for sale when they don't. Is there a way to VERIFY the carbon credits they have? Hmmm? (some carbon credits can be verified though, but it's not universal)
Okay, let's assume that the credits are real (may be quite rare). How does a carbon credit MLM work?
Generally, a carbon credit MLM claim to operate as more of a buying club, but in reality, they operate closer to a Ponzi scheme or unregistered (and therefore illegal) investment, in that you can purchase the right to buy carbon credits to be resold for huge profit later. They act as agent or reseller of carbon credit, and help you to sell it to someone else. The multi-level part is for you to bring in more people who also want to buy carbon credits.
Some somewhat more legitimate carbon credit MLMs start their own initiatives or carbon offset programs such as planting trees in third-world countries. However, it's unknown how one could verify / audit such.
Frankly, the authenticity of such programs are always in question, as there is no global or even regional authority to certify that the carbon offset project is genuine or generating real carbon credits. There are various attempts to certify and audit such, but frankly, that's just more bureaucracy on top of a shady thing that's dead in the water.
So where does that leave you? Or moreover, the carbon credit MLM?
As stated before, there really is no such thing as a carbon credit central authority that handles carbon credit trading. Thus, any sort of MLM that lets you invest in such is, at best, questionable, and whether they are profitable or not is even MORE questionsable. You probably get a "feel good" feeling from putting money into such and if you make money from it even better, but is there really such margins? Much less to support MLM payout?
And how do you know you're investing in a real initiative, when it could have been fake? How would you even know which is real and which is fake?
And yes, there are FAKE ones. UK just killed one earlier in 2013, and Interpol has issued a warning that criminals are now targeting carbon trading schemes.
The profits are dubious, there's no standard or law, and criminals have already infiltrated it.
DO NOT GET INVOLVED
No comments:
Post a Comment