The Stockholm Environment Institute (SEI), in a report released Aug. 24, has found that the United Nations-backed ‘Clean Development Mechanism’ carbon-trading scheme has increased what it targeted as pollution. In addition, it has been riddled with pervasive fraud and fraudulent profits. This is more fully exposed in EIR‘s forthcoming special report, “The Global Warming Scare Is Population Reduction, Not Science.”

The SEI found that the UN plan — part of the Kyoto Accords — was supposed to combat global warming but instead has resulted in the release of more than half a billion additional tons of greenhouse gases. And after studying the issuance of 872 million tradeable “carbon offsets” — allowing the holders to produce more carbon emissions because they had supposedly invested in reducing “carbon pollution” somewhere in the world — SEI found “significant issues” with three-quarters of the offsets, indicating broadscale fraud.

From the standpoint of anti-carbon environmentalists like SEI, the Kyoto and European Union carbon-trading schemes have “seriously undermined global climate action…. 600 million more tons of carbon dioxide have been emitted than if the scheme had not been in place,” says the report.

From the standpoint of the biosphere, and particularly its flora of all kinds, a reasonable observer could see this as an unintentional benefit conferred by incompetent senior environmentalist planners and Wall Street and London speculators. More carbon emissions, more vegetative growth.

But unfortunately, all those extra emissions contain more than carbon dioxide. “For some companies [on the buying end of carbon-offsets trading], buying the right to pollute with offsets is often cheaper than refurbishing their own polluting facilities — like coal-fired power plants or chemical plants that can emit greenhouse gases more dangerous than carbon dioxide. Nitrous oxides, for example. Thus honest pollution control legislation, going back to the 1960s and ’70s, has been set back.”

And those who sell the offsets get to do so by “funding offsets elsewhere, like cleaning up combustible piles of abandoned coal mine waste. In theory, this will keep the total emissions under goals set by the European Union, but the plan only works if the offsets make a legitimate reduction in emissions.” The SEI study found most do not.

Wall Street earns fees from it all. Lucas Ross of Friends of the Earth said Aug. 25, “This is another nail in the coffin for Wall Street’s climate solution.” 

In an interview for “India Business Report” on BBC World News on Aug. 25, India’s Reserve Bank Governor Raghuram Rajan said, “Every adverse development in the global economy works through financial markets first, then trade later…. But you have to be careful about attributing everything to China. There are a number of concerns about when interest rates will normalize around the world, and there are also questions about whether some markets are just too high,” he told BBC.

Rajan, who is under pressure from the Modi government to lower interest rates in order to help the Indian economy to develop faster, said, “The real stimulus for economic revival should come from the governments through growth-oriented reform processes, and not through monetary policy stimulus…. I have been a little concerned about the immense burden for action that is falling on Central Banks, and I think it is quite legitimate for Central Banks to say at some point, ‘we can’t carry the burden ourselves; in fact, we may not have the tools to do everything that is asked of us,'” Rajan said.  “Don’t keep asking us [central banks] to do more, because at some point, we get into territory where the consequences may be more bad than good, if we actually act,” he added.

“In my country, I’m faced with traditional central bank problems like inflation, so we still have a handle to work with those. But in some other countries, you are faced with problems which are maybe way beyond what the central bank is capable of addressing —  such as demographic change, deep changes in productivity — and those are probably best dealt with other tools,” Rajan said. 

The Dow Jones “miraculously” soared to a 600-point spike on Wednesday, after losses of nearly 2,000 points over the previous three trading days. This has once again raised the obvious question of whether the Fed intervened to prevent the continuing meltdown. Whether or not the Fed is drifting back towards an under-the-table QE, the reality is that Wall Street and London are finished and such one-day reversals are merely further signs of the absolute instability, derived from the fact that the trans-Atlantic gambling bubble is crashing and nothing can be done to alter that reality—save a full international Glass-Steagall bankruptcy reorganization.

Some leading voices are openly saying that the Fed has pumped liquidity into the gaping hole in the Wall Street dam. Paul Craig Roberts, former Treasury official under President Ronald Reagan and a leading Wall Street adversary, penned a column this week, charging that the Swiss National Bank is one of the concealed conduits for Fed intervention into global markets. Roberts wrote:

Back in July 2010, then-TARP Inspector General Neil Barofsky testified before the Senate Banking Committee and informed an astonished group of legislators that the size of the bailout was not the $700 billion Congressionally-approved TARP, but was closer to $23.7 trillion. He provided the Senators with a list of all of the Fed and Treasury special discount windows that had been created to feed the bailout monster. Even before Dodd-Frank passage, the Fed had devised mechanisms for pumping money into the market through delegated broker dealers. This would tend to lend credibility to Roberts’ charges about the Swiss National Bank.

In the meantime, as Lyndon LaRouche asserted on Aug. 25 in discussions with colleagues, the patently absurd claim that China’s falling economy and currency devaluation was the cause of the market fall, has been discredited publicly. On Aug. 26, Nicholas Lardy penned a New York Times op-ed titled “False Alarm on a Crisis in China,” in which he tore apart the propaganda barrage claiming that China—as opposed to the trans-Atlantic region—was in a financial and economic free-fall.

Lardy wrote that “the popular narrative is not well supported by the facts. There is little evidence that China’s economy is slowing significantly from the 7-percent pace reported by the government for the first part of the year. Wage growth is running at about 10 percent annually; the pace of creation of nonagricultural jobs is stronger than in any recent year; both real disposable income and consumption expenditures of Chinese households are growing strongly. It is not the picture of an economy heading for a hard landing.” Neither Lardy nor any other sane economist could say the same for the trans-Atlantic region.