The challenge for international emissions trading is to create incentives that align auditors with environmental integrity, says Tyson Dyck in Harper's

Letter to the Editor

May 01, 2010

In a letter to the editor, Tyson Dyck responds to the February 2010 Harper's article "Conning the Climate," in which the author Mark Schapiro analyzes the Clean Development Mechanism, the UN body that awards marketable credits for greenhouse gas emissions offset projects in developing countries.

Says Tyson:

In his article, Mr. Schapiro describes certain prevailing sentiments about the Clean Development Mechanism (CDM) and calls the global carbon market "an elaborate shell game." Schapiro lays much blame on the CDM market gatekeepers, a small group of U.N.-appointed auditors who assess the integrity of emission reductions.

Similar blame was laid on the Big Five audit firms nearly 10 years ago in the wake of the Enron, WorldCom and Tyco scandals. Yet, in spite of the many losses that investors wrote off, they did not write off the capital markets. They instead demanded changes to financial auditing laws. The result was the Sarbanes-Oxley Act.

If we are serious about controlling climate change, we must try to improve the global carbon market before we reject it. To dismiss it is to ignore the potential to improve it. The auditing of greenhouse gas emissions is a challenging new profession, but not an impossible one. As the field grows, it will respond to the regulatory incentives that we create for it. The constructive challenge is to find a mix of incentives that further align auditors' interests with environmental integrity.

Tyson is completing graduate studies at Stanford Law School as a Fulbright Scholar and Fellow in the Stanford Program in International Legal Studies.

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