A new "guide" for would-be carbon crooks and schemers released today by Friends of the Earth serves as a warning about the fraud, corruption and gaming abuses that are inherent to carbon trading systems contaminated with offset credits. The "American Power Act" proposed by Senators John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) last week would create just such a system. The guide, Ten Ways to Game the Carbon Market, outlines ten different ways in which fraudsters can game carbon trading systems. Nine methods have already been successfully carried out. Some tricks are variations of classic scams such as Ponzi schemes, phishing and tax fraud. But other cons are more particular to carbon trading.

Michelle Chan, Friends of the Earth senior policy analyst and author of the report, said: "Carbon offsets are especially prone to corruption and fraud. Every offset deal requires a story indicating that the emissions reduction would not have been possible without offset revenues, or that emissions would have been higher without the project. Because of this, the offsets market is inherently rife with opportunities for truth stretching-and outright lies."