Profit by Chance

Before I could even get a chance to learn anything about carbon credits, my son asked me a question. Since one asks questions only to those we hold in high esteem of knowledge, I did not want to lose face; as it would be lost forever. ‘Dad, how did Arcelor get excess credits? Is it life imitating art or art imitating life?’ He was referring to a serial I never saw, entitled ‘Sukh by chance’. ‘Son, accidents happen’ I pacified him. ‘In your career have you seen such errors in audit?’ he asked point blank. I hummed a bit and realized that I had indeed seen few instances of small amounts being deposited in wrong depositor’s account. But what took the cake was when ECS (Electronic clearing system) was introduced when the software vendors responded in a hurry and company dividends were deposited even in closed accounts. In our audit through the computer, these accounts showed up as sore thumbs. However, a similar large amount was admittedly rare.

‘If the company is in steel manufacturing, it must be using fossil based energy generating high heat. So how does such energy glutton smoke belching unit get credit?’ ‘Perhaps it is due to the effort taken to reduce the colour of the belching smoke’ I joked. ‘I get it’ answered by son brightening up my day with the hope that his questions would be finished. ‘Some organization does the calculation of what pollution is prevented and credits are given.’ I nodded, trying to pick up the newspaper to continue my reading. ‘Where do you suppose the calculation went wrong in these days of computers with floating 14 decimal points in the ALU of the chip?’ Now he had bombarded me with the Information Technology mumbo jumbo. ‘I doubt very much if computer were used for calculation of such a task at such an early stage. I think they used only calculators’. I speculated. ‘And were the calculators ever wrong?’ he demanded. ‘They were not wrong since they were marketed’ I pacified him but we had seen genuine revenue gains for our clients when the discounted bills of exchange were of high amounts running into hundreds of crores.’ ‘So?’ the predicted question came and I paused for effect. ‘The Bank clerk used to be working on an eight digit calculator and never noticed the extra digits not being accepted by the calculator as he used to look at the register only and punch almost blindly.’ We both burst out laughing at the silliness of the situation which translated into lacs of unexpected gain for some. We summarized that since the companies under Arcelor were so many, the calculations must have pushed even a 25 digit calculator (if there is one) to its limit and thus the error. ‘So it pays to be large’ my son remarked stopping my mirth with the dead serious philosophy which countered my favorite one which was, size does not matter.

‘Is a carbon credit worth in money?’ came the fundamental question. ‘I guess so’ I replied. ‘Will he sell the credits?’ asked my son. ‘That is the idea’ I replied. ‘The one not cutting pollution will have to buy the credits and only then he will be permitted to carry on belching pollutants.’ ‘You mean that now we shall see advertisements inviting people to buy such certificates?’ my son concluded. I realized that now this was a new opportunity for advertising agencies to start a specialized ‘Carbon’ department of creativity. My son looked at me with disbelief. ‘Do you mean to say that people will actually sell these certificates so that some others can carry on polluting the world?’ I did not know what to say to this.

‘Perhaps we should endeavor to get carbon credits of our own so that we too can sell our credits and become millionaires’. My son’s bright idea now blossomed. ‘Perhaps you can come up with how non-factory owners like us can get carbon credits’ I pre-empted my responsibility to scratch my head. He scratched his head and came up pointing a finger at a small space near the window we called balcony and said, ‘We can get credit for those four pots of plants Mom has planted.’ I looked at the one broken pot of weeds and a rusty oil tin sprouting a thorny stem of a rose without a rose and shook my head saying, ‘too small to account for any credit whatsoever.’ He continued, ‘whenever we went for a picnic, we used to relieve ourselves near a tree. I know for sure we were adding fertilizer for the benefit of the tree. It will be our right to get credit to reduce the green house gasses by helping a tree grow stronger and taller.’ I advised him to make a list of such actions and maybe we can check on the internet if there is any advisory list on credit qualifications.

‘Do you predict economic downturn after 2 years?’ my son asked as he sat to jot the list I asked him to. ‘Dear fellow, we are hoping to recover from the present downturn and you are suspecting another downturn? I must speak to your economics subject lecturer.’ I almost scolded him. ‘You had yourself written earlier’ my son reminded me, ‘that, now and even in the 80’s, the downturn came after the real estate had heated up’. ‘If you are referring to the Dubai Company then let me assure you that Indian companies may not get affected though the workforce will and we will have exodus of overseas labour.’ He summarized the situation, ‘in Dubai they were reclaiming land from the sea. This has worked in the past like in Mumbai Marine drive and Nariman Point where the buyers are mostly commercial. Even Japan has reclaimed land for airport. But in Dubai, it was done in a fancy shape for commercial profits expected immediately and highly levered.’ ‘If we agree there is no real estate heating up, where is the concern?’ I demanded blindly. ‘Carbon credits’ he answered. I waited for the clarification and it came. ‘Isn’t this, making money out of thin air?’ The basic truth hits always below the belt and believe me, it hurts.

My son had effectively identified a scam of Global Proportions with the official seal of many countries. My mind raced to the future of carpet baggers and scamsters. We are the country where the stock exchange scams have taken place as well as the stamp paper where money was literally stamped. Horrors of horror, this is a legitimate conjuring of thin air to currency. When this is the official version I cannot even imagine what the scamsters will develop for this market.