A carbon offset pioneer who bought a whole lot of tens of millions of {dollars} in carbon credit has been charged with fraud by US authorities following an investigation by Channel 4 Information.
A carbon offset pioneer who bought a whole lot of tens of millions of {dollars} in carbon credit has been charged with fraud by US authorities following an investigation by Channel 4 Information.
Ken Newcombe, a former Goldman Sachs managing director and founding father of C-Quest Capital, was indicted on Wednesday in New York on wire fraud and commodities fraud fees, and will withstand 20 years in jail if convicted.
Mr Newcombe arrange his carbon credit score organisation, C-Quest Capital, in 2008. The corporate ran carbon discount initiatives within the growing world to earn carbon credit, which have been then bought to giant corporations like BP and Shell to offset their emissions.
Most of the initiatives have been based mostly on the distribution of so-called cookstoves, easy units that emit far much less carbon dioxide throughout cooking than open fires. The corporate ran cookstoves initiatives in a number of African and Asian international locations.
However in an indictment launched on October 3 by the US Justice Division, prosecutors accused Mr Newcombe of intentionally falsifying information about how a lot carbon the cookstoves have been saving. These false credit have been then bought on the carbon offset market.
Tridip Goswami, C-Quest Capital’s former head of carbon and sustainability accounting was additionally charged with fraud.
In December 2023, Channel 4 Information broadcast an investigation into the buying and selling of “phantom” carbon credit. Africa Correspondent Jamal Osman, travelled to a village in Malawi, the place locals had been given cookstoves by C-Quest Capital.
The stoves have been extra vitality environment friendly and subsequently produced much less carbon than open fires. C-Quest Capital had then calculated how a lot carbon was being saved by means of use of the stoves so as to generate credit.
However Channel 4 Information discovered that most of the stoves that had been supplied by C-Quest Capital had damaged or been deserted. Our staff spoke to 30 households within the village. Sixteen of them informed us they weren’t utilizing the stoves, normally as a result of that they had been broken.
Channel 4 Information additionally interviewed Professor Barbara Haya, a number one skilled in carbon credit on the College of California, Berkeley. Professor Haya informed the programme that her staff had carried out a quantitative evaluation of the foremost cookstove offset programmes which “discovered they’re claiming over six occasions the quantity of local weather profit they’re actually attaining.”
Professor Haya’s evaluation urged that the claims that cookstoves initiatives world wide have been decreasing carbon emissions by 330 million tonnes have been wildly exaggerated. The actual quantity, by her calculation , was simply 44 million tonnes.
On the time, Mr Newcombe and C-Quest Capital strongly disputed our findings. The corporate signed an open letter criticising Professor Haya’s methodology, and Mr Newcombe gave Channel 4 Information an on-camera interview saying the criticism was “flawed”.
Mr Newcombe informed Channel 4 Information that C-Quest Capital had visited the identical village in Malawi and contested our findings. “Nowhere close to the extent of stoves that aren’t in use or damaged that you simply reported,” he informed us.
Nevertheless only a few months later in early 2024, Mr Newcombe resigned from C-Quest Capital. Then in June 2024, C-Quest Capital revealed {that a} new administration staff had uncovered “wrongdoing” by Mr Newcombe and the corporate had bought “tens of millions” of successfully phantom credit. They revealed that they had reported the data to regulation enforcement, and to an organisation referred to as Verra, which certifies carbon credit score initiatives. Verra stated it might droop 27 cookstove initiatives world wide.
US prosecutors allege Mr Newcombe, Mr Goswani and Chief Working Officer Jason Steele intentionally conspired to “fraudulently inflate” the calculations of how a lot carbon dioxide was being saved. This concerned “manipulating survey outcomes and fraudulently inflating the variety of stoves” and “not writing off stoves the co-conspirators knew have been lacking or damaged”.
This week’s indictment says the “scheme to control” information was present in initiatives in Malawi, Zambia, Angola, Zimbabwe, Thailand, Cambodia and Vietnam.
Mr Newcombe denies the allegations in opposition to him. A spokesman stated he was dying from most cancers. “He’s assured that if he lives to see a jury hear this case, that jury will reject these false fees and return his good identify to him.”
Prosecutors haven’t pursued fees in opposition to the corporate due to its “voluntary and well timed self-disclosure of misconduct” and cooperation with the authorities.
