The Fake Factory That Pumped Out Real Money
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The Fake Factory That Pumped Out Real Money
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Re: The Fake Factory That Pumped Out Real Money
#2It's a typical case of creating a wrong metric and then steering by it.
I really don't like these 'credits' systems, the same goes for CO2 credits and all the other systems out there like this. They're a magnet for fraud and rarely if ever serve to actually remedy the issue they're aimed at.
It's just a way to move money around, not to solve problems.
The interesting bit here is that is actually quite hard to figure out why what they did was illegal, at first glance you'd say that the agency that created the opportunity is just as culpable as those that took advantage of it, it doesn't take genius to figure out that this would lead to trouble.
http://econlife.com/2012/04/government-guidelines-and-uninte...
Re: The Fake Factory That Pumped Out Real Money
#3It's a typical case of creating a wrong metric and then steering by it. I really don't like these 'credits' systems, the same goes for CO2 credits and all the other systems out there like this. They're a magnet for fraud and rarely if ever serve to actually remedy the issue they're aimed at. It's just a way to move money around, not to solve problems. The interesting bit here is that is actually quite hard to figure…
Yes, that's why most economists I've read seem to agree that carbon tax is better than co2 credit cap-and-trade systems - simpler and harder to game, flawed only because it includes the word "tax" which is unpalatable to the public.
Re: The Fake Factory That Pumped Out Real Money
#4I'd much appreciate a description of the core thing here, without the narrative.
Re: The Fake Factory That Pumped Out Real Money
#5It's a typical case of creating a wrong metric and then steering by it. I really don't like these 'credits' systems, the same goes for CO2 credits and all the other systems out there like this. They're a magnet for fraud and rarely if ever serve to actually remedy the issue they're aimed at. It's just a way to move money around, not to solve problems. The interesting bit here is that is actually quite hard to figure…
> that is actually quite hard to figure out why what they did was illegal
How so? They produced fraudulent RINs and sold them, knowing they were not attached to actual biofuels. It's only a couple of steps removed from printing fake currency.
Did I miss something in how Green Diesel justified their actions?
Re: The Fake Factory That Pumped Out Real Money
#6I'd much appreciate a description of the core thing here, without the narrative.
Biodiesel company unable to produce quality product, resorts to selling fraudulent biofuel credits (without underlying biofuel). Founder is caught and jailed.
Re: The Fake Factory That Pumped Out Real Money
#7It's a typical case of creating a wrong metric and then steering by it. I really don't like these 'credits' systems, the same goes for CO2 credits and all the other systems out there like this. They're a magnet for fraud and rarely if ever serve to actually remedy the issue they're aimed at. It's just a way to move money around, not to solve problems. The interesting bit here is that is actually quite hard to figure…
> that is actually quite hard to figure out why what they did was illegal How so? They produced fraudulent RINs and sold them, knowing they were not attached to actual biofuels. It's only a couple of steps removed from printing fake currency. Did I miss something in how Green Diesel justified their actions?
Well, given that the buyers bought just the numbers and not did not go to the authorities immediately it would seem that everybody in the deal was happy except for the EPA.
If you make it so that a number is assigned to something liquid that is as fungible as can be then you really can't claim surprise if someone then decides to short-circuit the whole thing and bypass the manufacturing step.
Think of it as an optimization. After all it seems the numbers where the valuable bit, the fuel was worthless in comparison.
Re: The Fake Factory That Pumped Out Real Money
#8It's a typical case of creating a wrong metric and then steering by it. I really don't like these 'credits' systems, the same goes for CO2 credits and all the other systems out there like this. They're a magnet for fraud and rarely if ever serve to actually remedy the issue they're aimed at. It's just a way to move money around, not to solve problems. The interesting bit here is that is actually quite hard to figure…
Yes, that's why most economists I've read seem to agree that carbon tax is better than co2 credit cap-and-trade systems - simpler and harder to game, flawed only because it includes the word "tax" which is unpalatable to the public.
A tax is actually vastly more complicated and easier to game.
Remember, the goal is to cap emissions, not to raise money. When you start with a cap and work backwards towards the clearing price, you are guaranteed to be meet that cap. But when you start by setting a price, there is zero guarantee that you're going to meet your emissions target.
Also, the point of cap and trade is that it lets societies meet their emissions target in the least expensive way possible. Whereas a tax imposes the same fees on everyone, regardless of how much it would cost them to lower their emissions. This makes zero sense.
Re: The Fake Factory That Pumped Out Real Money
#9I'd much appreciate a description of the core thing here, without the narrative.
If you don't read the article not sure this kind of comment adds anything to the community. Yes it's a long article. If too long for you skip it.
Re: The Fake Factory That Pumped Out Real Money
#10Earlier quoted context omitted.
> that is actually quite hard to figure out why what they did was illegal How so? They produced fraudulent RINs and sold them, knowing they were not attached to actual biofuels. It's only a couple of steps removed from printing fake currency. Did I miss something in how Green Diesel justified their actions?
Well, given that the buyers bought just the numbers and not did not go to the authorities immediately it would seem that everybody in the deal was happy except for the EPA. If you make it so that a number is assigned to something liquid that is as fungible as can be then you really can't claim surprise if someone then decides to short-circuit the whole thing and bypass the manufacturing step. Think of it as an optimi…
> "In return for the hollow credits, ConocoPhillips paid Green Diesel $18 million, according to court documents. Shell got stung for $14.4 million, BP for $13.6 million, Marathon Oil for $12.4 million, Exxon $1.2 million. All these companies also were forced to buy new RINs to replace Rivkin’s phony ones."
> Federal agents were watching, as was Houston attorney David Fettner. He’d been appointed by a court to find and seize Rivkin’s property on behalf of commodities trader VicNRG, which had sued Green Diesel and other Rivkin companies for selling it $3.8 million in bogus RINs. “Rivkin left a trail of unhappy people behind him,” he says.
Doesn't seem like everyone else was happy
> Well, given that the buyers bought just the numbers and not did not go to the authorities immediately it would seem that everybody in the deal was happy except for the EPA.
You'd be happy buying $1000 from someone for only $100, until you discovered the money was essentially worthless (counterfeit)