The VAT Carousel Fraud has seriously undermined the financial integrity of the European Union Emissions Trading Scheme (EU ETS). This timely book is the first to give an overview of fraud in the carbon market. Written by a former broker, it presents unique material on the carbon fraud mechanics and analyses the missing trader fraud (VAT fraud) on European carbon allowances markets with a focus on financial and organised crime issues.

Fraud and Carbon Markets: The Carbon Connection assesses the weaknesses of the Kyoto Protocol and environmental markets, using statistics as a forensic tool on the capital markets. It describes specific cases, the court investigations and various mechanisms. It addresses issues of money laundering and international fraud on capital markets, such as stock manipulation, by exploring the financial mechanisms of the fraud, their impact on the market behaviour and the consequences on their econometric features.

Researchers and students in climate change policy, environmental finance, financial law, organised crime, forensic statistics, financial regulation and risk management as well as financial regulators and policy makers will find this book of great interest.

The missing trader fraud on European carbon allowances markets occurred mainly between the end of 2008 and the beginning of 2009 and is presented in this book from a variety of different angles: financial, scientific and relatively to organised crime.

1. Introduction to the carbon markets: why emissions are important? 2. Criminal organisations and capital markets: a brief review 3. Value added tax and the VAT fraud 4. Carbon: an easy target for an experienced "manager" 5. Anatomy of the crime of the century 6. Money laundry: making white euros with green mechanism on a grey investment 7. Other collateral damages : a disaster never comes alone 8. Statistic forensic: let the numbers speak 9. Who is who in the "carbon" world 10. VAT fraud and moral hazard 11. The new age of organised crime.