A burning desire: The need for anti-money laundering regulations in carbon emissions trading schemes to combat emerging criminal typologies

Abstract

Purpose

This article purports to show that an adequate anti-money laundering (AML) regime must be integrated into the carbon emissions market industry in order for it to function effectively, meet its intended goals, and prevent criminals from developing innovative methods to take advantage of particular vulnerabilities this unique market type has created.

Design/methodology/approach

This article discusses the formation of the international carbon emissions marketplace. It posits that critical to the formation and effective operation of any carbon emissions trading market is the simultaneous coexistence of an AML regime preventing criminals from taking advantage of legislative deficiencies. Lastly, the article formulates and analyzes emerging criminal typology threats to which current, developing, and future carbon emissions markets are and will be subject.

Findings

Under the EU ETS, effective AML safeguards were not initially included in the implementation and formation of the EU's carbon emissions trading market, subjecting it to numerous threats and abuses from criminals. The lack of an effective AML regime has resulted in novel and unique criminal typology threats that are currently emerging and need to be addressed to prevent abuses in new and existing carbon emissions trading markets.

Research limitations/implications

The EU has recently started addressing its lack of effective AML safeguards in its carbon emissions trading market. As such, the adequacy of legislative developments needs to be examined over time. Additionally, because many of the emerging criminal typologies identified are based on recent and limited data, further research on the extent of criminality that is actually occurring is recommended.

Originality/value

Because emerging criminal typology threats in carbon emissions trading markets has not been researched at the scholarly level, this article is unique and has substantial value to the AML community.

Citation

Curtis Williams, C. (2013), "A burning desire: The need for anti-money laundering regulations in carbon emissions trading schemes to combat emerging criminal typologies", Journal of Money Laundering Control, Vol. 16 No. 4, pp. 298-320. https://doi.org/10.1108/JMLC-01-2013-0003