A Routine Activities Analysis of White‐Collar Crime in Carbon Markets

Abstract

Scholars recently called for increased analysis of opportunity structures that produce white‐collar crimes in legitimate business systems. In the current research, we use mental models, a tool from cognitive psychology, to describe opportunity structures for white‐collar crime in the European Emissions Trading System, the largest carbon market in the world. Specifically, we use routine activities theory to describe the convergence of motivated offenders and suitable targets in the absence of capable guardians in different parts of the system. Implications for utilizing routine activities theory to understand and address crime in carbon markets are discussed.

A European Emissions Trading System Powered by Distributed Ledger Technology: An Evaluation Framework

“…In general, companies prefer to operate in less regulated environments with fewer enforcement activities and expand their trading activities there. Furthermore, Gibbs et al [70] analyze the EU ETS's opportunity structure for white-collar crimes. Conducting mental models from psychology research, the authors show that the structural features of the EU ETS motivate individuals to exploit the legal leeway using legitimate networks and components of the system and thus end up in white-collar crimes.…”

Carbon Crime in the Voluntary Market: An Exploration of Modernization Themes Among a Sample of Criminal and Non-criminal Organizations

“…As might be expected, most studies of carbon crime are based on problems in the involuntary market as the majority of the attention on carbon reduction efforts is focused on these markets (see Bachram 200;Bianchi et al 2010;Frunza et al 2011;Gibbs et al 2013;Lohmann 2009;Martin and Walters 2013;Walters and Martin 2012;Williams 2013). For instance, Martin and Walters (2013) analyse four case studies identifying potential threats including computer, state and taxation crime; scams; corruption; and structural fraud emerging as the result of poor regulation.…”

“…Not only does this criminal activity take place frequently as the researchers note, it also contributes to market failure and therefore allows problems to continue. Importantly, Gibbs et al (2013) rely on Cohen and Felson's (1979) theory of routine activities to explain how the involuntary market can produce opportunities for carbon crime in the European Union ETS. They used mental models to pin point potential points of crime.…”

“…Parallel to the legitimate market platforms, an illegal "market" for carbon crime is drawing the attention of criminologists, sociologists and political scientists (Bachram 2004;Bianchi et al 2010;Frunza et al 2011;Gibbs et al 2013;Lohmann 2009;Martin and Walters 2013;Walters and Martin 2013;Williams 2013). While much has been done to examine carbon crime in the involuntary market, there is room to further expand this area of study with respect to the voluntary market (see also Walters and Martin 2012).…”