Under the proposed scheme, a company that pollutes less can sell credits to a company that needs to increase its emission allowance, reports News.com.au

Simon Harrison, from Herbert Geer, said the complex, lucrative scheme is open to rorts as the price of carbon fluctuates wildly, “which presents a plethora of opportunities to rort the system.

Secondly, profits from sales of credits will be reliant upon baselines. If a project produces fewer emissions upon completion than its pre-established baseline, the difference can be sold for substantial profit, providing project owners an incentive to exaggerate the baseline to receive more credits than they would otherwise be entitled to.

He said the Australian Federal Police (AFP) did not have the resources to police the legislation once it starts on July 1, 2011.

He said the AFP may need to employ a team of economists and environmental scientists to provide the necessary brain-power.”