Carbon Credit Market May Collapse Soon

Carbon Credit Market May Collapse Soon

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The reluctance of industrialized countries to accept binding emission targets will dry up demand for carbon credits and reduce their prices further, experts said at the climate talks in Doha, where 200 countries are trying to negotiate an agreement on climate issues. Russia, Japan, New Zealand have made it clear that they will not accept a legally binding target in the existing climate treaty Kyoto Protocol’s second phase.

Low demand for carbon credits in the wake of economic slowdown has led to a slump in carbon prices. At the same, there is an excess of supply with businesses in countries like India holding on to a large number of carbon credits. While many countries are unwilling to accept binding emission targets, others are setting low targets, signaling a rough ride ahead for companies using the clean development mechanism.

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