Carbon credit biz feels meltdown heat
24 Oct 2008, 0147 hrs IST, Nitin Sethi, TNN


NEW DELHI: With developed economies staring at a recession, talks of the global financial meltdown forcing climate change negotiations into a free Carbon credit business fells heat Collateral Damageze have gained ground.

The collateral damage from the financial contagion closest home could be to India’s carbon trade that has already locked in investments generating 31 million carbon credits annually up to 2012. Other projects worth 439 million credits that are in the pipeline could now come under the cloud.

The negotiations, meant to hammer out new targets for rich countries to cut their greenhouse gas emissions after 2012 (although the rich nations want the developing ones to cut as well), could suffer a double whammy of a sharp decline in oil prices and the global financial bust.

Besides the carbon market taking a hit in India the entire move towards renewable energy could also suffer with the price of the alternative — oil — now crashing back to the US $60-70 a barrel band.

Initial signs that the deal, to be signed under the UN Framework Convention on Climate Change by 2009, could fall into a black hole came with a recent embarrassment for EU. The host nation for the next meeting of 180 plus countries in December 2008, Poland has revolted against EU’s climate change proposals agreed to earlier.