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Carbon credits losing allure

| Sourced From The National |

A fall in global prices for carbon credits has made it uneconomic for traders to buy into new projects to reduce emissions, experts say, threatening a number of high-profile green efforts in the UAE that counted on the sale of credits to defray their costs.

Firms in developing countries can be awarded credits for reducing emissions of carbon dioxide and other greenhouse gases through the UN-backed clean development mechanism (CDM). Those credits are then sold on an open market and bought by utilities and others in industrialised countries who need to offset their emissions.

In previous years, banks and other financial brokers initially bought the credits, called primary certified emissions reductions (CERs), before they were awarded and then sold them on international markets at a profit.

But a negative spread between the primary CERs and market prices meant investors now had no incentive to buy credits from new projects, said Will Greene, an analyst with Point Carbon, a carbon credit research firm.

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