that the United Nations Environment Program () has revised its estimates for the supply of Certified Emission Reductions (CERs). It had previously expected to issue 1.51 billion CERs till 2012, but now buyers will have to contend with a reduced supply of 1.48 billion CERs.
The lower supply estimates are a result of the slow approval process. Though UN has beefed up the approval- staff, the move will not be able to counter the delays caused by a more stringent process coupled with a rise in the number of projects seeking approval.
As per Henrik Hasselknippe of Point Carbon:
“UNEP has been reducing supply projections for some time… Fewer credits being issued means you will have more people fighting over the same projects and that will have an upward impact on prices”
Further, though the lower supply is unlikely to affect prices directly, it will reinforce the expectations that CER and EUA prices are set to go up. EUAs are currently priced at €25/ton and the average estimate for the 2008-12 period is €38-45/ton.
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