Falling Carbon Prices Jeopardize Clean Energy Interest

January 26, 2009

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The economic slump and new green technology are accounting for a significant drop in carbon prices, Wall Street Journal reports. And to cut down on costs for carbon-emission permits, companies are making manufacturing processes cleaner so as to emit less pollution.

But there is a negative side: The lower carbon prices are tempting investors to forget about clean energy projects in third-world countries.

2008 was a record year for carbon permit (CERs) prices in Europe, but now there is a 60 percent drop from the costs over the summer. Investors jump ship every time the price of CERs drops, and with the wavering economy, it doesn’t make sense for them to continue expensive, time-consuming clean energy projects when CER prices are at a record low, say companies that develop clean energy.

Experts hope that upcoming climate negotiations conferences can find a solution that makes clean energy in developing countries continually attractive, even if the carbon market continues to spiral downward. If that does not happen, the strides clean energy is making in the developed world will continue to be offset by the rising emission is the developing world.

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