Government Blamed for Barriers to Climate Project Development
Some 82 percent of major developers in the emissions reduction industry surveyed by the Project Developer Forum cite the lack of government targets on climate change mitigation as the biggest barrier to their continued development of clean energy and emissions reduction projects.
The survey was completed by 17 of the industry group’s members, representing approximately $20 billion of clean energy investment between them.
Nearly half of all respondents said they owned or managed emissions reduction projects that had stalled due to current low carbon prices, resulting in the release of millions of tons of carbon dioxide back into the atmosphere. One respondent estimated this figure to be 6 million tons of CO2.
When asked if they thought backloading — a proposed stopgap plan to prop up the market by temporarily withdrawing 900 million allowances — would solve the problem of low carbon prices, 71 percent disagreed, saying it was just a temporary measure and that further reforms or market interventions were needed. With a major European Parliament vote on backloading scheduled for Tuesday, industry participants are following events closely as a vote in favor of the plan is likely to give a short-term uplift to carbon prices and reaffirm political commitment to emissions trading, according to Project Developer Forum.
Some 53 percent ranked problems with the UN’s Clean Development Mechanism as the lowest barrier to their company’s involvement, indicating that the teething problems experienced by the UN’s carbon market mechanism, which was created to stimulate cost-effective investment in clean energy projects across the developing world, have largely been overcome.
Earlier this week, analysis from Bloomberg New Energy Finance showed that the price of Certified Emission Reduction credits issued by the United Nations increased 38 percent this month. The surge came amid speculation that developers are buying up the contracts — which are sold by the UN in a bid to encourage investment in climate-friendly projects — to meet commitments with buyers to deliver offsets.
Certified Emission Reductions reached a 12-week high of 43 European cents ($0.56) in London on Monday but the contracts are still down 91 percent from a year ago due to an oversupply, Bloomberg said.
Photo Credit: Penny Higgins
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