The value of carbon credits are down 98 percent since the 2008 recession, meaning it now costs about 12 times their value to install the equipment needed to reduce greenhouse gases.
For more than a decade, a small Hamburg consulting company thrived by using technology to cut nitrous oxide emissions at fertilizer plants in developing nations. For that, it was awarded United Nations [carbon] credits that it then sold to European utilities.
Business is now evaporating for Nserve GmbH and its competitors. The value of [carbon] credits are down 98 percent since the 2008 recession, meaning it now costs about 12 times their value to install the equipment needed to reduce greenhouse gases, according to data from Johnson Matthey Plc.
Only 11 percent of about 12,000 projects proposed under the biggest UN program, the Clean Development Mechanism, or CDM, requested credits in the past two years, according to Bloomberg New Energy Finance. They range from wind farms to animal-waste processing plants. At current price levels, the system would spur 100 million metric tons of emission reductions a year through 2020. That’s about 1.3 percent of the 8 billion tons the UN says is needed.
“The money lost doesn’t really hurt me, but what’s sad is that the projects stop,” Marten von Velsen-Zerweck, managing director and co-founder of Nserve, said April 28 from Hamburg. “It’s really embarrassing we set up these projects and the lawmakers have not followed up to keep them going.” […]
Bunge Ltd., a global agricultural-commodity trader, last month said it decided to “significantly scale down” its asset-management unit, including its Climate Change Capital subsidiary in London that created emission-reduction projects.
There were credits for 104 million tons of carbon dioxide equivalent issued under the CDM program last year, less than a third of the 2012 record, according to UN data.
“Supply has fundamentally changed,” Philipp Hauser, vice president, carbon markets, in Rio de Janeiro for GDF Suez Energy Latin America, said by phone April 21. “Prices might peak again and we might regret that the world did not nurture the mechanisms and investors that are capable to generate the mitigation and supply that is effectively needed.” […]
“It’s shameful that regulators have allowed so many years of work to go to nothing,” said Richard Chatterton, an analyst in London at New Energy. “The drying up of demand in Europe is another nail in the coffin.”