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UN Carbon Credit Futures Drop to Record on Worries Over Greece

United Nations emission credits dropped to a record as Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Greece is heading for default, potentially dragging Europe into recession.

Certified Emission Reduction credits for December fell 5.6 percent to close at 3.36 euros ($4.26) a metric ton on London’s ICE Futures Europe exchange. The contract was first offered on March 14, 2008.

The European Union’s carbon market has the biggest demand for UN greenhouse gas offsets. Issuance of new credits may rise to 36 million tons this month, according to UN data compiled by Bloomberg. That would be the fourth highest ever.

EU carbon permits fell 3.7 percent to 6.73 euros a ton, their lowest close since Jan. 6 on ICE.

EU economic concerns and the sovereign-debt crisis may drive carbon prices for the rest of 2012’s first quarter, Trevor Sikorski, an analyst with Barclays Plc in London, said today in an e-mailed report. Colder spells of weather may drive prices higher via natural gas, power and coal contract prices, he said.

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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