A lack of ambitious greenhouse-gas reduction targets among rich nations is the main barrier to continued investment in clean energy, according to a project developer lobby group.
Almost half Project Developers Forum members suspended construction on emission-reducing projects under the United Nations’ Clean Development Mechanism because prices for the carbon offsets the installations would generate are too low, the group said in a statement.
Benchmark front-year UN offsets, known as Certified Emission Reductions, have tumbled 99 percent from their peak in July 2008, as demand from the European Union’s emissions-trading system, the world’s biggest market, slumped amid a financial crisis.
“Over the past 14 years, the CDM has driven billions of dollars of investment into low carbon and renewable energy projects across the developing world, making a significant contribution to sustainable development,” Gareth Phillips, chairman of the Project Developers Forum, said in an e-mailed statement. “All this is now under threat as a result of insufficient mitigation ambition among nations.”