Carbon market crashes
International carbon markets have experienced a major slump after several industrial strongholds in the EU reported better-than-expected environmental performance.France, the Netherlands, Czech Republic and the Walloon region of Belgium all revealed their carbon emissions were lower than the allocation they had received, leading to a dive in demand for credits from developing nations and others hoping to cash in on the carbon economy.
The result was an unparalleled crash in carbon markets, with many carbon traders seeing their share value plummet and the price of carbon credits themselves falling by more than 50%.
Gloomier predictions reported from within the trading houses by financial journals suggest credits might fall so far as to become valueless, making companies which trade in them valueless in the short term.
They argue this would be a temporary situation, however, as industry and nations exaggerated their production of carbon when allocations were agreed to make early targets easier to reach.
When real cuts have to be made, meeting targets will become increasingly difficult and credits will once again rise in value.
How well other European countries have fared in meeting their targets will also have a huge impact on the value of credits.
Ironically Spain, recently seen as the world's most attractive country in which to invest in renewable energy (see related story), has bucked the trend and missed its own targets.
Industrial powerhouses Germany and the UK are yet to announce their results.
The ramifications of the slump are potentially disastrous for the environment, as developing countries encouraged to keep emissions low with the promise of cash for credits question whether it is worth their while and industrialised nations see a cheap way out of making any reductions.
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