The United Nations body responsible for channeling hundreds of billions of dollars towards cutting emissions is under growing scrutiny as its once booming investment program dries up, leaving most of its funds unspent while other climate initiatives are short of cash.
The Kyoto Protocol's Clean Development Mechanism (CDM) has helped funnel almost US$400 billion into emission-cutting projects in developing countries by allowing investors to earn carbon credits they can sell to companies and governments of richer nations that use them to meet emission targets.
From 2003, developers flocked to register projects, such as destroying waste greenhouse gases at Chinese chemical plants or installing hydroelectric power stations in Brazil, and made huge profits by selling the resulting carbon credits for up to 22 euros (US$30.40) a tonne in 2008.
But interest has waned while countries wrangled over setting new emission goals under the United Nation's Framework Convention on Climate Change (UNFCCC), hammering carbon credit prices down to unprofitable levels below 0.20 euros.
The board appointed to oversee the CDM insists work should continue to improve the system to ensure it is ready when demand returns, yet analysts and governments see almost no prospect of a price recovery until 2020, when a new UNFCCC deal is due.
The latest UN financial statements show the CDM has operating cash of US$148 million, on top of a separate reserve of US$45 million, meaning the system's administrators could continue at current levels almost until the end of the decade.
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