A surplus of U.N. carbon emission credits piling up across Central and Eastern Europe is threatening to destabilize nascent carbon markets across the world and dampen efforts to curb global warming, market experts and politicians say.
Already this year, sales of emission credits from countries like the Czech Republic, Latvia and most notably Ukraine have caused the price of a ton of carbon in Europe's cap-and-trade system to plunge by more than a euro, a significant drop, said Kevin James, the vice president of carbon finance at Climate Change Capital.
To date, some 147 million tons of the credits -- known in U.N. legalese as assigned amount units and in policy circles as "hot air" -- have been sold worldwide under the Kyoto Protocol, according to a recent analysis by Point Carbon. Ukraine alone is estimated to be in negotiations to sell an additional 450 million tons to Japanese firms, said Andreas Türk, a Kyoto consultant at Joanneum Research in Austria.
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