U.N. Climate Talks Fracture over Future of Carbon Markets

The use of carbon markets to curb rising greenhouse gas emissions was dealt a blow on Sunday after two weeks of United Nations talks on designing and reforming the mechanisms ended in deadlock.

The negotiations, held as part of U.N. climate negotiations in Bonn, Germany, made scant progress as envoys representing almost 200 nations tied reforms to progress under the wider discussions and remained entrenched in diverse positions.

The stalemate gives investors little sign that there will be a pickup in demand under the Clean Development Mechanism (CDM), the U.N.'s current main carbon market which has seen activity dry up after funneling over $400 billion into emission-cutting projects in developing countries over the past decade.

It also offers no guidance on how the growing patchwork of national and regional carbon markets worldwide will fit into a future international framework to tackle climate change.

U.N. Climate Talks Fracture over Future of Carbon Markets