Carbon market participants are braced for the effects of a dramatic reduction in risk capital available to the sector, as the full impact of the credit crisis and a looming recession make themselves felt.
Concerns are growing that carbon prices could be set for substantial short-term falls, having held up well in comparison with other commodity markets. But, while the credit crisis has injected considerable uncertainty into the near-term outlook for carbon, longer-term policy questions are still causing the most anxiety.
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