Developing nations could make $$$ from carbon trade

The World Bank reports that developing nations could earn as much as $100 billion per year by 2050 from selling carbon credits. Selling and trading carbon credits is a mechanism sanctioned by the Kyoto Protocol that allows developed countries who have signed onto the agreement to meet their national emission targets by funding clean energy projects in poorer, developing nations.

The carbon trade has made about $5 billion over the past two years and could grow twenty-fold in the next 40 years, as developing countries invest in renewable energy and sell credits to developed countries.

However, the price of carbon credits has crashed to below 10 euros in the past few weeks, down from a high earlier this year of 30 euros.

African countries have yet to see significant investments from the carbon trade, mainly because carbon prices are normally 20% lower there than the average global price. The perception of high business risk has also lowered investor interest in the continent, with most of the projects taking place in South Africa and Egypt.

Although the United States hasn't signed onto Kyoto, there is a voluntary, legally binding emission trading system called the Chicago Climate Exchange.