"The level of interest we are currently witnessing is very encouraging," says Bjorn Tore Urdal, Senior Equity Analyst (Energy) at Sustainable Asset Management. He predicts, "Undoubtedly, the Middle East will develop itself as a main hub for capital allocation into the low carbon economy."

Some even find it surprising these developments did not come earlier. "It is surprising that this relatively gas-rich region has only 1 registered fuel-switch CDM project operating, and 2 with registration pending," says Richard Szudy, President of IDEA-Egypt and Director of PEI-Europe. "The opportunity in this regard is much greater than the current situation."

But hurdles remain. The Kyoto Protocol, carbon trading's legal basis, ends in 2012. "The market is awaiting certainty about what happens after 2012," says Darren Gurner, Senior Emissions Broker at TFS Green.

"Until then, it's difficult to show that CDM projects are viable with only two or three years of value from carbon credits." Dr. Armin Sandhoevel, CEO of Allianz Climate Solutions, agrees. "The global carbon market depends on a stable, transparent and long-term regulatory framework."

There is confidence though, and energy efficiency and renewable energy are key. Neighbours can provide learning points. "In smelters around 70% of energy can be saved by replacing the batch process with continuous process," says D. R. Kulkarni, Senior Vice President (Projects) at H and R Johnson (India). Many smelters are now being built in the Middle East.

The World Carbon Emission Reduction Summit, endorsed by UNOPS, is the first global event focusing on low-carbon investment opportunities and carbon finance in the MENA region, to be held from 20th to 23rd October 2008, at Le Royal Meridien Abu Dhabi, United Arab Emirates.

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