Carbon emissions will drop amid possible recession

If European economies fall into recession, carbon emissions are likely to fall as a result, analysts have claimed.

This, in turn, will see a fall in the demand for emissions payments, as well as their prices, said representatives from Deutsche Bank.

A fall in the price of carbon permits would be a boost to green lobbyists and groups urging firms to take a greener approach to their operations, relayed Reuters.

The bank also predicted that a drop in price would see industrial carbon emissions fall by 100 million tons from two years previously.

Research notes published by the bank state: "We think that market inefficiencies could keep EUAs below 30 euros per ton until 2009."

This morning, recession fears were back on the agenda as it emerged that European share prices fell overall since governments initiated strategies to deal financial crises at the beginning of this week.