Dubai plans to develop projects to cut carbon emissions just as an international agreement backing such projects is set to expire.
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Developing countries have earned millions of dollars through a UN scheme aimed at reducing the amount of carbon dioxide gas released into the atmosphere, which many scientists say leads to climate change.
"Today, if you tell any factory to go ahead and reduce the carbon, considering that they will [have] a cap-ex [capital expense] and there is no return, it's difficult to convince them to do that," said Waleed Salman, the chairman of the Dubai Carbon Centre of Excellence that was set up this year.
"We're going to facilitate and assess projects within Dubai or even outside Dubai in the GCC … so that carbon reduction is embedded within the process of any project."
The centre, which is employing experts from the UN Development Programme for the first two years of operation, plans to act as a consultant to companies looking to earn carbon credits, and market those credits to local companies such as Emirates Airline, Mr Salman said.
But Dubai is launching its campaign just before the Kyoto Protocol, the international agreement to combat climate change that came into force in 2005, is scheduled to expire at the end of next year.
The protocol forms the basis for the UN's clean development mechanism, which awards carbon credits to developing countries for cutting emissions.
Those countries can in turn sell the credits to international companies that want to set up carbon-emitting industrial operations.
Environment ministers and environmentalists from around the world are scheduled to meet in South Africa in November to hammer out a replacement agreement.
Without a clear picture of a post-Kyoto future, international investors have been reluctant to fund costly carbon-cutting projects that can take years to register and monitor before the UN awards credits.
Carbon credits have brought millions of dollars to countries including India and China but are relatively new to the Gulf region.
Masdar, Abu Dhabi's clean-energy company, earned its first credits last month at a gas-burning power plant in Taweelah, where it increased the amount of power and desalinated water it could produce for each tonne of carbon dioxide it emitted by reusing waste heat.
It earns credits for the annual reductions of 120,000 tonnes of carbon emissions.
The centre in Dubai plans to develop projects to cut as much as 5 million tonnes of carbon emissions by 2015 and twice that amount by 2020, said Mr Salman.
He is also the acting vice president for strategy and business development at the state utility Dubai Electricity and Water Authority (Dewa) and a member of the Supreme Council of Energy, the government entity that sets Dubai's energy strategy.
Partners in the centre, which include Dewa, the aluminium maker Dubal and the state-owned Emirates National Oil Company, are considering internal quotas for carbon emissions, Mr Salman said.
That target may be possible considering Dubai's many power plants, industrial factories and construction sites, said Shibu Davies, the regional general manager for TUV Nord, a German company that audits carbon-reduction projects.
"It depends on how aggressive the projects are and how aggressive this organisation is," said Mr Davies. "This timeline is very challenging, but it depends on how competent the Government is and how committed are these organisations."
Others in the industry in the UAE, where the first carbon credits were only earned after years of costly development, say Dubai cannot realistically hit the 5 million-tonne target in the next four years.
"The capacity is probably there but actually turning them into [credits] is not an easy process," said a UAE industry executive who asked to remain anonymous. "It's a long process and to generate that is pretty tough."
