The $13 billion trade in carbon offsets has also come under withering attack over profiteering and scam projects to cut greenhouse gas emissions.

Carbon offsets allow people and businesses to pay others to cut emissions of planet-warming gases on their behalf, and is meant to cut the cost of fighting climate change.

New UN data shows in the past three months UN approvers registered a third fewer projects compared to the same period last year, under a Kyoto Protocol scheme. New project applications, for example backing wind power or energy efficiency, hit a peak last July.

"We have to continue to invest in it and that means more hard work on the design as well as the operation of the system, what it doesn't mean is giving up on it," said James Cameron, vice chairman at Climate Change Capital, which specialises in climate-friendly investments.

Offsets have become a major plank of European Union climate policy, allowing polluters to meet limits on greenhouse gases by funding emissions cuts in developing nations such as China and India, under Kyoto's Clean Development Mechanism (CDM).

But EU officials say such imports will in future depend on similar compatibility with U.S. climate targets under a new administration, amid much U.S. scepticism.