In the parched moonscape of the Abu Dhabi desert, plans for the world's first carbon-neutral city are disintegrating. Masdar City was the centerpiece in Abu Dhabi's attempt to transform itself from oil powerhouse to the Silicon Valley of renewable energy. Global financial woes, however, are undermining the project's ambitious scope and putting its 2016 completion target in doubt. Developers are now planning to test-drive a portion of the city in 2013 and base further development on commercial response.

The original city plans were a dream for sustainable design nerds, which perhaps should have been the first warning. Walled and carless, it was to have relied on the region's biggest solar farm for power. In answer to the perennial Middle Eastern water problem, Masdar City was designed to house a desalination plant 80 percent more efficient than existing plants, quenching the thirst of 50,000 residents. The most futuristic tidbit -- and a tell-tale sign of an unobtainable urban utopia -- involved an underground network of sensor-driven "podcars."

Now, the only certain part of the development is the Masdar Institute of Science and Technology, a science and engineering university with a focus on alternative energy and sustainability. The institute's funding and governance is separate from the city's, though the two entities were intended to be closely linked. MIT has been a partner in the Institute from the beginning, and the head of its work with Masdar told the New York Times that students are still slated to move in this August.

Abu Dhabi's race for green-tech prominence is a smart strategy, even for a country with almost a tenth of the world's oil reserves. Few other nations have the ability to funnel billions of government funds into high-tech experimentation. Despite the lamentable lack of podcars, Abu Dhabi's newly modest ambitions of boosting green research should help make the Emirate's pursuit of this pipe dream worthwhile in the end.