Odin Knudsen, the JPMorgan Chase & Co. (JPM) managing director for environmental markets, resigned last month as the largest U.S. lender scaled back its climate-related practice.
Knudsen, 68, left the New York-based lender by mutual agreement after it became apparent the U.S. was not going to join a global system to trade carbon emissions, undermining the bank’s business plans, he said in a Nov. 21 phone interview. JPMorgan spokesman Brian Marchiony declined to comment.
“We’d all been geared up for the U.S. coming on board at some point,” Knudsen said. “The market pretty much died out.”
Knudsen, who once headed the World Bank Carbon Fund, is the second senior carbon markets banker to announce his departure this month after emissions credits and clean power stocks plunged in 2011. Investors deserted those markets as the United Nations plan for a global emissions cap remains gridlocked and European governments that subsidize most clean energy projects are battered by the sovereign debt crisis.
Benchmark EU carbon-emission permits have dropped 40 percent this year, falling to a record low today, while the Bloomberg Industry solar energy stocks index (BISOLAR) plunged 68 percent, undercutting investor interest in buying research and advisory services.
The value of carbon trading fell 8 percent to 23.7 billion euros ($32 billion) in the third quarter from the previous three months as the price of European emission permits slumped, according to Bloomberg New Energy Finance data.
A record 1.5 billion tons of EU carbon permits was traded on the ICE Futures Europe exchange between July and September, exchange data show. Trade in UN carbon credits was a record 348 million tons in the same period.
UBS AG (UBSN), the Swiss bank that lost $2.3 billion from unauthorized trading this year, in September shut its climate- change advisory practice and fired the staff, according to former vice chairman of the securities unit Jon Anda, who ran the team. Anda was fired along with his team.
Clean-energy analyst Ben Lynch left Commerzbank AG in the past two months, according to spokeswoman Claire Tappenden. The industry is being covered by Lauren Licuanan, a power analyst.
Knudsen, who worked 27 years at the World Bank before joining JPMorgan on Sept. 11, 2007, originally planned to leave earlier this year and was persuaded to stay on to assess the bank’s own environmental impact.
By the time he quit the environmental markets business “there were only a few of us left,” he said. The unit had employed several “tens” of people around the world at its height. He declined to give specific details of staffing numbers because the information is confidential.
The U.S.’s failure to join a global market “was a large disappointment,” Knudsen said. “You’re starting over again.”
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