Banks Curb Carbon Trading

Greenhouse gases aren’t rising to the top of most agendas right now. Emission caps established under the Kyoto Protocol are set to expire at the end of 2012, and a United Nations-led effort to forge a new global compact is inching forward. The European Union, which runs the world’s biggest carbon trading market, has other things on its collective mind. One side effect of all this is a 47 percent drop this year through Dec. 12 in the value of C0₂ allowances issued under the EU’s Emissions Trading Scheme. The permits, which mostly go to utilities and other industrial companies, can be banked or traded.

The biggest banks, trying to recover from trading losses and a regulatory clampdown on using their own money to make bets, are scaling back their carbon trading operations. “People are leaving the industry because they’ve been fired or because they see no prospects,” says Emmanuel Fages, head of energy research for Europe at Société Générale in Paris. “That is the sad story.”