CARBON EMISSIONS MONTHLY TEST FUTURES c1

Carbon traders dust off CVs as market stagnates - RTRS

Today 11:56

(Published by Thomson Reuters Point Carbon)

LONDON, Jan 31 (Reuters) - A growing number of traders, brokers and advisors are looking for jobs outside traditional carbon markets amid weak prices and consolidation of the sector into fewer hands, recruitment consultants told Point Carbon News.

Before the financial crisis of 2008, when the political backing of carbon markets was at its height, trade in carbon dioxide was hyped as having the potential to become even bigger than crude oil.

But the willingness of some of the world’s biggest financial institutions to have a high profile in the sector - and staff numbers to match - has been sapped by a succession of setbacks.

These include the failure to agree a meaningful international climate deal in Copenhagen in 2009, growing criticism of the Kyoto Protocol’s carbon markets and a series of scandals involving fraud in the EU Emissions Trading Scheme.

“If people want to find work in this market they have to be prepared to be mobile. The carbon market is now opportunity-short and candidate-long,” said Mike Brennan, chief executive of Human Capital Resources, a UK recruitment consultancy that specialises in carbon and climate finance.

Although overall traded volume in the carbon market grew 19 percent in 2011 – according to analysis from Thomson Reuters Point Carbon – the monetary value of transactions only grew 4 percent last year to 96 billion euros ($125 billion).

Record low prices and uncertainty about political support for carbon trading have eroded faith that the sector offers secure employment.

Efforts are now afoot at EU level to intervene to support prices, but trading houses are still scaling back operations.

In the past year, Barclays Capital, Bank of America Merrill Lynch, Mercuria, Natixis, Societe Generale and Tullet Prebon have scaled back the size of their carbon desks amid disillusionment that emissions trading has failed to live up to its potential.

And despite the perceived availability of carbon trading jobs with utilities, which day-to-day are the biggest buyers of EUAs, some power generators such as Switzerland’s Alpiq have cut the number of staff on energy trading desks.

Collapsing demand for U.N offsets in Europe, and uncertainty that these credits will be needed in emerging carbon trading schemes, means the project-based carbon market is also fast shedding jobs around the globe.

The price of Certified Emission Reductions (CERs) have fallen from all-time high of around 23 euros in 2008 to a record low of 3.28 euros earlier this month, hitting the share price of listed offset developers Camco and Trading Emissions.

But the development of wind farms, hydroelectric power, biomass and energy efficiency in poorer countries, where demand for cleaner energy is booming, has become less dependent on revenue from selling CERs, according to developers.

With the EU market arguably going through its lowest ebb since its inception, those with specialist carbon knowledge are looking elsewhere to advance their careers in places such as China and Australia.

“Chinese pilot trading schemes are still at a very early stage of development. So the focus for project developers probably turns to Australia, but there may be many projects seeking relatively few buyers,” said Garth Edward, head of carbon trading at PetroChina.

Amid gloom in Europe and uncertainty in Asia, North America is offering a beacon of hope through California’s launch of a carbon trading scheme by the start of 2013, with markets in U.S. and Canada doubling in size to $782 million last year, according to analysts.

California, which will be part of the wider Western Climate Initiative of western states and provinces to use markets to cut emissions, will give preferential treatment to domestic offsets, proving a boon for North America-based project developers.

With opportunities dwindling in longer-established carbon markets, those with expertise are turning increasingly towards activities such as measuring the carbon footprint of companies, said Olivia Anderson, a consultant with recruitment firm Acre.

“The climate and clean energy-related sectors aren’t as buoyant as they once were but there are still opportunities if people broaden out from carbon markets and climate finance,” she said.

(Reporting by John McGarrity) ((john.mcgarrity@thomsonreuters.com))