December 5th, 2011
Econintersect: The failure at the end of November for climate change talks to reach agreement on any meaningful action to implement further controls on carbon emissions has produced a side effect on employment. Jobs have been lost in the carbon emission permit trading businesses of the brokers and banks as well as in industries that deal with climate related processes and equipment. According to an article in The Guardian, the hope that new agreements will be reached in 2012 have been dashed. Expectations now are that new agreements are unlikely before 2016 with no implementation before 2020.
Investment banks are cutting traders and analysts in climate-related businesses as a slump in shares and carbon emission permits coincides with a deadlock in international climate talks.
JPMorgan Chase & Co. (JPM) Managing Director for Environmental Markets Odin Knudsen left his post in New York by mutual accord after his team was shrunk, while UBS Securities LLC fired Vice Chairman Jon Anda and his Climate Policy Group co-workers, Anda and Knudsen said in interviews. Ben Lynch left his London job as an alternative-energy analyst for Commerzbank AG (CBK) and it was taken over by a utilities analyst, company spokeswoman Claire Tappenden said. The departures took place since September.
Editor's note: Russell Huntley has asked Econintersect a couple of questions: "Another financial instrument to go kaput? Can one get a CDS like hedge for carbon credits already bought?"
Econintersect reply: Why not add CDS on carbon credit related securities and derivatives? After all, doesn't the world need to have more derivatives to get total notional values up to $1 quadrillion? At last accounting the total was "only" $707 trillion and more than 10x the world's GDP. How can the world be truly wealthy unless we drive this number to 20x (or 30x, 40x or higher)? What could be wrong with pumping up leverage a few more orders of magnitude?
Econintersect asks forgiveness for encouraging Russ Huntley's sarcasm and then adding to it.