Carbon traders whose employment prospects in Europe and Australia have all but dried up could be the next hot property in Asia, as China gears up to launch seven new pilot schemes and other trading hubs in the region build out their emissions trading teams.
London – once mooted the future global hub of this industry – has cut 70% of carbon trading jobs in the past four years. At least 10 London banks had reduced or closed their carbon trading desks amid turmoil in the European emissions trading scheme including Barclays, Deutsche Bank, UBS, JPMorgan and Morgan Stanley.
In Australia, the emissions trading industry had been given a huge boost under the Labour government, and this had led to all four of the major Australian banks – NAB, Westpac, CBA and ANZ – to build emissions trading teams.
But the new coalition government, which ousted Labour in September, wants to ditch the proposed emissions trading scheme (ETS) that was due to take effect in 2014, choosing to replace it with the direct action policy that would shift the emphasis (and costs) from business to government.
Warwick Peel, MD of recruitment firm Search 360°, is blunt about prospects for carbon traders in Australia: “Carbon trading in Australia is dead – for now.” His firm recruits professionals for sustainability organisations across the spectrum of companies, NGOs and governments.
But all is not lost. Although London has cut back dramatically and recruiters say the big banks in Australia have put their emissions teams on standby or deployed them into more traditional commodity trading roles, there are growing opportunities in Asia.
China is expected to have seven pilot pricing systems in place by 2015, followed by a national scheme, according to a new survey from the Australian National University, CleanBiz says.
“The survey found strong confidence that China will introduce carbon-pricing mechanisms in coming years, that the price of emitting carbon will rise over time, and that China will have both a national emissions trading and a carbon tax by the end of the decade.”
Other regions with active emissions trading schemes include California and New Zealand, although the island nation had hoped to join forces with Australia, and ultimately a global emissions trading market that would have linked the US, Europe and Asia Pacific. This has fallen by the wayside with the policy change in Australia and the chaos in Europe’s trading scheme.
John Revie, director - Asia Pacific of carbonjobs, says that right now the best opportunities are in Asia. “Singapore and Hong Kong have an increasing interest in building their emissions trading teams as companies look to offset future liabilities from their carbon and greenhouse gas emissions. The corresponding increase in marketplace activity offers additional opportunities for people who are able to relocate.”
And while China has a reputation for wanting people with local language skills in its financial services, Revie believes that the growth of the industry and the shortage of people with the requisite mix of skills and policy knowledge have the potential to supersede this demand.
And it is clear there is a big market. The International Energy Agency said earlier this month that the share of global emissions subject to carbon pricing policies was set to rise to about 33% in 2035 from 8% in 2012.
Revie says that medium-to-long-term job prospects in this industry are excellent, as there will be a shortage of people with the relevant academics and experience. The ideal energy trader has a maths or science qualification, strong quants skills, and has very detailed knowledge of emissions policies on a global and at a national level. Furthermore, he or she would benefit from strong corporate networks or strong business development skills.
But for now, Revie says, full-time carbon traders in Australia are relatively rare, and many are doubling up as commodity traders “to help achieve revenue and activity targets”. And he says that with the industry in Australia now effectively on hold until mid-2014 or beyond, redundancies may be inevitable if the new government succeeds in repealing the ETS
“But three to five years down the line, emissions traders will play a comparable, if not more critical, role than their commodity trading counterparts. And with the scarcity of people in this area, remuneration packages will increase accordingly.”