In an effort to regulate the release of greenhouse gases, particularly carbon dioxide, the European Union instituted a carbon cap-and-trade program. Under such a program, various companies are provided a cap on the amount of greenhouse gases they can legally admit. Those wishing to emit additional gases must purchase emission credits. While initially sold by the EU government, credits can be traded on a number of bourses, such as the European Climate Exchange. Other governments have also implemented climate exchanges, on which emissions are traded voluntarily. Trades of these emissions credit, like other securities, must be placed through a broker. Becoming a "carbon broker," of which there are a limited number, remains difficult.
- Skill level:
Learn the business. Although carbon credits are a new product, the practice of trading carbon on an exchange closely resembles the trading of other commodities, such as oil, gold or corn. Therefore, it is important for carbon traders to have a thorough understanding on the business and economic principles necessary to be a skill investor. While in schools, carbon traders should take many of the classes recommended for a person hoping to enter finance or business, with an emphasis on global trade.
Get environmental experience. According to Mother Nature Network's article "Portrait of a Carbon Trader," many carbon brokers combine an education in business with professional experience in a field that familiarises them with environmental regulation. More cap-and-trade programs that mandate the trading of carbon may be implemented by governments in the future, greatly expanding a burgeoning industry. It will be immensely helpful for carbon brokers to have some understanding of how environmental law affects the actions of carbon buyers and sellers.
Apply to firms that broker carbon. Because the trading of carbon remains a relatively small field, many companies that trade in carbon may not be hiring carbon brokers. However, to get in on the ground floor when a position opens up, you can apply to work in another position at one of the larger financial firms or brokerages, preferably one in which you broker securities or derivatives. Broker Tullet Prebon trades in carbon, as does investment bank J.P. Morgan.
Get assigned to a carbon trading desk. When a position on the carbon brokerage does open up, attempt to make an inter-company transfer to the carbon desk. Before you interview for the position, prepare a summary of your education, background and work for the company to date. Make sure you've kept up to date on the latest trends in greenhouse gas regulation and carbon trading.
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