In the wake of the financial meltdown, some have wondered about about the broader implications of the disappearance of Lehman Brothers’ carbon trading desk. And the answer to that question, at least, is easy: there are no broader implications to the disappearance of Lehman Brothers’ carbon trading desk.
This is true for a variety of reasons, not least among them that Lehman Brothers was a small player in the carbon markets. The center of gravity in the carbon-trading world is in Europe. Beyond that, the carbon market itself is just one corner of the energy finance universe. So Lehman is a corner of a corner, and anyway the disappearance of a single trading desk is nothing really to fret over.
A trickier question is what affect the broader issues in the financial markets have for the development of clean energy. And, well, it’s hard to say, as all sorts of countervailing forces are at work.
It helps to step back briefly and consider what is actually going on in the economy. The Freakonomics blog recently offered up one of the most lucid discussions of the ongoing financial crisis. I recommend the whole thing, but in a nutshell: