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Pay gap between carbon and energy traders halves

Pay gap between carbon and energy traders halves in just three years
Some senior carbon traders now earning more than energy traders
Pay for carbon traders grows twice as fast
Carbon market grows tenfold in five years
The pay gap between carbon and energy traders[1][1] has halved in just three years and is now just 12%, says Selby Jennings, the financial recruitment specialist. Carbon traders now earn approximately 122,000 on average compared to 139,000 for energy traders.
According to Selby Jennings, carbon traders would have been earning 20-25% less on average than energy traders before the credit crunch (2007).
Pay for carbon traders increased almost twice as fast as pay for energy traders over the past three years. Pay for carbon traders jumped by 63%, (from 75,000 to 122,000) compared to 32% for energy traders (from 105,000 to 139,000).
Selby Jennings says that some senior carbon traders are now earning more than equivalent energy traders something which would have been unheard of a few years ago.
According to Selby Jennings, mainstream financial institutions increasingly see carbon trading as a fast-growing and highly profitable market. Barclays Capital recently announced the 98 million acquisition of Tricorona, a Swedish carbon trading company. JP Morgan bought carbon trader EcoSecurities for 123 million in September 2009.
Figures from the World Bank show that the global carbon market has increased by more than tenfold over the last five years. The value of carbon traded in 2009 was $144 billion, compared to about $10 billion in 2005. The global carbon market was worth $126 billion in 2008.
Adam Buck, Managing Director of Selby Jennings, comments: The pay gap between carbon and energy traders is rapidly closing and is now barely double digits. We are now starting to see a handful of the highest performing carbon traders earning more than equivalent energy traders.


Basic salary range 2009

Bonus range 2009


Basic salary range 2009

Bonus range 2009

Junior energy trader



Junior carbon trader



Mid-level energy trader



Mid-level carbon trader



Lead energy trader



Lead carbon trader



Despite bouts of uncertainty about the future of the carbon market, it has continued to expand strongly through the recession and is now coming of age.
As more countries participate in carbon trading, and the size of the market grows, traders with experience in this market will be in much greater demand. This will further narrow the pay gap.
Selby Jennings says that because countries such as the United States and Australia do not have a compulsory system of allowances for major carbon emitters this has limited the scale of the global market, and therefore the amount of money carbon traders can expect to earn.
Adam Buck says: This is likely to change in the near future. There is currently an energy and climate change bill pending in the US Senate, which could introduce a cap and trade system for carbon emissions. The bill could receive renewed impetus following the recent oil slick in the Gulf of Mexico.
Selby Jennings says that many energy traders take pay cuts to move into carbon trading as they seek to establish themselves in a rapidly growing financial market. There has been an explosion in the number of carbon trading brokerages in recent years, with many working to commission rather than a flat fee.
Adam Buck says: Traders are taking a discount to move into the carbon market, but this is likely to become less commonplace as the market establishes itself. When we get the post-2012 legal framework in place, the market is likely to take off. Some firms are already investing in post 2012 projects.


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