The Developing Carbon Financial Service Industry : Expertise, Adaptation and Complementarity in London and New York

This article looks at the role of market complementarities in developing new carbon markets. I argue that markets are composed of social as well as economic networks. The reliance of these networks on social connectivity and proximity makes the development of new markets particularly suited to established financial centers like London and New York and reinforces the importance of these centers. London and New York provide not only resources and financial infrastructure, but also institutional proximity that develops routines and practices between complementary firms. I investigate three levels of complementarity between (existent and new) markets and within the new carbon markets: the complementarity of expertise and information, the complementarity of institutions and services and the complementarity of market systems. Case studies constructed from expert interviews in London and New York are used to support the argument. This article concludes by commenting on the dialectic nature of financial agglomeration and market embeddedness