Good Derivatives: A Story of Financial and Environmental Innovation

Chapter 22

The European Climate Exchange

The Jewel in the Crown

Where to elect there is but one, ‘tis Hobson's choice—take that, or none.

—Thomas Ward¹

My mother's stories about Europe had always fascinated me as a child. She often spoke of sailing on the Mauretania on the one trip she made back home. She regaled my family with the ship's beauty and elegance—its polished mahogany bars, exquisite stairways, and its record time in crossing the Atlantic. I lived and breathed my mother's glories, but it wasn't until I was 33 that I made my first trip to Europe and realized what had inspired her stories. I was determined to visit the great capitals of Europe and walk in my mother's footsteps, not as a tourist but as a businessman and an academic.

Tapping into the European Psyche

I made my first trip to London in 1979. Shortly after landing, I discovered that the baggage handlers were on strike. Since the carousels were not working, we had to pick through piles of luggage that the management brought out by hand. This unlucky incident reminded me of a satirical line from the Peter Sellers movie, I'm All Right Jack, a comedy that satirized the trade unions, workers, and their bosses: “We do not and cannot accept the principle that incompetence justifies dismissal. That is victimization.” The Brits certainly knew how to make fun of themselves.

The United Kingdom, and London in particular, had changed dramatically during the Thatcher era. Although the economy was still bad, the country ...