The global carbon market, once hailed as a promising solution to greenhouse gas emissions, may be dying a slow death, as turmoil in the European trading arena has at least 10 London banks scaling back or closing their carbon desks.

London, which had been seen as the main provider for Europe’s trading scheme, over the past four years lost its grip as workers employed on carbon desks fell by 70 percent, the Financial Times reported Monday.

The workers are part of the City of London Corporation, which provides government and policing services for the financial and commercial heart of Britain.

Trading schemes allow companies to buy and sell permits that allow emission of one metric ton of carbon without penalty. The idea is to provide enough economic incentives for industries to cut carbon emissions that are blamed for global warming.

But the scheme is failing because the price of permits has dropped due to an excess in the system, which reduces the cost pressure on polluters.

“The instability surrounding the ETS [emissions trading system] and the resulting crisis in demand for traded units … has jeopardized jobs in a number of banks and financial institutions,” a report by the Institute for Public Policy Research (IPPR), a left-leaning think tank, warned.

According to the report, Deutsche Bank closed its global carbon trading operations, UBS closed its climate change advisory practice and Barclays sold its carbon trading business.

Carbon trading activity has now switched to China, California and Australia, where activity is up.

“Most of the new activity is taking place in Asia, but London could excel once again if the ETS is fundamentally reformed,” said Will Straw of the IPPR.