A major European bank closed its US carbon trading business this week in a sign that 2012 is a “make-or-break” year for cap-and-trade programs designed to fight climate change.

London-based Barclays determined the US carbon market, currently comprised of a handful of states, is too small to justify the expense of a dedicated trading desk in New York, according to sources familiar with the decision. Barclays was a major player in US greenhouse-gas trading programs on the East and West coasts and remains active in Europe’s carbon market, the largest in the world. Seth Martin, a Barclays spokesman, declined to comment. Keep reading →