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Almost twelve months to the day since I published this article, the price of UK emission allowances (UKA’s) has fallen by over 50% to a mere €35 per tonne. The malaise is even more striking when you consider that just across the English Channel, the EU carbon market continues
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Many companies publish emissions data on a voluntary basis, but with no consistent methodology it can be difficult to know whether an individual firm is performing well or not. Mandatory disclosure requirements increase the degree of transparency, cutting the considerable search costs involved with analysing one company’s emissions against
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Welcome to Carbon Risk — helping investors navigate 'The Currency of Decarbonisation'! 🏭 If you haven’t already subscribed please click on the link below, or try a 7-day free trial giving you full access. By subscribing you’ll join more than 3,000 people who already read Carbon Risk.
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The poor state of French nuclear generation was one of the most important stories in European energy markets during 2022. In the aftermath of the Russian invasion of Ukraine, when Europe’s supplies of natural gas were curtailed and longer term supplies were under increasing threat, what the continent really
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The case for controlled burning carbon credits
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Conventional approaches to pricing carbon fail to capture risk of climate catastrophe
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*** I’m taking a break from carbon markets next week. I will be back at my desk in early September *** Over the next few years, one of the main drivers of EU carbon prices will be passed from utilities to industrials. First gradually, then suddenly. Hedging demand by utilities is
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We typically think of an individual company’s greenhouse gas (GHG) emissions being pigeonholed into one of three categories, or scopes as they are known. Scope 1 covers direct emissions from a company’s own operations. Scope 2 covers indirect emissions resulting from the generation of energy that a company
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Over the past few months I have reposted a number of articles from the Carbon Risk archives. The subscriber base for Carbon Risk has grown significantly over the past year and so many current readers probably haven’t seen some of the earlier articles. Many of the posts are arguably
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The latest COT report (w/e Friday 11th August) shows that investment funds increased their short position by 4.9 million EUAs verus week earlier to 11.3 million EUAs. It’s dangerous to be too heavily exposed to lower carbon prices this time of year. The risk of a
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Despite signs that inflation may have peaked in Europe, investors are naturally fearful that another bout may be lurking around the corner. Expectations over the future direction of inflation are pivotal in determining investor allocation between various assets - cash, bonds, equities, currencies, commodities, etc. Nevertheless, asset markets tend to
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The case for carbon-linked bonds