Newsletter
The green light from the Golden State
The California carbon market opportunity
Newsletter
Newsletter
How institutional investment affected the structure of commodity markets, and what it might mean for carbon markets
It’s difficult to imagine today, but at the beginning of the century commodities were not considered a true asset class. That began to change after the publication of a report from two academics, Gary Gorton and K. Geert Rouwenhorst. Their report, ‘Facts And Fantasies About Commodity Futures’ supported the
Newsletter
How to think about political risk in carbon markets
All commodity markets are political, you just need to understand the game that’s being played. Whether it is oil, sugar or rice or something else, government intervention isn’t too far away. Environmental markets such as carbon are a particular type of political construction in which artificial scarcity is
Newsletter
The carbon price is an inflation hedge
As the price of carbon rises it will increasingly imbed itself in the economy, becoming an important driver of costs for business, and ultimately prices for consumers. The economy (including all the products and services we consume) currently holds a massive uncovered short position on carbon. Nearly every material good
Newsletter
German coalition proposals de-risk the path to higher carbon prices
This week, Germany's new coalition government announced a series of climate and energy proposals that will guide their policies over the next four years. Notably, the agreement includes a proposal to “ideally” phase out coal by 2030, eight years earlier than previously committed. In order to achieve this
Newsletter
The changing fortunes of the EU carbon market
Last week the European Securities and Markets Authority (ESMA) published their preliminary report on the functioning of the EU carbon market. The report was requested by the European Commission in light of high energy prices in Europe, and subsequent questions that had emerged as to the functioning of its carbon
Newsletter
Getting off zero: Institutional investment likely to give carbon markets the short squeeze
Getting to net zero means getting off zero. As of 2021, institutional investment in carbon markets is very low. That will need to change if the largest investors in the world want to hedge the biggest uncovered short position in their portfolio. Two factors that have limited the level of
Newsletter
Investors have a new way to help the environment
How can investors make a credible, technology agnostic and profitable difference to climate change? Up until now the only way that investors felt they could make a difference to the environment was to divest their holdings from companies thought to be responsible for climate change. Divestment, as its known, might