Hi,
I’m Peter Sainsbury, and I’m the founder of Carbon Risk.
I am an economist who is passionate about the role environmental markets can have in making the world a better place. Leveraging my experience working for governments and in commodity market analysis I like to share knowledge and insights about carbon markets. On my Substack you'll find:
Analysis on recent developments in compliance carbon markets and the implications of recent policy developments.
How investors can benefit from carbon markets and their impact on broader asset universe.
What the latest economic, political, and technological trends mean for decarbonisation and meeting climate targets.
If you are fascinated by the role that carbon markets can play in combating climate change please consider subscribing to Carbon Risk — helping investors navigate 'The Currency of Decarbonisation'! 🏭
Ok, that was the elevator pitch!
If you’d like to know more then please read on.
On the rest of this page I’m going to give you a quick introduction about myself, why I’m writing a newsletter about carbon markets, the backstory to the Carbon Risk tagline, the nice things people have said about my work, and last but not least, how you can join me on this journey and help support Carbon Risk.
My earliest encounter with carbon markets was in the early 2000’s.
At the time I worked for an energy trading firm involved with improving access to electricity and power markets, and one of the environmental products we investigated was carbon. It was way too early, but the idea that markets could have a positive impact on the environment left a lasting impression with me.
It was only after working for the ‘dark side’ that I realised my economics skills could change the world for the better. I spent about 5 years working for an energy consultancy focused on oil supply dynamics. It was my first real deep dive into the world of oil and other fossil fuels, and the impact their extraction and consumption were having on the environment.
I joined an environmental NGO called WRAP in their economist team. Being at the intersection of economics, policy, and the environment was exciting. I helped policymakers - particularly those working for the UK Government - design new environmental policies and improve upon existing ones.
Perhaps it was the impact of the pandemic, but whatever it was, in early 2021 I realised that I needed to make a move and be my own boss. It had been on my mind – at the top of my internal to-do-list – for some time. And now I had the motivation and the opportunity to do something about it.
Carbon markets on the brain 🧠
I spent the next couple of months attempting to write a second edition of my book, ‘Commodities: 50 Things You Really Need To Know’. However, one chapter was three times longer than any other, and something about it was getting stuck in my head. The title of that chapter was simply, 'Carbon markets'.
It hit me that the price of carbon underpinned everything I had discussed throughout the rest of the book. It influences the speed with which companies divest from fossil fuels, the investment case for renewables, and the demand for copper to upgrade the power grid. It influences the speed at which commodities are transported around the globe and the investment plans of the ship owners. Carbon also determines the economics of green hydrogen, the environmental trade-offs of landowners in tropical rain forests, and the demand for lithium from the battery industry.
Fundamentally though I could see that the price of carbon would start to have wider, profound changes on the macroeconomic landscape and the incentives for investors. Inflationary pressures would begin to build as the cost of decarbonization would be passed through supply chains. Whole industries would see their business plans disrupted by new competitive pressures. High carbon prices would bring forward innovation and ideas previously thought unviable, opening new opportunities for investors in commodities, technology, and other industries.
Rather than carry on with writing the book, only for readers to see the fruits of my labour several months later, I decided to experiment and launch Carbon Risk instead. With a newsletter I would have a platform to tell readers about carbon markets place in the world, how I envisaged it in the future, and how investors and other market participants could benefit. That nugget of insight about carbon markets, developed more than 15 years earlier, had finally started to bloom.
The Currency of Decarbonisation 💶
Shortly after I began writing Carbon Risk, I realised that much of the media were lumping carbon prices along with commodities such as oil and natural gas. At the time the price of carbon in the EU emissions trading scheme (ETS) was on a tear and approaching €100 per tonne for the first time. The headlines in the press were along the lines of – “carbon - the best performing commodity in the world.”
That got me thinking. Is ‘commodity’ the right way of thinking about the carbon market? It is certainly governed by demand and supply, but other asset classes do too, and that doesn’t mean they are automatically commodities. Instead, I began to think about what an emission allowance (a permit to emit one tonne of CO2) represents.
It's important to remember that the carbon price embedded in emission trading schemes is a government construct. Without the commitment of the government (or other institution) to a set of emission reduction targets, market participants would not be willing to put a price on carbon. Trust is the bedrock of the carbon market. And so rather than commodities, I realised that currencies were the more appropriate asset class.
A strong carbon price is a signal that investors, businesspeople, and citizens trust their government’s commitment to combat climate change. A weak carbon price delivers the opposite signal; namely that the market has little trust in the government’s commitment. In the same way that trust in individual currencies supports investment, innovation and trade, trust in the carbon market helps to bring about the capital, skills and long-term planning that is required to help meet decarbonization goals.
The tagline to Carbon Risk was born - ‘The Currency of Decarbonisation’.
Unsure where to start? No worries. You can view the entire back-catalogue (over 300 articles) on the Table of contents [start here].
Here’s some nice things my subscribers said about Carbon Risk 🥰
How you can be a part of Carbon Risk 🧑🤝🧑📈
Free subscribers: All free subscribers get full access to 2-3 articles each month. In addition, free subscribers see a preview of the articles sent to paid subscribers.
Paid subscribers: If you decide to become a paid subscriber you are joining a community of like minded market professionals who are excited about this new asset class, the potential impact that environmental markets can bring to the world and the opportunity for wealth creation and diversification.
As a paid subscriber you will receive around 10 articles per month. The articles usually arrive in your inbox at 12pm UK time. Being a paid subscriber also means you can comment on articles, ask questions and suggest areas that you would like to hear more about.
A paid subscription to Carbon Risk costs £30 per month, or £240 per year (a discount of 33%). There’s even a 7-day free trial to get you settled in.
Group subscriptions to Carbon Risk are also available. Get a discount of 30% if you purchase two or more annual subscriptions.
Founding subscribers: Finally, there is a higher-priced founding member subscription tier available if you are interested in providing extra support for the newsletter. Founding member subscribers get the same benefits as regular paid subscribers—this is simply a voluntary way to donate a bit extra money (however much you want) to support the development of Carbon Risk.
Hopefully that has persuaded you to join me on this journey through the world of carbon markets. If you have any questions please get in touch - you can always connect with me on LinkedIn and Bluesky.
