How to think about political risk in carbon markets
carbonrisk.substack.com
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 created through regulation. And so the response from some investors when observing the increase in carbon prices over the past couple of years is that well, the rules of the game are set by politicians, and so the rules can also be changed at any moment.
How to think about political risk in carbon markets
How to think about political risk in carbon…
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 created through regulation. And so the response from some investors when observing the increase in carbon prices over the past couple of years is that well, the rules of the game are set by politicians, and so the rules can also be changed at any moment.