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Peter Chargin's avatar

John, you mention in note 11 that you're happy to share examples. I have some that come to mind - what are yours?

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Erik's avatar

If society is undervaluing the *cost* of carbon emissions, then isn't it going *long* rather than short?

That is, if the economy in general currently prices carbon emission at zero and expects that price to remain flat in the long term, but a tax on emissions will cause carbon emissions to have a negative value, then the value will go down contrary to expectations, which makes it a long position.

I understand that shorting carbon emissions (expecting the cost to go up, meaning the value goes down) would look like dumping unexploited fossil fuel assets, investing in green energy, and the like. Or maybe I'm confused and got it exactly backwards, that definitely happens sometimes.

Btw I found my way here via https://www.newyorker.com/news/annals-of-a-warming-planet/everyone-wants-to-sell-the-last-barrel-of-oil

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