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Carbon Scarcity, Market Linkage, and the Next Chapter of Climate Finance - Mark Lewis

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I um I've been working on this piece

about Hamlet and climate change and

>> Oh, really? really really going into it

really going into it in a lot of depth

and I keep finding all these

similarities. It's quite extraordinary

when you really uh dig deep.

>> So, uh

>> Oh, fantastic. History repeating itself. >> Yeah,

>> Yeah,

>> I think I bet if you looked into the

Mayans, you'd also find similar similar parallels.

parallels.

>> Maybe that's my next project. I'm off to

Mexico next week, so

>> Oh, really?

>> Yeah. Yeah, I got a mangrove project in

Verarac Cruz. So

>> Oh, cool, cool, cool, cool. Um, Mexico

is epic as well. Fantastic.

>> I used to live there many years ago, so

it's one of my favorite places.

>> Oh, wow. Did not know that. There you go.

go. >> Yeah.

>> Yeah.

>> What what took you to Mexico?

>> Well, I to after I graduated, I didn't

know what I wanted to do, so somebody

said, why don't you go teach English in

Mexico? So, that's what I did. And uh

but that was very different world in

those days. That was 1988.

Oh wow.

>> So there was no no concerns about oh I

have to worry about my career or my CV.

Just okay I'll do whatever and then I'll

come back and we'll see what happens and

we'll just figure it out.

>> The nonlinear path to carbon market.

All right, welcome back to this week in

carbon. I'm your host Eddie Smith

alongside Renee Velasquez. And today

we're thrilled to have on Mark Lewis.

Mark, thanks for joining us. Really

looking forward to today's discussion.

And before we dive into this week's

topics, I would love to introduce you to

the audience

>> and maybe ask if you could share a bit

about your background and your career

path and maybe what you've been up to uh

in in the recent months.

>> Sure. Uh well, first of all, thanks very

much Eddie and thanks very much Renee

for the invitation to uh to be on the

show today. Um it's it's a real pleasure

to be uh on on this uh leading carbon

market podcast. think you guys do great

work. So, uh it's fantastic to be with

you again. Um just briefly on my

background. So, I've been covering uh

carbon markets since 2005. At that time,

I was with Deutsche Bank. I broke into

carbon markets because I was previously

a uh utility analyst on the sell side

doing equities. And um when the ETS

started in 2005, I did this deep piece

of work on the impact of uh carbon

pricing on the profitability of the

European generation sector. And

unbeknown to me at the time, but it was

a wonderful uh boon in my career. Um

Deutsche Bank was in the process of

setting up a commodities team and a

carbon trading team. So they asked me to

move over from equity research into

commodities research. I think in fact I

was the first full-time dedicated

sellside analyst of carbon on the

street. So um that was uh amazing. We

rode the wave of the first uh carbon

market boom uh carbon markets 1.0. That

would be between 2005 and I would say

2012. A lot of the banks then pulled

out. Um I I uh left Deutsche, reinvented

myself as an ESG analyst uh for a few

years and then when the European

Commission came out with the idea for

the market stability reserve, I thought

okay in 2017 this is really going to

drive carbon pricing back to where it

needs to be if we're to achieve the

climate change targets. So uh I ended up

moving on to the buy side of the

industry, spent some time at BMP and

then most recently at Anderan Capital as

the carbon research specialist there and

um I just left I left at the end of May.

Um, I wanted to take some time out and

think about uh what comes next. And uh

what I do know is I want it to be 100%

carbon focused because I think the

outlook for both compliance markets and

what I call quasi compliance markets uh

voluntary credits that have

corresponding adjustments, so-called

article six credits, is extremely

exciting over the next 5 years. And I'm

sure we'll be getting into that in the

course of this conversation. So, uh

that's how I came to it. uh to where I

am now and looking forward to explaining

how I think this all shakes out over the

next five years with uh with you guys.

>> Yeah. Yeah. Well, thank you so much for

you know for the brief uh you know

explanation. You've had amazing career

in the space and congrats on exiting on recently.

recently.

>> Yeah. Thank you.

>> So the first topic will be on EUAs and

the outlook for EUAs. And I read a

couple of different uh articles with

differing opinions,

>> right? So

currently EUA is trading around 70 to 75

a ton and analysts are widely

anticipating rising prices through 2025

and beyond. So there's some bullish

optimism underpinned by uh tightening

supply and sustained demand growth

driven by you know recent EU climate

policy reforms. And you know, you have

Mcquaryy Bank uh their latest outlook

sees average UA prices of €75 in 2025

and 95 by 2026. So a notable upward

revision, but >> yeah.

>> yeah. >> Yeah,

>> Yeah,

>> I also read that a lot of investors have

been increasing their bearish bets on EU

carbon allowances last week amid the

looming threat uh by US President Trump

to impose import duties on the economic

block uh from August. So I saw that

money managers were increasing the

number of short positions during the the

weekend of July by the end of uh you

know equivalent of 2.2 million

allowances. So their large largest

weekly increase uh since early April. So

given this uh you know landscape I I

would love to ask and hear your thoughts

on the key drivers behind uh the bullish

outlook for EU carbon allowances and

maybe some of the reasons that folks

have some bearish sentiment.

>> Sure. Um well I I think the main bullish

argument is is very simple to

articulate, right? I mean, uh, there's

two things you I always I always tell

anybody who's new to the carbon market,

to the to the European cap and trade

market, the EU ETSs one as we're now

calling it, and we'll get on to ETSs2

later, but um, is it it has two uh,

distinguishing features from any other

commodity market, right? Number one, the

supply of the commodity in question is

fixed and declining, and it's on a

visible trajectory. We know what happens

to the supply over time. There's there's

no other commodity market where that's

the case. If you think about the oil

market, I don't know what the supply of

oil is going to be next week, never mind

next year uh or in 10 years. Here you

have almost or certainly as close to

perfect visibility as you're ever going

to get in a commodity market in terms of

the supply. So that's the first

distinguishing feature. But the second

one is the one I think that really makes

for the long-term structural bull

argument. And that is this. There are no

natural sellers in this market, right?

You think of any normal commodity

market, somebody is producing it and

somebody is buying it. There's a natural

seller and there's a natural buyer. Here

there is no um natural producer as it

were. what you have is a regulator who

auctions allowances or makes them freely

available albeit in declining amounts

going forward because um we're moving

away from free allocation to industry

towards uh full auctioning by 2034.

Um but the key point here is um if you

want to stay in business as a power

company or a steel company or a cement

company any of the industries that are

covered by the scheme um you have to buy

these allowances. So there are only

natural buyers, no natural sellers. So

you put those two uh dimensions of the

equation together. On the one hand, a

declining supply now we know it's

declining to zero by 2040 and the fact

that there are no natural uh sellers.

Then what you have here is a market set

for long-term bullish momentum. Right?

That that that's what that tells you.

Now um timing is everything in markets

right? You know Einstein said that uh

physics is the search for truth in space

and time and John Maynard Kane said that

speculation is the search for truth in

price and time. Okay. So timing is

everything and um undoubtedly per your

question on the intro there Eddie um

there will be moments where uh prices

can fall, fluctuate, decline and clearly

President Trump's um continuing dance

around tariff levels not only with

Europe but with the rest of the world

because there's the impact on the rest

of the world to be considered as well.

It's a secondary order effect on the

European economy. Germany, don't forget,

is the world's largest industrial

exporter. So, particularly sensitive to

global export uh trends. Um undoubtedly

this is a concern, but um uh we've seen

before that that um the concern around

the tariffs has perhaps been a little

bit overdone and and there is normally

some kind of deal done. So, I think

notwithstanding the fact that prices can

can suffer short-term uh volatility and

short-term fallbacks, I think the setup

over the next 18 months to two years, if

that's your kind of investment horizon,

is is very bullish in the sense that we

we are entering a period now on the

numbers that I model in my model where

we're into five years of consecutive

annual deficits and in particular for

2026 In 2027, you're looking at

tripledigit deficits, which means that

the um demand will outweigh supply

significantly. That will reduce the uh

level of allowances in the market, the

so-called T-ac, the total number of

allowances in circulation. And in any

market where the inventory is declining,

because that's what the TAC is. It's

it's the inventory of carbon allowances,

um prices go up. So um one has to be

aware of of the threat of recession. Uh

we have to keep following the news

regarding tariffs and so on. But the underlying

underlying signal

signal

for all the short-term noise about

tariffs and so on is that um this market

is going to get a lot tighter between

now and 2030. Um that's the first thing.

And I would make one other point um in

terms of being structurally bullish on

this market over the next three, four,

five years. Um industry that we have to

take into account behavioral

uh psychology. And what we have in this

in this market is two kinds of players really.

really.

You have the utility companies or the

generation companies who ever since 2008

have had to pay for all of their

allowances. Right? So they they've been

auctioned uh since 2008. What that means

is they've typically hedged their uh

buying requirement on a rolling

three-year basis and they have been the

main driver of pricing in this market

which is why um the the fuel switch between

between

um coal and gas has been the proxy the

kind of shorthand way in which traders

have looked at where the price quote

unquote should be at any given moment.

you look at the carbon price say it's €7

a ton and then you look at the implied

fuel switch and you say that's maybe

that's 50 or maybe that's 100 and

therefore you say well the price should

be higher or lower as a function of

that. Um we're now moving into a very

different market where it will no longer

be the utilities that are driving uh

price but industry and that's for two

reasons. One uh the power sector is

decarbonizing very quickly anyway. you

know, the the the renewables revolution

means that there is uh no longer much of

a need for fuel switching per se in the

power sector. And there's there's not

much of it to be done. So much of the

coal has already been taken off the

grid. So you look at a market like the

UK, I know it's a separate market, but

it it's a a proxy for the European

market more broadly because this is

where the whole of Europe is going.

There's no more coal in that market. You

only have gas. You can't switch between

between coal and gas. That's the way

Europe is going. there's less and less

coal on the grid. So, fuel switching

much less important. Um, and what that

means is it's industry that will drive

pricing. And industry will drive pricing

for two reasons. One, because they're

losing their free allowances

progressively over the next five years.

So, they will have to be in the market

more actively. That's what I mean by

behavioral psychology. Their entire

behavior with regard to this market is

going to change. And of course, it's

going to change because if you get your

allowances free every year and and it

matches the number you need or in until

quite recently has been in excess of

what you need, you don't need to worry

about hedging. But now you have a

situation where they know two things.

The cap is declining. So the overall pie

is shrinking and the share of that pie

that they receive for free is also

shrinking and that falls to zero by

2034. Um and then the cap overall falls

to zero by 2040. So at some point I

expect over the next 18 to 24 months two

or three four or five of these big

industrial companies that have large

amounts of carbon to hedge will step

into the market and start doing that.

And once that happens the pricing

dynamic in this market changes very

significantly I think.

>> Yeah. Yeah. Certainly. And next month,

>> you know,

>> do you think that some of the key

changes under the fit for 55 package,

the 2023 revision, like you know, uh

sectors like maritime shipping and uh

intraEU aviation uh increasing demand

plays a significant role in this kind of

changing landscape.

>> Um also the re repower EU program maybe

wanted to touch on the policy. Yeah.

>> That's driving this uh driving this market

market

>> of course. Well, I think to take those

questions uh one by one. I mean first of

all the inclusion of uh maritime uh is

50% of maritime uh emissions as we know

from uh i.e the 50% of uh all emissions

from ships entering and leaving uh the

European Union which is different from

how they've done aviation and we can

maybe come back to that in a moment but

um in terms of shipping it helps at the

margin for sure you know because the cap

for aviation um sorry for maritime

emissions is um uh also declining uh

with the overall cap and um it started

actually uh at a tighter level than it

did for industry. many years ago

obviously because the European

Commission has learned a lot uh in the

interim. So it helps at the margin but I

don't think it's in and of itself the

maritime sector is big enough to make I

is so gamechanging but at at a point in

the cycle of this in um market where the

cap now is really declining very

aggressively every year if you tighten

it incrementally by adding new sectors

that are also short clearly at the

margin that that makes the outlook even

more bullish. So I think yes is is the

answer there in terms of the addition of

of maritime aviation is a trickier one

because you know in theory what the

directive says is that or in law what

the directive says is that all flights

entering and leaving the European Union

in addition to flights within the

European Union should be covered by the

scheme. Now what happened was uh at the

risk of telling your audience something

they're already very familiar with is

that in 2012 because of political

pressure from other countries like the

United States, India, uh Russia, China

and so forth um the the European Union

agreed to so to the so-called stop the

clock measure where they said okay we

will um suspend the idea that all

flights entering and leaving the

European Union uh have to be covered.

uh as long as the inter international

civil aviation or organization AO the UN

body that governs aviation agrees to um

some kind of voluntary effort that is

meaningful and substantial to reduce

emissions so that um they're not being

given uh a free pass as it were. Now

this is why we have Corsia

uh and of course that could become a

very interesting dimension to the the

broader global carbon market uh in the

next few years. I suspect it will do in

fact. Um but for the time being we now

await the key decision from the European

Union which I I guess we'll get next

year or the year after as to whether or

not it is satisfied that Corsia is

meaningful and substantial such that

they are happy for it to continue being

the way in which global or international

aviation that comes in and out of the

European Union u meets its carbon

obligations. Um, we'll have to wait and

see how that plays out. I don't think

the politics have changed. I think it is

going to be difficult for for Europe to

unstop the clock as it were or or or

start the clock running again because um

there will be political pressure

undoubtedly from all these other major

jurisdictions. Um so we'll we'll wait

and see on that. What I would say is if

Europe said, "Sorry, we don't think

Corsier is is um meaningful enough and

we're going to start the clock running

again and every flight coming in and

leaving the huge shift countries, then

um that would have a a major impact on

the tightness of the market. That would

be very bullish indeed." So um let's

wait and see. That's not my base case

because I think the politics of that are

very complicated. Um, so, um, I think

everything that was in the FIFA 55 package

package

is supporting this idea of the upward

trend in in prices because and and

that's not surprising. I mean, this is

the the the EU ETS one is the

cornerstone of the European Union's

climate change policy. So uh to the

extent that they are banking on carbon

prices being the way in which European

industry de decarbonizes and helps

Europe meet its um its ultimate net zero

challenge by 2050. Um prices do need to

go higher. So um that's that's kind of

what the market is there to do or they

need to go to the level that that that

>> the price discovery needs to reach a

level where industry is incentivized to

reduce emissions. Um I don't think 50 a

ton is where that happens.

>> The question is is it 100 100 120 150

200 that's what we're going to find out

over the next five years.

Yeah, certainly. Renee, did you have any

uh thoughts that you wanted to jump in

on? I see you. Uh

>> yeah, I'm just nodding very um very

aggressively here in the background. I'm

really enjoying this. Mark, again,

thanks for coming back. I I said before

we started rolling uh and recording how

uh how great the episode was on the

carbon exposure project, the other the

other podcast, and how many requests

I've had for you to come back.

really grateful that you're here and

providing once again a masterass on

everything uh from EUS all the way

through to Corsia.

>> Look, I just I just have some

observations. I think

>> you you gave us and and you walked us

through this very complex landscape and

you you you did so really eloquently. So

So you know the I think the audience

will really get essentially what what

everything you're saying here around

this this bullish case that you've built

in in terms of reflection and and and

obviously you know you mentioned it from

the outset. you're you were the first

analyst carbon carbon specific analyst

and carbon focused analyst in in the

city of London back in the day and you

know to me the EUS is really has evolved

from a policy uh sorry a clunky policy

tool essentially you know to one of the

most sophisticated commodity markets and

you you intimated that right when you

said that now there's a visibility

around fundamentals around the direction

of travel because of the tightening of

these various different systems so

market stability reserve the MSR in

particular, you know, you talked about

um fit for 55 and and the and the

direction right there and and it's

essentially now we're seeing this true

price discovery and you mentioned that

earlier, right, driven by these

fundamentals and it's not just Brussels

edicts, right, that that are driving

that, right? The the the structural

tightening piece between the MSR, the

cap reduction, you've got sexual

expansion into maritime and you kind of,

you know, the sort of democ over over

aviation. uh you know but but

effectively we're witnessing this most

aggressive sort of supply side reform

since the system began is kind of how I

see it and and I liken it to kind of

like quantitative easing easing but in

reverse. It's essentially every year

there's less and less supply as you said

or less oxygen in the system and so that

has an inflationary effect with regards

to prices and and as you as you

correctly just said in your last kind of

point is you know the the price band has

been fairly I mean it's been in the last

couple years I was just looking at the

ice futures you know somewhere between 80

a ton you know per EUA in January of 24

and a and a low of you know 55 what is

it in in that time frame and it's been

somewhere between this 80 85 to 85 and

60 sort of range. Yeah. Yeah. and and

and it's been kind of up and down, but

now it seems that this this is kind of a

really interesting inflection point as a

result of of this run towards 2030. Um,

and and I think that you're you know,

when we certainly speak to hedge funds,

you know, that they're treating EUAs

essentially as a macro trade,

>> right? They look at, as you said, a a

proxy for energy policy and industrial demand.

demand.

>> And now you've got this coupling around

this geopolitical volatility. So

carbon's no longer niche. That's the

that's the take-home message that I want

people to take away. It's no longer this

obscure little corner of of commodity

markets. It's a real commodity market

that is ubiquitous and it touches on

every single industry. Um, so, so

they're just some observations based on

on what you what you

>> I mean, and it's a great point, Renee,

because I think the other thing that

people will have to start bearing in

mind more going forward is is not just

in the commodity space, but in the

equity space. What's the impact of

higher carbon prices um for fund

managers who hold, you know, European

equities in industrial sectors? You

know, there's there's going to be a lot

of uh analysis needed. I mean, one thing

that strikes me is

>> sort of stranded asset sort of test.

>> Well, yeah. And and just the fact that

the sellside and and I can say this as

an exelside guy. I was on the sell side

for 20 years. You know, I would never

say that sellside analysts are lazy

because it's what it's the hardest job I

ever had, right? You you have to be on

top of everything and so on. But but

what does tend to happen on the sell

side, particularly on the equity sell

side, is that the analysts focus on the

areas that the companies themselves

focus on. And um this is why you've not

really seen even now when this market

has been up and running for 20 years um

analysts of the steel sector or the

cement sector or uh you know oil and gas

sector focusing on refineries uh

chemicals. um detailed research reports

from these guys saying what's the impact

of higher carbon prices on our sector

over the next few years as we lose free

allowances and so on. Um so over the

next three or four years there's a huge

amount of learning to be done by the

sellside analysts of these sectors

because once the behavioral psychology

of the companies they cover changes

their coverage will have to change and

ditto for the fund managers who manage

equities um in these sectors. So um

figuring out who are the winners and

losers at an individual company level

across these different sectors as carbon

prices start to rise, who's hedging

well, who's not hedging well, etc.

That's going to be uh a major source of

uh alpha I think for fund managers

whether it's in the long only space or

in the hedge fund space. So um it's it's

kind of the underappreciated aspect of

of this carbon market. It's of course

it's an it's an asset in and of itself,

but it's an asset that will affect

increasingly the profitability of

industrial Europe over the next well

until the market ends now in 2040.

>> Yeah. And I want to touch on

>> interesting. Can I just double can I

double click on that one? I mean that

that that to me is really interesting

because essentially it's you know you've

got carbon as you said it's not just or

the sellside coverage is essentially

finally waking up is what you're saying

right it's not just as carbon as a trade

so the alpha is not just in the EUAs

themselves but it's in anticipating

which sectors are the most exposed and

essentially who's position to the arbitrage

arbitrage

>> like to that transition right or to

arbitrage that transition more

>> absolutely yeah

>> um and so I'm just I'm just wondering

like you know

you what's that headline risk right for

for for those analysts you mentioned

cement steel and and chemicals like the

EU EUA curve is is essentially the new

cost of capital effectively right for

them because essentially

>> that hasn't been faced in what 30 you

know an EUA wasn't really a pain point

but once we hit triple digits again it's

it's going to be material right like it

it could it could actually be material

to the to the balance sheet and to capex

right so so where is capex going to to

kind of hedge for that risk. Exactly.

>> The direction of travel's clear like

decarbonize or or don't exist, right?

And then you got CBAM on top of it which

which reduces the leakage piece. So the

EU is not going away in terms of

population, in terms of demand. So it's

a very very significant policy direction

and and it's and it's kind of like baked in.

in.

>> Well, I the way you said that there is

very true that Renee the decarbonize or

don't exist. I prefer to call it comply

or die. and comply or die and um that's

that's what industry is going to have to

wake up to. It's comply or die time, right?

right?

>> And and that means they have to be much

more active hedging. Uh again, the risk

of sounding like a broken record. It's

all about behavioral psychology now. And

that will drive um so we we've got this

backdrop of very supportive fundamentals

in terms of supply. What what changes on

demand is a change in behavior. It's not

that that there's going to be an

increase demand per se for allowances.

It's that the way they behave in seeking

those allowances is going to change. >> Yeah.

>> Yeah.

>> Yeah. It's kind It's kind of funny

because in 2020, sorry I didn't

candleize this whole thing. I know I

know you've got other topics to get to,

but I'm just a nerd out here with M is a

person that I admire immensely and I

just love talking to. Um so so you know

in 2020 a lot of folks came in as the

voluntary market was kind of getting

getting you know it its feet uh sort of

set and and we started to see the first

futures contracts and you know started

seeing increasing liquidity etc. And a

lot of folks kind of just overly overly

bullish and they said oh you know carbon

is the new oil and I remember that quote

at that time thinking guys no no no

please don't jinx us. Um but but

essentially you know what I what I liken

it now to to what you're saying is essentially

essentially

you know the smartest analysts are

treating carbon in particular EUAs as a

leading indicator much in the way that

if you you know essentially if you read

oil like carbon's kind of like oil in

that it's not just a trade but it's a

macro variable that it moves those

industrial margins those share prices

you talked about equities and

essentially capital flows. So if you

know if you're still modeling the EU ETS

exposure as a footnote in an industrials

report, essentially you're missing the

plot. Carbon's become the effectively

the fulcrum and the smartest analysts

are treating it like that leading

indicator. And I think that that's a

really interesting kind of position for

for it to break out from this kind of

tight band of you said between 55 and 80

and essentially just bust out of that

and then and then fundamentals kind of

drive that that direction and as you

said it's just going to be harder and

harder to get

>> ready supply on a forward basis and and

to lock that up for the big industrials

and that's what will move the market

where the bids start chasing

>> the you know the market up and up and up

and up and then the smart could just

load up on this stuff.

>> Well, that's what that was that is

exactly right. That was the point I was

going to make. And if if if we're

probably not going to have to wait for

the first industrial to do that because

hedge funds will anticipate that, >> right?

>> right?

>> Hence the comment about, you know,

>> and so it's a natural it's a naturally

long market. So that's an interesting

kind of supporting your bullish like

sentiment. So

>> exactly. Exactly. Yeah. Yeah.

>> Yeah. And I think like touching on

more of a macro perspective, you know, >> obviously

>> obviously

high carbon price is intended to

intended to incentivize deep emission

cuts in EU power and industry and

maritime and that impacts like you said

all different angles of the economy. And

you know I would say there has been

quite some pessimism about Europe uh

recently due to regulatory constraints

and overall lower lower growth rates

compared to other nations. you know,

we're seeing GDP uh in in large European

nations fall behind and a lot of

industry exe executives are increasingly

voicing their concerns about

further climate policy and f further

regulatory constraints and I I would

like to ask you Mark since you've

obviously seen this market um through

multiple cycles and from your experience

>> you know how significant is the

correlation between you

high carbon prices and lower economic

growth and output and what is your kind

of forwardlooking

perspective on on this topic because it

you know there there is a lot of voiced

concerns uh from European uh execs on on

further climate policy. Yeah, I would

love to to hear your thoughts.

>> Right. Yeah. So this is obviously a very

uh controversial and and uh difficult

topic you know technically uh lots of

layers to it. The the big picture way I

would answer this is to say look what

happened in uh the summer of 2022

when we had those record uh power and

gas prices. you know, European gas 5

years ago,

>> um, before the before the

troubles with Russian gas supply into

Europe, European gas was trading at 15 a

megawatt hour all the way down the

curve, right? That was, let's say, the

old normal was 15 a TTF. >> Yeah.

>> Yeah.

>> And German power had never once traded

above €100 a megawatt hour, German base

load power. And in the summer of 2022,

we saw TTF reach 350 euros a megawatt

hour. And German base load power very

briefly, but it did trade there. €1,000

per megawatt hour. But European carbon

never went above 100. Well, it got it

got to 100. It didn't go higher than 100

or not much higher. I think the all-time

high is 101

euros25, right? Um, what does that tell

you? It kind of tells you that um Europe

has been and and of course prices have

come down but we're still back at what

are historically

high prices very high prices for

European power and gas right um and

European industry is suffering under

that. So I think the first thing to say

is that for all of these energyintensive

industries, it's the price of power and

especially the price of gas which in any

case determines the price of power um

that is more significant than the price

of carbon. That's the the first thing I

would say. Um and it was very

interesting to me that you know

it's kind of the way human psychology

works. If if we'd had European carbon at

€100 a ton

with power at kind of 50 and TTF at 30,

I think there would have been huge

outcroes over over carbon prices, right?

But because

power went so much higher and because

gas went so much higher and if you were

doing the fuel switch, I worked out at

the peak in summer 22. I remember doing

this calculation at the time. If if we

traded on the fuel switch in the carbon

market, the price of carbon would not

been would not have been €100 uh euros a

ton. It would have been €500 a ton

because that would have been the price

needed to switch from coal to gas

because gas was so expensive at the

time. And yet carbon just stuck around

that 100 level while the other

commodities were having their uh crazy

moment. And um that kind of tells you actually

actually

>> so no elasticity with regards to that

volatility. That's interesting.

>> Yeah. Yeah. Yeah. Yeah. Exactly. So I I

I think the thing about carbon on its

own having such a major impact on you

know the macro level for the European

economy and for European GDP. It it's

possible to overexaggerate it. I'm not

going to underplay it and I'll come back

to this point in a moment. But I'm

saying power and gas are actually more

important right in the grand scheme of

things. Now that being said, we are

moving as I said earlier and you've

heard me make this bullish case now for

for EUAS. Um, I think that, um, if if

I'm right and we see prices of maybe

€150 a ton for EUAs within two years,

which I think is perfectly possible, um,

that is going to cause definitely

problems for for some of the uh very

heavily uh energyintensive industries.

We already know that the aluminium

industry suffers with high carbon

prices. anything that uses uh a lot of

electricity um will suffer. Um and uh

but this is exactly why we've brought in

CBAM right so uh the point about CBAM is

that CBAM is there uh to try and

mitigate try and offset in fact

neutralize the impact on European

industrial competitiveness of higher

carbon prices because it will it will

require that foreign companies pay the

same carbon price at the border

effectively even though you know it's

it's a pass through to the importer But

nonetheless, what's happening is um

effectively the carbon price at the

border is being adjusted upward. So

foreign exporters into Europe are paying

the same carbon price effectively. Now

the problem with that is that um it only

solves one side of the equation because

uh European exporters

who are exporting to other jurisdictions

outside of Europe, they're not getting

any help, you know. So they're losing

free allowances and they're exporting

into jurisdictions that have much lower

if if if any at all carbon prices. So I

think that is where it will become

tricky and there will be for every

industry and for every company within

each industry different

price levels of carbon that cause them

pain. But ultimately this market is

about price discovery and getting them

to find new ways to to produce things uh

more cost effectively. So look,

summarizing all of that, I said it was a

technical issue. There's lots of layers

to it. It's difficult to run through it

in in a very short period of time and

got other stuff to get through. But to

summarize it, I would say um Europe

should be very alive to the risk on

industrial competitiveness of higher

carbon prices as we move towards 2030 uh

and beyond. Um particularly for European exporters

exporters

uh in these sectors. Um and that's why

in my view um one of the tricks they

have missed perhaps the biggest trick

they have missed is uh allowing I I'm

sure they'll have to revisit this by the

way I I just don't think this can stand

but you know two weeks ago when they

came out with the proposal the

commission came out with the proposal

for a 90% reduction in emissions by 20

uh 2040 for the EU overall right for the

EU overall

>> um they said we will only allow uh 3% of

the entire cap to be um

to be in terms of volume. That's the

that's the cap on the amount of offsets

we will allow into Europe into Europe,

not into the EUTS. In fact, what they've

said is we will not allow at this stage um

article 6 credits into the EU ETS beyond

2030. And even for the nonet or at least

nonet1, so you're looking at ETSs 2 and

then the agricultural sectors, I guess,

um you're looking at 150 million tons in

total over 5 years from 2036 to 2040.

That's 30 million tons a year. That's 1

million tons per member state per year

for five years. It's absolutely nothing.

It's not even peanuts. Um, and so, uh, I

think they're going to have to revisit

that because I I I just think that, um,

European industrial competitiveness,

particularly if gas prices have not come

down more by then, and one would hope

that with all the LNG that is meant to

be coming online over the next uh, 2,

three years, European gas prices will

fall back. Um, but nonetheless, there is

a risk clearly to European industrial

competitiveness here. And I think the

way you solve that, you square the

circle is by allowing article six

credits with with um corresponding

adjustments into the market beyond 2030.

>> But in a gradual manner, right?

>> Yeah. Right.

>> It's like a release valve essentially.

>> Totally. Totally. Totally. Yeah.

>> I mean, if you think about some easy

maths on this. >> Yeah.

>> Yeah.

>> Um between 2008 and 2020,

the EU allowed 1.6 6 billion tons worth

of Kyoto credits, so CERS and uh ERUS

into the market, that 1.6 billion

represented 7% of the total cap uh the

total EU ETS cap over that period. So um

if you did uh a similar thing here,

you'd be look I'm doing this very much

off the top of my head here. So let's

say the cap between 2031 and 2040 is is

4 billion. is going to average about 400

million a year over that period. Um 4

billion times 0.07 million.

>> Yeah, you'd be looking about 300 million

300 million uh

volunt uh uh article 6 credits with

corresponding adjustments

>> at a minimum I would say. Um and and so

I just think the European Commission at

the moment frankly is um uh has got its

head in the clouds. I mean, it's just

not it's just not thinking this through

properly yet. And um uh let's put it

this way. If if carbon prices were

already trading at

12, I think there would have been a much

greater readiness two weeks ago when

they published that document to allow

for uh article six credits to come into

the ETSs beyond 23.

>> Certainly. Yeah. And there's there's a

lot to unpack there. Um

so you know maybe I would love to ask

you know which which

segue would you want to take this in? We

can discuss the EU you know UK ETS

linkage. we can discuss the outlook for

EUTS2 or we can go

>> can I can we click on EUTS2 because Mark

you've mentioned it in in kind of in in

your intros a couple of times where you

said you know the old EUS was is now

ETS1 and now we've got ETS2 that's a

that's another um kind of quirky quirky duck

duck

>> right love to

>> you know it's yeah so I'd love to hear

more more what you think about it

because um you It's kind of like

>> Yeah, it's just it's just it's just an

odd one. It's effectively, you know, the

UES was just is it wasn't just

tightening like you said, right? It was

a it was this kind of uh structural >> Yeah.

>> Yeah.

>> kind of industrial piece, but it but

effectively so like you know ETS1 was

cleaning up the cleanup proof of the

smoke stacks, but ETS2 is essentially

the front line of this climate policy,

but in everyday life.

>> That's right. Um, and so that's the bit

that I think will make it, you know,

>> very politically hot hot button

>> because it's carbon pricing in people's

living rooms and on their fuel receipts

and we've seen situations in particular

with regards to fuel pricing etc where

where it's governments in in certain

parts of the world or or created a lot

of social unease and unrest. Um I

remember the mayo in uh in France you

know you know kicked off by by this. So

it it you know just give us a little bit

of an overview about ETS2 and where you

see it kind of tra you know walking this

fine line between you know uh let's

acknowledge its ambition but exposing a

little bit of its vulnerabilities if we can.

can.

>> Yeah totally. Well um so just what is it

and when does it start and so forth. So

um from 2027 1st of January 2027 the

heating and transportation sectors will

be uh covered um uh under a separate

market called ETS2. Uh that doesn't have

a formal link with uh ETS1.

Um that may or may not transpire in the

future but for the for the foreseeable

future there's no intended link between

the two. Now, um the the curiosity about

this market and this is to your point

Renee is that um this has a much more

direct impact on retail um or to put it

in even simpler political terms on

voters, right? I mean, um, it will be

your everyday, uh, mom and dad who are

filling up their their car with petrol

or, um, putting on the boiler in the

winter because they need the central

heating cranked up because it's a cold

winter. Um, there will be a carbon price

on those activities from the 1st of

January 2027.

And there will be no free.

>> You're not not just pricing emissions

here. You're essentially pricing behavior.

behavior.

>> Yeah. Exactly.

>> Yeah. And and when you do that kind of

you need political armor because you're

not just it's not just economic theory

anymore. It's it's affecting people's

personal balance sheets.

>> Totally. This is visible. This is

visible. Whereas you know your average

consumer is not seeing certainly hasn't

seen at all until now except in the

realm of electricity prices where the

carbon price has been passed on but you

haven't really seen it in steel prices

or because there've been free

allowances. And as those free allowances

are phased out over as we discussed

earlier you know that those prices will

start coming through more as well. But

here from day one the there will be a

pass through into petrol prices, gas

prices, all the fuels we need for

transportation and heating. Um now

there's a couple of things to say about

this. That being said, it will not be

levied at the individual consumer level.

It will be levied at the wholesale

level. In other words, it's the

suppliers of fuels who will have to pay

uh the who are responsible for buying

the carbon allowances that go with the

emissions, what will be their scope 3

emissions. Um but obviously they will

pass that through to the end consumer.

So the end consumer will see it. They

won't have then they'll pay it. They

won't have the administrative burden of

having to purchase the actual carbon

credits. Um but they're going to but

they're going to see it. So that's just

on the mechanics of how it works. Now I

think to your point Renee, this is

politically highly combustible. We saw

with the Gileon as you mentioned in

France 5 years ago a tremendous backlash

against um higher petrol prices as it

was at that time. Um and I do worry that

this uh we are setting ourselves up for

a similar political backlash

particularly in a climate today where

populism has only grown in uh in frankly

even in the governments that are not

nominally populist there are more

populist measures being taken. Um and uh

I I I think you know if if carbon prices

in ETS2 were to go above 100 it would be extremely

extremely

uh tricky. Now let's talk about some of

the safety mechanisms here that are in

place. Number one they're going to

auction 30% more supply in the first

year so that there is a soft start so

that um you know you you don't notice a

huge difference uh from day one.

Secondly, uh there is a specific mandate

in the legislation to protect the most

uh fuel,

you know, citizens who are already in

fuel poverty

um will not pay the price or they will

pay it and then they will be reimbursed.

But of course that's administratively

burdensome and you know there is a cash flow

flow

>> notion climate fund. Exactly. you know,

but there there's there's always winners

and losers there at the margin and it's

it's tricky to demarcate and it takes

time to reimburse and so on. So, you

will get the

>> you will get the flames of indignation

first before the fire brigade of uh

reimbursement comes along to put out the

fire. And so, it's a risk. But the other

thing is there is a price.

>> I like that.

>> I like that analogy. It's it's a really

good one. Essentially, you're saying

that there's no energy transition

>> without the demand side reform. And

effectively, ETS2 is that reform and

it's bold, essential, and politically

flammable to totally

totally right. Totally right. Um, but

there's a price cap uh initially of

>> what's that at 45.

>> It's 45 uh in real terms adjusted. So,

uh inflation adjusted against uh 2020.

So I don't know 45 if you assume 2%

inflation overflation.

Let's assume let's assume you know 3%

inflation over the last five years even

that might be too low.

>> It gets you to sort of 55 something like

that. Um I I think to be honest um

55 is probably

>> yeah 45 to 55 a ton and said um

additional allowances will be

automatically uh released from a reserve

to cool down the price if

>> yeah so they're starting

>> got the MSR functionality as well.

>> Yeah they're starting with a with a

market stability reserve where they will

be able to inject. So I think they they

are desperate to avoid a rerun of the

Gileon saga that we had in France.

>> Yeah. Well, it's it's to it's to

mitigate the volatility in that market

because if it runs on its own

fundamentals, that market could be just

Yeah. Like you said, it's it's a

naturally long market on the allowances

and and effectively

it's a short squeeze. And so so the the

and the utilities and and you know the

fuel companies, etc., they'll pass on

those costs to to the to to the um the

eventual consumers. And then that's

that's the that's the politically, you

know, um, flammable kind of component

there. So, um, you know, it could it

could be really one of the most

transformative carbon pricing tools

we've seen or it could just become, like

you said, Europe's next political

punching bag effectively. Oh,

>> completely. Uh, so so kind of keeping it

within within a tight range and kind of

uh, let's say, let's call it training

wheels would would I think pragmatic,

>> right? And you know what's interesting

is that ICE have already developed a

contract on ETS2 and it hardly any

volume at all but it has traded and it's

traded to my surprise at levels close to

um you know ETS1. Um I I think the strip

starts at 2028 though on ICE. I don't

think they have a 2027 contract. I may

be wrong. Um but in any case that's not

really a meaningful price signal yet

because the volumes have been so low

that you can't really read anything into

it. Um I

you know the other dimension to this in

terms of political flammability is if if

hedge funds were and speculators were to

start playing aggressively in that

market and forcing prices up. I mean,

there would be an absolute

um hail storm of uh political

heat in Brussels. Um so >> yeah.

>> yeah. >> Yeah.

>> Yeah.

>> Yeah. It's very interesting.

>> The contract launched July 8th, so I I

have not I haven't looked at it on the

screen um where where the price is at,

but that's an interesting one.

>> Yeah. It seems that um a lot of folks

foresee delays or adjustments to the

ETS2 launch. Um you know there were

there were signs of delay um plans were

due by June 2025 for the you know member

states drawing up social climate plans

but 26 out of 27 uh EU countries missed

that deadline. So, you know, people

think that this highlights uh there's

ongoing coordination issues and risk that

that

>> there's a fragmentation as well.

>> Yeah, the consumer compensation.

>> So, Poland's probably not too

>> may not be fully ready. Yeah.

>> Right. Right.

>> I would love is it any take on delays or

adjustments to the launch? Um,

>> yeah, I think they they will do they

will try their best to avoid that

because I think uh you know the problem

here is that the legislation allows for

a one-year delay. Um I'm not sure what

happens if if you know they delay it for

a year and then energy prices generally

go even higher than they were in the

year that they delayed it from and and

then all of a sudden you know you have

to start worrying about delaying it

again. I think you don't want to set

that precedent as a policy maker because

it undermines the credibility of your

new market from day one. Um that being

good that being said um

sorry that being said if um

if uh they're forced to do it I think I

think they will have to politically and

there will be certainly some member

states who would want to do that almost

regardless of what what's happening uh

with energy markets more generally. Um I

think again as you know the one has to

be conscious of the shifting political

sands uh in Europe and the drift towards

what we might call the the populist

right um who are not fans of of climate

uh climate change policy in many cases

don't believe in climate change or at

least claim not to believe in it. Um

you're seeing for example a breakdown in

the UK of the uh cross party consensus

between Labor and Conservative that

we've had for the last 20 years ever

since the EUETS was up and running. That

has now broken down. Clearly the

Conservative party think that there is

more political mileage to be had in

backtracking or backpedaling on the net

zero target. And Nigel Farage

uh the reform party leader has come out

and said that quote unquote net zero is

the next Brexit. I mean, he thinks that

there's so much political mileage for

him in this that he can uh run for the

next election, run to be prime minister

of the UK on a ticket saying we will um

get rid of the net zero targets. We

don't think climate change is a problem,

you know. So, which coming at a time

when the UK is about to experience its

fourth official heat wave of the summer

next week is paradoxical timing. But the

cognitive dissonance on climate change

is only growing. You know, climate is

getting much worse, much more quickly

than anybody thought even 5 years ago,

never mind 20 years ago when I first

started uh looking at this. And um but

unfortunately the political response to

it is becoming more and more diluted. >> Yeah,

>> Yeah,

>> it reminds me of the cognitive

dissonance. I love that. of um that

movie with Leonardo DiCaprio uh and uh

Jennifer Lawrence, Don't Look Up.

>> Oh yeah, exactly.

>> Yeah. Where this imminent asteroid uh

you know collision and it's like just

don't look up. Everyone just kept

looking down in the in the sky. >> Exactly.

>> Exactly.

>> It's inevitable, but it's just like no

no don't look up.

>> But but maybe this is a good transition,

Eddie, to to talk about the kind of EU

UK linkage in carbon markets. I mean

Mark to to kind of help set it up. Um

>> Yeah. and and for Eddie to kind of get

you to give us the context here, but

like essentially this market linkage

between EU and UK is like carbon market

diplomacy effectively, right? So if

Brussels and London can pull this off,

especially post Brexit, you talked about

Nigel Farage, it really sends a strong

signal to the rest of the world. So, you

know, um there'll be cheerleaders us in

and I want sorry for that visual to our

listeners um um who who will want that

to to to be the case, right? But like

you said, it's it's it's a difficult one

given the kind of the populous kind of

undertones that we're seeing in in in

the political realm. And do you want to

kind of queue us up around um the the

linking piece?

>> Yeah, certainly. I mean on the topic of

uh Brexit after Brexit the UK launched

its own uh carbon ETS separate EU and now

now

>> now the EU and the UK have agreed in

principle to link their emissions

trading systems uh creating a unified

carbon market across both jurisdictions

in May 2025 uh at the first UK EU since

Brexit leaders announced his plans for

closer cooperation on emissions. through

linking our respective ETSs. Now, it's

not legally binding, but it shows strong

intent on both sides

>> to negotiate the technical linkage in

the next couple of years. And you know,

if achieved, this would be a significant

reintegration of climate policy between

the UK and the EU with implications for

carbon prices and market liquidity and

regulated companies in both regions.

There there are some important

conditions um attached to the plan such

as you know there would be a mutual

exemption from CBAM um on each other's

goods and that makes sense uh

>> and you know a government arrangement

must be set up uh arbitration based

dispute resolution there's a lot of

different things uh at play here but

>> you know setting up for for you Mark um

you know what do you think this ETS

linking entails and what do you think

are the main benefits of of the linkage

of the UK and EU carbon markets from

from both sides maybe from a liquidity

perspective cost efficiency you know

avoiding double carbon uh uh charges

like like

>> um would love to hear your your

>> Yeah sure well the first thing to say is

of course that until 5 years ago the UK

was part of the EU ETS so linking them

shouldn't wouldn't be that technically

complicated. I think they can do this if

the will is there. I think they can do

this easily by 2027 or certainly no

later than 2028 because I I say that

because I hear a lot of people saying,

"Oh, well, you know, it took Switzerland

forever to link with Yeah, Switzerland

is was never a member of the EU and its

carbon market was never literally part

of the EU ETS." So, um that's the first

thing to say. The second thing to say is

that it makes total sense for both

parties but more sense for the UK than

for the EU because the EU remains the

UK's largest trading partner despite

Brexit and um

with CBAM coming in in Europe you know

there's an incentive for European

industry for UK industry to uh avoid

that charge and this is how you do it by

linking your carbon markets and then uh

definitely for all UK participants

having um a effectively a deeper market

uh which is what linking provides you

know that the the

UKAS would become fungeible effectively

with EUAs

um it just gives you uh more of a uh uh

gives you more confidence in the

integrity of the market that you won't

get big price swings or they'll be

smaller than that you would get in the

UK in in the UK's market um so

definitely makes sense from the UK side

and I think from the European side um it

makes sense for the same reasons. Uh

it's less compelling because you know

the EU market is much bigger than the

the UK market. There's a minor again

similar to what we said about maritime

emissions earlier. It it increases the

tightness of the market overall at the

margin because the UK target is slightly

more ambitious than the European uh uh

target. So, so you end up with uh extra

demand on the system on the EU system by

including uh UK operators. Um so I think

for in all senses it makes sense. It's

economically efficient and you know

we're trying to reduce emissions

globally and in Europe in the most

efficient way. So the bigger the market

the easier it is to do that. Um,

>> and and I think that uh there's an extra

political benefit here to to your point

Eddie in your intro there in that um if

the EU can show globally that uh any

country that links its carbon market to

the EU will be exempt from CBAM and I

think this is particularly significant

going to Brazil for the COP in uh November.

November.

um you can you can say well this is how

we globally join up to fight climate

change. So I think there's a there's a

on top of all the economic arguments

which are the main arguments for doing

this there is a compelling uh

geopolitical dimension to it from a

European perspective.

>> Yeah I really like that Mark. Thanks for that. C can I chime in Eddie just with

that. C can I chime in Eddie just with some with some kind of views and I and

some with some kind of views and I and look I

look I >> our firm we're not a we're not trading

>> our firm we're not a we're not trading UK or or UA futures but just you know as

UK or or UA futures but just you know as a trader I can't help myself always ask

a trader I can't help myself always ask that question to myself like where's the

that question to myself like where's the trade uh some some some kind of thoughts

trade uh some some some kind of thoughts around what you've said to help to

around what you've said to help to unpack it

unpack it >> and then and then kind of my kind of

>> and then and then kind of my kind of naive let's say view like a non-expert

naive let's say view like a non-expert view let's put it this way uh around the

view let's put it this way uh around the the kind of where's the trade and I'd

the kind of where's the trade and I'd love for your correction and or

love for your correction and or agreement in terms of thoughts but but

agreement in terms of thoughts but but effectively what you said is essentially

effectively what you said is essentially correct me if I'm wrong here right but

correct me if I'm wrong here right but linking the ETSs is like connecting

linking the ETSs is like connecting essentially two pools of of capital um

essentially two pools of of capital um and it it helps to deepen the liquidity

and it it helps to deepen the liquidity and it helps to sharpen essentially that

and it helps to sharpen essentially that price discovery and it reduces the

price discovery and it reduces the market friction we talked about

market friction we talked about >> Cband

>> Cband so so that that's that point there and

so so that that's that point there and then and then in terms of the like the

then and then in terms of the like the the the trading side essentially

the the trading side essentially Essentially, you know, UK have been

Essentially, you know, UK have been trading at a discount to EUAS, which is

trading at a discount to EUAS, which is having a look on the ICE futures and you

having a look on the ICE futures and you know, the last price is at 5110

know, the last price is at 5110 >> and it's kind of been in this t fairly

>> and it's kind of been in this t fairly tight band the last well since the

tight band the last well since the beginning of the year since between 35,

beginning of the year since between 35, let's call it tight band between 40 and

let's call it tight band between 40 and 50,

50, >> right? And um and that's it's at a it's

>> right? And um and that's it's at a it's at a discount to let's call it 10 to 15

at a discount to let's call it 10 to 15 um euros or around there. um 10 let's

um euros or around there. um 10 let's say 10 right depending on policy cycles

say 10 right depending on policy cycles and energy demand and a bunch of other

and energy demand and a bunch of other stuff at auction volumes so so

stuff at auction volumes so so essentially when when linking happens

essentially when when linking happens the allowances and correct me if I'm

the allowances and correct me if I'm wrong here but essentially the

wrong here but essentially the allowances become fungeible across the

allowances become fungeible across the systems UKAS and EUAS so essentially you

systems UKAS and EUAS so essentially you see this direction of travel towards

see this direction of travel towards convergence and so essentially UKAS will

convergence and so essentially UKAS will likely rise towards the EUA levels as

likely rise towards the EUA levels as demand increases from EU buyers and

demand increases from EU buyers and effectively UK aligns its emissions cap

effectively UK aligns its emissions cap more tightly with the UK EU ambition,

more tightly with the UK EU ambition, sorry. And essentially creates a

sorry. And essentially creates a directional arbitrage, right? Long UKAS

directional arbitrage, right? Long UKAS now short EUAs

now short EUAs maybe over the short period of term um

maybe over the short period of term um or you know buy UK out on the forward

or you know buy UK out on the forward curve and and there's that arbitrage

curve and and there's that arbitrage split. Maybe maybe you know coming back

split. Maybe maybe you know coming back to an egg that that Eddie kind of

to an egg that that Eddie kind of planted earlier is may maybe that

planted earlier is may maybe that supports the thesis that that some of

supports the thesis that that some of the hedge funds have that are shorting

the hedge funds have that are shorting EUAs right now. Could do you think that

EUAs right now. Could do you think that that's part of it? Yeah, I think

that's part of it? Yeah, I think actually that's a great point and um I I

actually that's a great point and um I I was saying when I was still at and I

was saying when I was still at and I mean there was a Bloomberg article

mean there was a Bloomberg article written in October last year where I

written in October last year where I came out very bullish on UKAS saying at

came out very bullish on UKAS saying at the time the the gap was 30 35 euros to

the time the the gap was 30 35 euros to uh between UKAS and EUAS. I said this is

uh between UKAS and EUAS. I said this is this is insane. Even if you um even if

this is insane. Even if you um even if you don't believe linking will ever

you don't believe linking will ever happen because the UK market

happen because the UK market intrinsically is tighter uh than the

intrinsically is tighter uh than the than the EU market, right? Because the

than the EU market, right? Because the the UK climate target is more ambitious.

the UK climate target is more ambitious. That's the first point. So uh but if you

That's the first point. So uh but if you then add in the the possibility of

then add in the the possibility of linking which which is now kind of

linking which which is now kind of coming to fruition, right? um that was

coming to fruition, right? um that was always a huge arbitrage opportunity and

always a huge arbitrage opportunity and I think you know from the beginning of

I think you know from the beginning of this year when the political debate on

this year when the political debate on this really got serious and and you had

this really got serious and and you had this FT article in January saying is

this FT article in January saying is going to happen um you've seen that

going to happen um you've seen that discount narrowed from 35 to 10 u and I

discount narrowed from 35 to 10 u and I think probably it's going to trade in a

think probably it's going to trade in a discount between 5 and 10 euros uh uh

discount between 5 and 10 euros uh uh until uh until everything is done. But I

until uh until everything is done. But I I I think 10 is probably still a little

I I think 10 is probably still a little too high. I I think 5 for any sort of,

too high. I I think 5 for any sort of, you know, transactional things. But but

you know, transactional things. But but yeah, I think it makes sense for some uh

yeah, I think it makes sense for some uh some hedge funds may have been shorting

some hedge funds may have been shorting EUAs, buying UKAS on this arbitrage

EUAs, buying UKAS on this arbitrage idea.

idea. Effectively what will happen in this

Effectively what will happen in this kind of interim period while when we

kind of interim period while when we know that linking is going to happen but

know that linking is going to happen but we don't know exactly when it will take

we don't know exactly when it will take effect is that a trading range will be

effect is that a trading range will be established and I guess 5 to 10 is the

established and I guess 5 to 10 is the range. So, you're not playing for much

range. So, you're not playing for much at the moment, but every time it drops

at the moment, but every time it drops to 10, uh, people will want to buy UKAS,

to 10, uh, people will want to buy UKAS, sell EUAs, and every time it hits five,

sell EUAs, and every time it hits five, you know, do the reverse. Uh, buy EUAs,

you know, do the reverse. Uh, buy EUAs, sell UKAS. I I think that's going to be

sell UKAS. I I think that's going to be the trade, uh, for as long as we're in

the trade, uh, for as long as we're in this holding pattern um, until the

this holding pattern um, until the formal linking itself happens.

formal linking itself happens. >> Do we have a date in terms of of when

>> Do we have a date in terms of of when that formal linking happens?

that formal linking happens? >> No, we don't have a date. I think I

>> No, we don't have a date. I think I think that will be a function of all the

think that will be a function of all the kind of bureaucratic things that have to

kind of bureaucratic things that have to be figured out. But coming back to what

be figured out. But coming back to what we said earlier, I mean um UK politics

we said earlier, I mean um UK politics and European politics uh would certainly

and European politics uh would certainly favor an expeditious

favor an expeditious um

um an expeditious move on this because um

an expeditious move on this because um if if the link is already established

if if the link is already established where let's assume worst case scenario

where let's assume worst case scenario we have Nigel Farage coming in as UK PM

we have Nigel Farage coming in as UK PM in 2029 and he says I'm going to tear it

in 2029 and he says I'm going to tear it all up. um that might sound great

all up. um that might sound great uh when you're running for election, but

uh when you're running for election, but once it's all bedded down um you've got

once it's all bedded down um you've got European and UK industry, UK industry

European and UK industry, UK industry part of the system and then you're

part of the system and then you're changing the rules on UK industry again.

changing the rules on UK industry again. >> Corporates hate that.

>> Corporates hate that. >> You hate it. So yeah,

>> You hate it. So yeah, >> so you know, um I think I'm certainly

>> so you know, um I think I'm certainly not underplaying the risk of of of the

not underplaying the risk of of of the populism that we're seeing across

populism that we're seeing across Europe, but

Europe, but >> well, it could it could actually be you,

>> well, it could it could actually be you, like you said, it could be fuel for them

like you said, it could be fuel for them to to run on that platform. But it's

to to run on that platform. But it's interesting and it's a cheeky question,

interesting and it's a cheeky question, right? But essentially ultimately comes

right? But essentially ultimately comes to this kind of thesis that if you

to this kind of thesis that if you believe in the convergence, the trade's

believe in the convergence, the trade's clear like you said, right? long UK

clear like you said, right? long UK ahead of the linkage and and ultimately

ahead of the linkage and and ultimately once that date becomes apparent it's

once that date becomes apparent it's kind it's kind of an interesting one as

kind it's kind of an interesting one as a trader because it's not every day you

a trader because it's not every day you get a event with with a calendar on it

get a event with with a calendar on it right so you know that that trade is

right so you know that that trade is kind of placed and then it's like cool

kind of placed and then it's like cool comes into

comes into >> Exactly right exactly right

>> Exactly right exactly right >> thanks Eddie for letting me indulge on

>> thanks Eddie for letting me indulge on >> yeah no that's great nerdy trader trader

>> yeah no that's great nerdy trader trader talk

talk >> great discussion there and I think you

>> great discussion there and I think you know shifting gears to our last segment

know shifting gears to our last segment on kind of what we touched on earlier

on kind of what we touched on earlier with uh article six and corsa and the

with uh article six and corsa and the impact on voluntary markets. Um, you

impact on voluntary markets. Um, you know, like like you said before, Mark,

know, like like you said before, Mark, the European Commission uh announced its

the European Commission uh announced its proposal for the European 2040 climate

proposal for the European 2040 climate targets, aiming for a 90% reduction in

targets, aiming for a 90% reduction in greenhouse gas,

greenhouse gas, >> right? And we're seeing the carbon

>> right? And we're seeing the carbon removals industry

removals industry >> really calling um on the EU to integrate

>> really calling um on the EU to integrate more CDR credits Yeah. into the ETSs

more CDR credits Yeah. into the ETSs starting in 2030. like as you said there

starting in 2030. like as you said there have allowed for the international use

have allowed for the international use of article 6 credits to meet up to 3% of

of article 6 credits to meet up to 3% of the EU's 1990 uh emissions

the EU's 1990 uh emissions >> right

>> right >> and you know

>> and you know we're seeing the global architecture of

we're seeing the global architecture of carbon markets evolving fast between

carbon markets evolving fast between article six of the Paris agreement and

article six of the Paris agreement and corsa and this is moving from you know

corsa and this is moving from you know theory into real world imp

theory into real world imp implementation right and yeah

implementation right and yeah >> you have article 6.2 two, the ITMOS

>> you have article 6.2 two, the ITMOS article 6.4 um you know the the UN

article 6.4 um you know the the UN supervised PACM and Corsia is now fully

supervised PACM and Corsia is now fully operational with six crediting programs

operational with six crediting programs approved. I think looking forward, do

approved. I think looking forward, do you see article six carbon markets

you see article six carbon markets scaling up to potentially,

scaling up to potentially, you know, dwarf the the current

you know, dwarf the the current voluntary carbon market or will will

voluntary carbon market or will will they more likely complement each other?

they more likely complement each other? And,

And, >> you know, how can how can market

>> you know, how can how can market participants best prepare to engage with

participants best prepare to engage with article six mechanisms?

article six mechanisms? >> Yeah. as well as Corsa because there is

>> Yeah. as well as Corsa because there is an argument uh people have about the

an argument uh people have about the relationship between the EUS and Corsa

relationship between the EUS and Corsa as well,

as well, >> right?

>> right? >> Collision.

>> Collision. >> Sure.

>> Sure. >> Yeah. Well, I I mean I think um Corsa is

>> Yeah. Well, I I mean I think um Corsa is key to all of this really because it's

key to all of this really because it's at the intersection between between the

at the intersection between between the two. Um I think in theory I would say

two. Um I think in theory I would say that in theory the article six market

that in theory the article six market should become bigger than the voluntary

should become bigger than the voluntary market over time. um because of course

market over time. um because of course >> um even voluntary PL so the there's

>> um even voluntary PL so the there's going to be a market for article six

going to be a market for article six credits right and the biggest market

credits right and the biggest market initially is going to be Corsier because

initially is going to be Corsier because you know they have to have article six

you know they have to have article six with corresponding adjustments right so

with corresponding adjustments right so that's the initial driver really in

that's the initial driver really in terms of a dedicated source of demand

terms of a dedicated source of demand that's where it's coming from um and and

that's where it's coming from um and and that those numbers obviously they've

that those numbers obviously they've they've ch they change a lot uh

they've ch they change a lot uh according to uh analyst estimates and

according to uh analyst estimates and the whole COVID thing completely changed

the whole COVID thing completely changed the baseline for but I think you're

the baseline for but I think you're still looking at uh potential corsa

still looking at uh potential corsa demand for artic article six credits

demand for artic article six credits with corresponding adjustments of of up

with corresponding adjustments of of up to let's say between one and a half

to let's say between one and a half billion and two billion tons

billion and two billion tons uh between uh now and 2040 okay um

uh between uh now and 2040 okay um that's very substantial right I mean

that's very substantial right I mean it's a

it's a very substantial. If on top of that you

very substantial. If on top of that you then say well uh some uh perhaps the

then say well uh some uh perhaps the European Union will end up allowing

European Union will end up allowing artic article 6 credits into the ETS1.

artic article 6 credits into the ETS1. Perhaps other jurisdictions might allow

Perhaps other jurisdictions might allow that. Um and perhaps also

that. Um and perhaps also anybody who's buying voluntary credits

anybody who's buying voluntary credits today will start to say to themselves,

today will start to say to themselves, we need a UN badge on the credits that

we need a UN badge on the credits that we're buying. It's not good enough

we're buying. It's not good enough anymore just to have a voluntary uh

anymore just to have a voluntary uh credit. Um it needs to have the seal of

credit. Um it needs to have the seal of approval of the United Nations because

approval of the United Nations because that's the gold standard effectively now

that's the gold standard effectively now for the for the global carbon market. So

for the for the global carbon market. So I think for all for all those reasons I

I think for all for all those reasons I think on a five-year view I would say

think on a five-year view I would say the article 6 market will probably be

the article 6 market will probably be bigger than the voluntary market maybe

bigger than the voluntary market maybe before that. But um a lot will depend on

before that. But um a lot will depend on what the coming back to what we said

what the coming back to what we said earlier what what the EU decides to do

earlier what what the EU decides to do in terms of keeping the clock stopped or

in terms of keeping the clock stopped or letting the clock start running again

letting the clock start running again which would effectively make Corsia much

which would effectively make Corsia much less uh compelling. Um

less uh compelling. Um as I said that's not my base case. So I

as I said that's not my base case. So I think Corsia will remain in place and I

think Corsia will remain in place and I think they will um there will be

think they will um there will be substantial demand and therefore it

substantial demand and therefore it becomes a market a really meaningful

becomes a market a really meaningful market

market um and and I think you know that will

um and and I think you know that will help encourage other players. One thing

help encourage other players. One thing we haven't mentioned on this podcast

we haven't mentioned on this podcast perhaps something for the next time is

perhaps something for the next time is uh China and uh China's carbon market

uh China and uh China's carbon market and how they are going to become a huge

and how they are going to become a huge player in global carbon markets and

player in global carbon markets and article six could be a very good way for

article six could be a very good way for them to uh to participate.

them to uh to participate. >> Yeah, exactly. So,

>> Yeah, exactly. So, >> lots to think about there, but

>> lots to think about there, but speculatively, yes, I would I would say

speculatively, yes, I would I would say I'm uh relatively confident that the

I'm uh relatively confident that the article 6 market will will overtake the

article 6 market will will overtake the voluntary market within 5 years.

voluntary market within 5 years. >> Yeah, Rene,

>> Yeah, Rene, >> I I Yeah, I I agree. I I I think it

>> I I Yeah, I I agree. I I I think it comes down to the drivers, right? And

comes down to the drivers, right? And the Achilles heel, the voluntary market

the Achilles heel, the voluntary market has always been, you know, how sticky is

has always been, you know, how sticky is that demand signal?

that demand signal? >> Yeah.

>> Yeah. >> I I I do think it's it's a little bit of

>> I I I do think it's it's a little bit of semantics in in so far as Yeah. just

semantics in in so far as Yeah. just because like there's so much

because like there's so much fungeability and so I just think the

fungeability and so I just think the voluntary market firstly my my sound by

voluntary market firstly my my sound by my view here is like the voluntary

my view here is like the voluntary market isn't going to isn't disappearing

market isn't going to isn't disappearing it's it's effectively being absorbed

it's it's effectively being absorbed right so article six is turning what

right so article six is turning what used to be good intentions essentially

used to be good intentions essentially into formal obligations and then you

into formal obligations and then you have this this fungeability into you

have this this fungeability into you know compliance systems

know compliance systems >> that are from sister agency in the case

>> that are from sister agency in the case of IO which is you know a sister agency

of IO which is you know a sister agency to the UNFC now imposing on a on a

to the UNFC now imposing on a on a sectoral basis uh here for international

sectoral basis uh here for international aviation and that fungeibility of of of

aviation and that fungeibility of of of instruments there. ultimately the

instruments there. ultimately the architecture or the infrastructure

architecture or the infrastructure that's been built over the last you know

that's been built over the last you know 25 um well 20 or so years let's just say

25 um well 20 or so years let's just say right since since the launch really um

right since since the launch really um of EUS kind of starting the clock there

of EUS kind of starting the clock there or you know first firing gun and and and

or you know first firing gun and and and um the CDM

um the CDM is that there's been so much learned

is that there's been so much learned right and so so much experience built in

right and so so much experience built in in and around project development.

in and around project development. >> Yeah. you know uh MRV so monitoring

>> Yeah. you know uh MRV so monitoring pointing verification the certification

pointing verification the certification outcomes and now the issues around

outcomes and now the issues around leakage right CBAN being one

leakage right CBAN being one corresponding adjustments being perhaps

corresponding adjustments being perhaps the most eloquent yet most complex

the most eloquent yet most complex version of it but effectively it leads

version of it but effectively it leads to this to this kind of transition and

to this to this kind of transition and you know there's been so much written

you know there's been so much written and so much said around you know

and so much said around you know integrity integrity integrity integrity

integrity integrity integrity integrity over the last couple of years so so I

over the last couple of years so so I think like If 2023 was the kind of the

think like If 2023 was the kind of the year about integrity, 2025 and beyond is

year about integrity, 2025 and beyond is about sovereignty and and now countries,

about sovereignty and and now countries, host countries really want their slice

host countries really want their slice of the pie and and CAS really are how

of the pie and and CAS really are how they claim it, right? And so so I think

they claim it, right? And so so I think that we'll start to see more

that we'll start to see more harmonization

harmonization >> between blocks between countries and me

>> between blocks between countries and me and and host host um countries

and and host host um countries essentially looking at carbon as a

essentially looking at carbon as a natural resource that they can then

natural resource that they can then utilize to exploit to to generate

utilize to exploit to to generate revenue for their countries. But also,

revenue for their countries. But also, you know, counteractive to that is their

you know, counteractive to that is their NDCs. And so, you know, overly selling

NDCs. And so, you know, overly selling um at the beginning may not be the the

um at the beginning may not be the the most astute. So, you you start to see

most astute. So, you you start to see that demand push and pull emerge. And I

that demand push and pull emerge. And I think the final thing that I'll say is

think the final thing that I'll say is you start to see broader participation

you start to see broader participation in a pure voluntary context. You have

in a pure voluntary context. You have very well-intentioned, you know, good

very well-intentioned, you know, good good intentioned kind of um corporates

good intentioned kind of um corporates doing it for CSR. That was the key

doing it for CSR. That was the key driver. That's what kind of kicked it.

driver. That's what kind of kicked it. And then and then we started to see more

And then and then we started to see more demand signals more and you know

demand signals more and you know alignment between the the boardroom and

alignment between the the boardroom and and and kind of civil society in 2020

and and kind of civil society in 2020 kind of drive it. That that was

kind of drive it. That that was effectively broken with a distrust or an

effectively broken with a distrust or an aversion to to risk and reputational

aversion to to risk and reputational risk in particular by corporates.

risk in particular by corporates. >> Yeah.

>> Yeah. >> That's not the case when it's a

>> That's not the case when it's a compliance market. That's not the case

compliance market. That's not the case when you have participation of those

when you have participation of those same corporates under compliance system

same corporates under compliance system or or airlines under a compliance

or or airlines under a compliance system. And more importantly, it's not

system. And more importantly, it's not just as corporates and you know, you

just as corporates and you know, you talked about EUS2 and and kind of

talked about EUS2 and and kind of retail, but now you actually have GG,

retail, but now you actually have GG, you have governments playing in the mix.

you have governments playing in the mix. So there is there is appetite on the buy

So there is there is appetite on the buy side across governments, corporates and

side across governments, corporates and other systems where where this is

other systems where where this is impacted. And I think that it really is

impacted. And I think that it really is a it helps to you know underwrite what

a it helps to you know underwrite what you've been saying around this very

you've been saying around this very bullish case about carbon over the next

bullish case about carbon over the next five and then 10 and 15 and 20 25 years

five and then 10 and 15 and 20 25 years ahead where we start to see this

ahead where we start to see this convergence and and market price

convergence and and market price signals. You see not a lot of noise and

signals. You see not a lot of noise and it'll be the the folks that are making a

it'll be the the folks that are making a lot of money out of this are the ones

lot of money out of this are the ones that can separate the the noise to to

that can separate the the noise to to signal ratios.

signal ratios. >> Exactly.

>> Exactly. >> That's kind of my my musings on on the

>> That's kind of my my musings on on the topic. What are your thoughts?

topic. What are your thoughts? Well, I I wouldn't disagree with with

Well, I I wouldn't disagree with with any of that, Renee. I mean, I think um

any of that, Renee. I mean, I think um th this tension between, you know, the

th this tension between, you know, the fundamental distinction as you

fundamental distinction as you articulated it there between compliance

articulated it there between compliance markets where you have no choice, you

markets where you have no choice, you have to buy um and voluntary markets. I

have to buy um and voluntary markets. I mean, the the clue is in the name,

mean, the the clue is in the name, right?

right? And you know we've seen some of the

And you know we've seen some of the large oil and gas companies row back

large oil and gas companies row back from the ambitious uh carbon offsetting

from the ambitious uh carbon offsetting plans they had previously um Shell BP uh

plans they had previously um Shell BP uh so forth. So um

that's part of the broader the broader political issue right

political issue right >> part of the broader political issue.

>> part of the broader political issue. >> Yeah. and and those musings at at the at

>> Yeah. and and those musings at at the at the board level, you know, like listen,

the board level, you know, like listen, I won't signal out, but we've spoken to

I won't signal out, but we've spoken to a number of large um you know, energy

a number of large um you know, energy companies and and and it's kind of it's

companies and and and it's kind of it's it's dependent on the performance of

it's dependent on the performance of their share price,

their share price, >> right? And and and the leadership at the

>> right? And and and the leadership at the seauite, but but they they acknowledge

seauite, but but they they acknowledge the ones that remain acknowledge that

the ones that remain acknowledge that >> this is still a very viable market and

>> this is still a very viable market and that they actually play a really

that they actually play a really significant role and they have expertise

significant role and they have expertise with regards to origination. building up

with regards to origination. building up those teams internally is really

those teams internally is really laborious and and costly and so maybe

laborious and and costly and so maybe they're not the highest performing teams

they're not the highest performing teams right now but longterm they don't want

right now but longterm they don't want to abandon that and then and other folks

to abandon that and then and other folks that are kind of moving away I think and

that are kind of moving away I think and we see this around commodity traders but

we see this around commodity traders but also energy companies that have kind of

also energy companies that have kind of they came in they lost some key talent

they came in they lost some key talent and now kind of find themselves

and now kind of find themselves rudderless I I I think that they'll

rudderless I I I think that they'll start they'll they'll come in in 28 29

start they'll they'll come in in 28 29 with you know big M&A splashes to try to

with you know big M&A splashes to try to bolster their expertise as the market

bolster their expertise as the market kind starts to grow. But but but that's

kind starts to grow. But but but that's just kind of an internal view and

just kind of an internal view and politics and Q&A. But but but kind of to

politics and Q&A. But but but kind of to to the point around what you were just

to the point around what you were just saying is like

saying is like >> and and to Eddie's earlier question is

>> and and to Eddie's earlier question is Corsia and article 6 are essentially

Corsia and article 6 are essentially injecting real and predictable demand.

injecting real and predictable demand. You you you looked out you know a table

You you you looked out you know a table effectively around the Corsier demand

effectively around the Corsier demand you know in in in CP1 the phase one and

you know in in in CP1 the phase one and now around a compliance phase that we're

now around a compliance phase that we're going to enter in 2027. And it's

going to enter in 2027. And it's essentially it's no longer just virtue

essentially it's no longer just virtue signaling. And that's the fundamental

signaling. And that's the fundamental difference between VCM and and and

difference between VCM and and and compliance. And that's going to shift

compliance. And that's going to shift the power effectively from the buyers to

the power effectively from the buyers to suppliers. So back a reversion back to

suppliers. So back a reversion back to to to a sellers market where today it is

to to a sellers market where today it is a purely a buyers marketing in in the

a purely a buyers marketing in in the carbon space certainly on on VCM

carbon space certainly on on VCM >> buyers in particular corporates take

>> buyers in particular corporates take their sweet time doing very extensive

their sweet time doing very extensive due diligence being very riskaverse from

due diligence being very riskaverse from a from a reputational perspective.

a from a reputational perspective. That's the story of the day. They have

That's the story of the day. They have very laborous RFP processes, really

very laborous RFP processes, really honorous um you know holds being placed

honorous um you know holds being placed on on on from the sellers, you know,

on on on from the sellers, you know, 90-day payment dates, etc. And that's

90-day payment dates, etc. And that's just the luxury of what they can do

just the luxury of what they can do today. But as that market inverts back

today. But as that market inverts back to a sellers market, that luxury goes

to a sellers market, that luxury goes away really, really quickly. And and

away really, really quickly. And and I've seen I've seen that occur, you

I've seen I've seen that occur, you know, in 2020 and 21 in particular. And

know, in 2020 and 21 in particular. And as you start to see the emergence of

as you start to see the emergence of futures contracts and greater liquidity

futures contracts and greater liquidity emerge and more kind of participation

emerge and more kind of participation from institutional and and speculative

from institutional and and speculative traders, they mop up that slack really

traders, they mop up that slack really quickly and it whips back. And I think

quickly and it whips back. And I think that that's that that's where we see it.

that that's that that's where we see it. And then when we talk just anecdotally I

And then when we talk just anecdotally I won't single out clients but when we

won't single out clients but when we talk to folks there's this very keen

talk to folks there's this very keen interest on corel eligible EUs article

interest on corel eligible EUs article six you know 62 um ITMOS and 64 ERS and

six you know 62 um ITMOS and 64 ERS and essentially wanting to get ahead of of

essentially wanting to get ahead of of that effectively it's a very long bias

that effectively it's a very long bias on carbon in the 2030s certainly mid

on carbon in the 2030s certainly mid 2030s very long bias and the focus there

2030s very long bias and the focus there is how can I firm up that supply on a on

is how can I firm up that supply on a on a riskadjusted basis how can I face a

a riskadjusted basis how can I face a credible counterparty indeed risk the

credible counterparty indeed risk the the um the risks that are associated

the um the risks that are associated with with project development,

with with project development, counterparty risk, delivery risk,

counterparty risk, delivery risk, certification risk, timing risk,

certification risk, timing risk, political risk, etc., etc. And the

political risk, etc., etc. And the answer's been, you know, really, you

answer's been, you know, really, you know, working with experts,

know, working with experts, understanding the kind of the nuances of

understanding the kind of the nuances of the market and then insurance quite

the market and then insurance quite frankly, right? and and then now

frankly, right? and and then now emergence of more sophisticated

emergence of more sophisticated developers that can actually you know

developers that can actually you know bring that experience but help to

bring that experience but help to underwrite and mitigate those those

underwrite and mitigate those those issues as opposed to kind of the

issues as opposed to kind of the boutique operators and that's if we're

boutique operators and that's if we're going to do it at scale. So um yeah

going to do it at scale. So um yeah basically I think the market's growing

basically I think the market's growing up you know and it's an interesting it's

up you know and it's an interesting it's it's time to be in the space. I think

it's time to be in the space. I think that's

that's >> certainly certainly I mean there is

>> certainly certainly I mean there is conviction that this market will be

conviction that this market will be short right in the 2030s that's our our

short right in the 2030s that's our our thesis and um I mean there is inherent

thesis and um I mean there is inherent risk that uh companies both in

risk that uh companies both in compliance and voluntary corporates have

compliance and voluntary corporates have to pay attention to because you know it

to pay attention to because you know it may be costs in the in the near term but

may be costs in the in the near term but the costs are much greater in the long

the costs are much greater in the long term at the end of the day from the

term at the end of the day from the transitions but

transitions but >> look I think that's a Great way to wrap

>> look I think that's a Great way to wrap things up. You know, been a fantastic uh

things up. You know, been a fantastic uh deep dive and thank you so much for

deep dive and thank you so much for sharing. Uh

sharing. Uh >> please come back.

>> please come back. >> Yeah, absolutely.

>> Yeah, absolutely. >> Please come back. You're welcome back

>> Please come back. You're welcome back anytime. I

anytime. I before we started recording that you're

before we started recording that you're you're heading across to to Mexico, but

you're heading across to to Mexico, but maybe when you're back, give us an

maybe when you're back, give us an overview in terms of what you're seeing

overview in terms of what you're seeing on the ground there. And

on the ground there. And >> definitely we'll do news on other other

>> definitely we'll do news on other other things that that are close and near and

things that that are close and near and dear to your heart, especially ahead of

dear to your heart, especially ahead of where where you end up uh in the next

where where you end up uh in the next challenge.

challenge. >> Fantastic. Well, thanks guys. It's been

>> Fantastic. Well, thanks guys. It's been a pleasure as always. And uh when do you

a pleasure as always. And uh when do you expect to put this out?

expect to put this out? >> Next week.

>> Next week. >> All right. Okay. Fantastic.

>> All right. Okay. Fantastic. >> Monday.

>> Monday. >> Great. All right. Well, I'll be t tuning

>> Great. All right. Well, I'll be t tuning in from Mexico then.

in from Mexico then. >> Okay. Terrific.

>> Okay. Terrific. >> All right.

>> All right. >> All right. Take care, guys. See you

>> All right. Take care, guys. See you soon.

soon. >> Cheers.

>> Cheers. >> Thank you. See you.

>> Thank you. See you. And uh yeah, thanks for tuning in to

And uh yeah, thanks for tuning in to This Week in Gin.

This Week in Gin. Be sure to follow the show. Ah I

Be sure to follow the show. Ah I forgot to ask him about the or get him

forgot to ask him about the or get him to do a Hamlet or a Shakespeare quote. I

to do a Hamlet or a Shakespeare quote. I >> think he was so good when he did it. He

>> think he was so good when he did it. He can't He's an amazing guest and I'm so

can't He's an amazing guest and I'm so glad that we had him on

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YouTube Transcript:Carbon Scarcity, Market Linkage, and the Next Chapter of Climate Finance - Mark Lewis

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Carbon Scarcity, Market Linkage, and the Next Chapter of Climate Finance - Mark Lewis